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What is retail innovation and how to apply it in your day-to- day business?

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In order to dodge the crisis that meant a drop in retail figures, much has been said about creativity and innovation. Several managers used consultancies and agencies to reduce costs and bring novelties to the shelves. But what is innovation?

Innovation is what transforms what is old into something new, a different way of doing what is ordinary, new customs, processes, ideas. Defining what innovation is can be a challenge because it is a concept related to context, time, and place. What is innovation today may be dated tomorrow. What is new here may already be old out there, which is a surprise to a particular industry may already be commonplace for another in the retail sector. Thus, in order to speak about innovation, first of all, it is necessary to contextualize it.

Therefore, to understand what innovation is in retail, it is necessary to know the shopper of this type of retail: how he/she behaves, what he/she seeks, what he/she feels, how he/she circulates, what he/she chooses and wants. To answer these questions is to outline a persona’s profile that could lead the way for the development of initiatives that will surprise him/her by delivering to him/her something that he/she will classify as something new.

Watching out for supermarket trends around the world by monitoring actions and relevant news in the specialized, traditional, and social media, it is possible to have a collection of novelties in the sector. In order to outline what can be considered innovation in supermarkets, we have segmented trends into three groups. In the first group, there are the trends related to technology, such as the proliferation of apps and technological tools that map and promise to facilitate the circulation of a shopper in the retail and be practical at the purchasing moment, as well as the customization of special offers and 2 communications towards him/her. In the second group, there are the trends related to the environment, the investments in new decorations and spaces that attempt to be seen as more comfortable, pleasant and familiar, in tune with the shopper’s expectations concerning a place for his/her basic and daily needs. In the third and last group, there are the trends related to a shopper’s behavior, what he/she has been looking for in supermarkets and that regarding his/her concerns and priorities.

Analyzing these segmented trends in the three groups, it became clear how all the actions and initiatives carried out by supermarkets around the world have been geared towards meeting shoppers’ demands related to three main lines: sustainability; practicality and convenience, and quality of life. This means that shoppers, when shopping at supermarkets, seek not to waste time, to be fast and objective; they prefer pleasant places with parking spaces or home delivery or any other amenities that will make their lives easier, they prioritize healthy food and to get to know where it came from, they look up information about the products they consume, they evaluate companies and brands in relation to their sustainability attitudes towards the planet and their community, choosing by themselves activities and products that consume less natural resources from the environment. Shoppers have aimed to shop at supermarkets with gourmet products, places that offer professionals that teach and explain about products and recipes; high-end environments with a simple countryside-like atmosphere, giving the impression of fresh produce coming straight from the country, from farmers. Shoppers have said no to waste and thus migrated to places where there are packaging options that allow them to help themselves to the amount of items they want. Technology helps to support all these actions, offering apps that allow shoppers to save time and be practical while shopping.

This shows us that shoppers are increasingly engaged, aware, concerned with the origins of their food and the production, and the resources spent in the process. The same attitude by shoppers can be seen in their quest to visit beer factories, wineries, olive plantations, organic fairs, and their growing concern about who works in the manufacturing of garments and furniture. On the other hand, the time for shopping should be quick and without hassles so that the time left can be spent with family members or used to engage in a hobby, such as playing a sport or cooking.

Analyzing these segmented trends in the three groups, it became clear how all the actions and initiatives carried out by supermarkets around the world have been geared towards meeting shoppers’ demands related to three main lines: sustainability; practicality and convenience, and quality of life.

Therefore, marketing strategies within supermarkets that reflect these three demands (sustainability, practicality and convenience, and quality of life) are interpreted by shoppers as innovation, as something new and in accordance with what they expect for the future. But how to apply this to the daily routine of supermarkets, when there is no large budget or time for structural changes?

The trade secret is to be able to transform these three demands into a point-of- sale strategy of actions and to create doable action plans. Often small actions can bring the perception of what is new and fulfill some of the shoppers’ expectations. Swapping a plastic bag for one made with recyclable materials, placing leaflets with product information on the shelves or with suggestions of recipes, or even having a knowledgeable employee in the wine or groceries sectors, a cell phone charging station or an entertainer to take care of kids while shoppers do their shopping are small examples of what can make a difference. Having a self-checkout section can make the shopping experience easier and faster, for example, reducing lines and allowing shoppers some independence. Even if these actions may already be commonplace, they still seem like innovation and in line with future trends, and as important as they are, sometimes some simple interventions can lead to an increase in sales, the ultimate goal of any commercial establishment, especially in times of a crisis. After understanding what retail innovation is all about, all that's left is to let one’s imagination go wild.

 

Manuela Castro
Designer, expert in shopper marketing strategies and point-of- sale communication materials.