Shoppers’ satisfaction should be pushed deeper into boardrooms, says IGD chief

In the face of huge turmoil, food and grocery companies can help turn around declining sales by pushing shopper satisfaction deeper into the heart of the boardroom.

This is one of the recommendations outlined in a speech on Tuesday by the chief executive of the food and consumer goods research organisation IGD, whose other suggestions based on shopper evidence include:

Focus on value not just price
Avoid complexity when it comes to shoppers
Adapt the retail experience for advances in innovations and technology

On why the industry is facing so much disruption, Joanne Denney-Finch, IGD Chief Executive, said: “We’ve seen remarkable growth for the UK economy this year, but food stores’ sales in the year to July fell for the first time on record. I’ve never seen so much turmoil before during my lifelong career and to understand why, we’ve examined how shopping behaviour has fundamentally changed in recent times.

“People are now shopping around more, investing more time to get the best quality and ethical standards possible for their budget. On average, we make 24 shopping trips per month and use four different types of retail formats when buying our food and groceries. And yet people still don’t want to spend any more time and effort than they need to.”

She explained that companies should be aware of five areas identified by IGD shopper research:

It’s not just about price, it’s also about value for money – which differs from person to person
Greater personalisation of the shopping experience
Utilising technology to allow us to shop smarter
Small companies are increasing in importance
Rising importance of trust as loyalty becomes more important

Elaborating on her recommendations for change, Joanne Denney-Finch, said: “Our research shows evidence of a shopper backlash against complexity which needs a deeper emphasis within the boardroom. People tell us they are faced with a promotional blizzard when buying groceries, so clearing the fog over pricing is a priority. Promotions will always have their place in retailing but they should be used decisively and be guided by shoppers. Over half (55%) of shoppers want price cuts more than multi-buys…..three times as many (17%) in 2007. People want pricing that makes a real difference!

“This is one reason why discounters have grown in popularity from a low base. Shoppers have told us the discounters have listened and responded to them – almost as if they’ve been eavesdropping on the negative views I’ve heard.

“And the figures bear this out: over half of shoppers (54%) tell us they’ve used a discounter in the past month, which is the highest level for four years when we started tracking the data. Examples of good retail disciplines that shoppers tell us they like about discounters include: it’s easy to find things, they can get around the store really quickly and the meat is clearly labelled as British.

“As Britain’s most important industry, worth more than car and aerospace manufacturing combined, and feeding over 26m households every day, we need to be even more customer-focused, fast-moving and inventive. And while more disruption lies ahead, it’s nothing that food and grocery companies can’t turn to their advantage by listening harder to shoppers and acting decisively on what they say.”

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