As we head into the key trading season, we highlight the five priorities for food retailers as they balance managing the pandemic and maximising the sales opportunity.
Over the course of the pandemic, retailer priorities have continued to change. These have been related to the nature of the pandemic, its duration and the various phases that individual countries have experienced. As we head into the holiday trading period, these priorities continue to shift, especially as many countries experience a second wave. Our research indicates five areas which are front of mind for retailers.
Source: IGD Research
1. Using hygiene as a brand differentiator
Providing clean and safe stores is the leading priority for all retailers. Going forward, we expect to see retailers focus on hygiene as a brand differentiator. By the end of this year, Lidl in the US will have installed hospital grade air filters in all its US stores to help prevent the spread of COVID-19. Technology will also play a key role, helping to keep stores clean, but also underpinning a push towards a more contactless experience.
2. Phasing the season
Retailers are planning for a very different holiday season this year. While traditionally the focus is on maximising customer numbers, this conflicts with an overriding priority to ensure social-distancing can be maintained. Walmart will be phasing its Black Friday deals over multiple events this year, while we also expect to see shoppers starting to make their gift purchases earlier this year, cautious of the impact of a second wave on store openings.
3. Adjusting to new consumer behaviours
Since the start of the pandemic, retailers have seen significant changes in what shoppers are buying. Several of these shifts will be accelerated over the holiday period, especially as more consumers are likely to celebrate at home, in smaller groups, this year. These include more frequent hand washing and personal hygiene, more laundry and home cleaning and increased snacking. Ranges and space are being adjusted to meet these needs. Helping shoppers with meal solutions is also a major focus, with several retailers piloting meal delivery services, including Colruyt in Belgium.
4. Balancing value and trading-up
Retailers have a delicate balancing act to navigate this holiday season. As the economic impact of the pandemic starts to be felt, especially as government support packages are withdrawn, many households will be financially challenged. However, the holiday period is one of indulgence for many, with consumers using it as an opportunity to treat themselves as well as others. Expect to see an increased focus on private label ranges this year, along with loyalty-driven discounts, including a new initiative from Sainsbury's in the UK.
5. Ensuring the demand for online shopping can be met
From an online perspective, it’s all about execution this holiday season. With orders levels expected to be at record levels, retailers will be laser-focused on omnichannel processes. During this critical period, most retailers will stop launching new functionality and focus on the robustness of their services. Expect to see a major focus on customer service, with retailers recruiting heavily to support in-store and with central support to ensure any issues are quickly rectified. Recently, US-based Instacart launched a new service to support seniors getting online.
Retail analysis subscribers: read our new report, Five retailer priorities this holiday season, for more details and case studies in each of these areas.
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