A glimpse into the future of retail

Natalie Berg has deep industry expertise, with more than 15 years’ experience heading up research teams at world-leading analyst firms Planet Retail and Kantar Retail. As one of the Top 30 global retail influencers, Berg has published research on a number of industry topics including the convergence of physical and digital retail, click & collect, supermarket loyalty and the store of the future.

We caught up with her on her views on loyalty and the store of the future.

What can retailers do to ensure that their physical stores remain relevant to shoppers in the future?

Be ready for the divergence between ‘buying’ and ‘shopping’ in the future. Consumers will spend less time buying the essentials, as auto-replenishment and voice technology gain momentum, which will require retailers to rethink the physical space. Stores will first and foremost need to embrace technology to offer the convenience, ease and personalisation that was historically only found online. But there is also an urgency to reposition stores as genuine destinations by becoming more service- and experience-led. Food emporiums, cafes, restaurants, co-working space, retailer concessions and gyms are all possibilities.

How big is the threat of Amazon to grocery retailers?

They will revolutionise the way we shop for groceries with a frictionless, highly personalised service. They have already been a phenomenal catalyst for change in areas like same-day delivery, checkout, voice technology, and simplified replenishment. Amazon’s relentless dissatisfaction with the status quo will have a knock-on effect across the sector as competitors are forced to raise their game, all to the benefit of the consumer.

But Amazon’s move into grocery should worry all retailers, not just supermarkets. With groceries, Amazon gets frequency. This opens the door to its wider ecosystem and once the Prime blinders are on, Amazon becomes the default shopping option.

 Which retailers or service providers do you admire in their approach to creating loyalty?

Amazon Prime creates loyal, lifelong shoppers. By clustering a unique range of services – from unlimited delivery to music and video streaming – they can tap into not just share of wallet but share of life. (No surprise Amazon practically gives Prime membership away to university students – locking them in as loyal members of the club just as they begin to gain financial independence).

Amazon has made Prime so attractive that, in Jeff Bezos’ own words, shoppers would be “irresponsible” not to join. It’s increasingly giving customers to access to a lifestyle of convenience. If shoppers want to utilise Dash buttons, in-home delivery, or voice-activated shopping, just to name a few – guess what, they need to be a Prime member. It’s a bundle proposition provides incredible value, but crucially isn’t centred on discounts. Not many other retailers have the scale, infrastructure or cross-sector dominance to produce a copycat version.

Do loyalty cards actually create loyalty?

No, the term ‘loyalty card’ is a misnomer. In fact, these cards often encourage the very opposite behaviour given their emphasis on discounts and vouchers. This is also a reflection of changing shopping habits and proliferation of choice. Shoppers today buy more frequently, in smaller quantities and across a range of different grocery retailers. The idea of swiping a card at a till in exchange for some points is dated. It’s not what attracts us to a supermarket.

Natalie will be discussing this in more depth at tcc global’s Loyalty Reimagined in Barcelona between 29th – 30th May.

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