Five trends shaping grocery retail in Western Europe in 2021

As 2021 begins, we can reflect that 2020 didn’t play out as we might have expected. The Coronavirus (COVID-19) pandemic has led companies to reflect on their priorities and focus on shorter time scales. In this article, we consider five key themes we expect to shape retailers’ strategy in 2021 and share videos of this in practice.

1. Drive for value

Delivering value has been a defining trend in recent years. However, consumer confidence has suffered across the region due to the COVID-19 pandemic.

This is likely to be heightened in 2021 as the pandemic’s economic impact is felt and many households feel financially challenged.

Price cuts, the role of private label, loyalty schemes and new store formats are key enablers, as retailers look to redefine the price-value equation further.

Watch the video below to see Lidl’s new loyalty scheme, Lidl Plus, which is being rolled out across Europe. The scheme is 100% digital and offers a range of features, including money off coupons, specific rewards, digital promotional leaflets and receipts:

Source: Lidl GB, YouTube

2. Delivering digitalisation

Retailers are continuing to use digitalisation to make the in-store experience more convenient and efficient.

This includes specific innovations at key parts of the customer journey, including electronic shelf labels and the rollout of mobile scan and go technology.

A growing number of companies are also rolling out unstaffed stores, with the pandemic accelerating the potential of these stores in the future. Elsewhere, retailers are partnering with technology providers to provide increasingly personalized online experiences.

Watch the video below to see Carrefour’s health-focused, personalised online tool in partnership with INNIT in France. The solution recommends products to shoppers based on their individualised profile, which looks at their food preferences and allergies:

Source: Carrefour, Alliancy.fr

3. Ecommerce acceleration

Although markets remain at different levels of advancement, the pandemic has driven increased online grocery penetration across Western Europe.

Retailers are investing to expand their online capacity and make the customer experience more relevant, shopper-focused and seamless.

They are also partnering with technology companies and last mile providers to help retain shoppers and drive volume.

Watch the video below to see how Albert Heijn is strengthening its position as an industry-leading omnichannel retailer, boosting online delivery capacity to do so:

Source: Albert Heijn, YouTube

4. Innovating with formats and ranges

Retailers continue to invest in new store concepts and ranges to remain relevant in a changing world. This has the potential to attract new customers, drive differentiation and grow average basket size.

Meanwhile, the pandemic has accelerated the potential and popularity of click and collect services and formats. These allow shoppers to conveniently order groceries via an app for collection on the same day or shortly thereafter.

Watch the video below from the Kesko Capital Markets Day to see how Kesko is partnering with restaurant brands to drive differentiation. ‘The value of shopping baskets with Jim Lim by Farang products is €58, 34% higher than the value of baskets with similar products’:

Source: Kesko, YouTube

5. Stepping up on sustainability

Sustainability remains at the heart of retailer strategies. Many continued to focus on meeting their targets despite the pandemic.

Companies are prioritising several sustainable initiatives including introducing alternatives to single-use plastic, making it easier for shoppers to make sustainable choices and reducing in-house waste.

Watch the video below to see Penny’s sustainability experience store that spotlights key environmental initiatives. These include Fair Trade products, sustainable packaging, protecting biodiversity and the use of renewable energy:

Source: Penny, YouTube

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