January/February10The
“Supermarkets are becoming far more efficient at realising how the consumer decides on a product and are making that decision easier for them, as a result.”
Retail News Interview
fortified with supplements: many consumers don’t even look at the brand or the expiry date. You might need to replenish milk stocks 10 or 15 times per day, but the challenge is in getting the other mix of products right in your chilled cabinet. “Category Management attempts to ascertain what the consumer is thinking when they’re at the shelf,” he continues. “In the wine sector, for example, a lot of retailers have the wine separated into white and red, as the first decision the consumer makes is whether to buy red or white wine. These retailers are looking at the consumer decision process as a decision tree and working out how to make it easier for consumers to purchase. A typical example is the soup sector: consumers regard soup as quick, convenient and nutritious,
are making that decision easier for them, as a result.”
which is similar to the way they think of instant noodles, for example, so retailers are starting to merchandise instant noodles beside the soup fixture, whereas before, they may have been located beside the pasta section in-store. Supermarkets are becoming far more efficient at realising how the consumer decides on a product and
market positioning to increasingly compete on low prices. Other groups, like SuperValu/ Centra , have also maintained their share, thanks to their strong advertising campaigns, highlighting the fact that they are local stores, owned by local people, looking after the local market, while SPAR have heavily
Polarisation of the Market The retail market, in general, is far more polarised than in recent years, with premium retailers performing particularly well, as are those retailers operating in niche sectors. Describing the sector as a wellshaped curve, with low-cost operators on one side and niche players on the other; he feels that those retailers who will continue to suffer in terms of market share are those who fall in the middle. Dunnes Stores have dropped market share by 3%, according to recent figures from TNS, which O’Reilly attributes to this factor, while other retailers like Tesco have maintained share by adapting their
week or a month old. You are able to get very quick reactions to new product introductions, promotions and to the stock assortment that you have in-store. This is going to be driven by technology: companies who utilise this technology are going to be at the forefront in delivering consumer value.” Many specialist retail technology companies are now offering end-toend solutions, according to O’Reilly, looking at where you are sourcing product from, how it gets to your store etc. “For example, a lot of delivery trucks used to come back empty to their warehouses, but now, thanks to the introduction of cross-docking and more sophisticated logistics systems, some retail groups have an 80% backfill, whereby four out of every five of their trucks are full on the way back from a delivery.”
Category Management More retail groups are using Category Management concepts than ever before, according to O’Reilly. “Retailers are increasingly managing their stock by category rather than managing by brands. It’s not just a case of merchandising: it’s deciding what product goes on the shelves, how many facings it needs etc. In the milk sector, for example, consumers tend to purchase by colour, where blue is full fat milk, green is low fat and red is
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