Adapting to the next generation of consumers is a key subject of discussion among food retailers right now. Software giant Oracle has just released the results of a survey that sheds some light on the shoppers of tomorrow. Sam Webb reports.
How grocery retailers react to the next generation of consumers is subject to a great deal of scrutiny at the moment.
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The ‘digital native’ – younger people aged between 15 and 24 whose adoption of technology is second nature – will soon be leaving home, raising families and, most importantly to supermarkets, doing their own food shopping. What can be done to engage them, build a dialogue and ultimately get them down the shopping aisle?
At the World Retail Congress in Berlin this week, Oracle, the business technology company, released a white paper called ‘The Future of Retail: Through the Eyes of Digital Natives’.
It contains the results of a survey that Oracle commissioned to examine the attitudes of 10,000 young consumers in the UK, Germany and France to current shopping needs and how they feel retailers should support them going forward.
Mike Webster, the senior vice president and general manager of Oracle Retail, leads the global business unit’s solution groups, strategic planning, product development, sales, service and support. He outlined some of the key findings to just-food, some encouraging, some perhaps troubling to certain chains.
“I think what the research suggests, first and foremost, that store-based retailing will remain the primary shopping outlet in 2025. Store-based retailing as a dead industry is wildly exaggerated,” he said.
“The second key finding is [the digital natives’] desire for a contact interaction – how is it that you bring a higher level of integration, whether it’s in-store, online, call centre, mobile or catalogue. The third is their desire for personalised content. We found that eight out of ten promotions they receive have no relevance to them. Promotions are not meeting the needs of the digital native today.”
Supermarkets, however, appear to be engaging well with the digital native. Webster says European chains have been particularly quick to grasp their needs.
“Some of the favourite retailers that these digital natives identify with are the big food guys, specifically on price and choice,” he said. “Tesco is doing a tremendous job. They are a leader in providing a connected experience.”
But there is still work to be done in terms of identifying the consumers in the face of the numerous ways that grocery retailers engage with them.
Companies that want genuine insight into shoppers’ buying habits and desires must unravel the various avenues they now use to communicate with them – and Oracle is unifying each of these channels.
“Despite an explosion in processing power, storage and business intelligence, to a large part consumers remain anonymous to food retailers. Sometimes the customer is a loyalty number, sometimes it’s a private label credit card, an address, an e-mail or a web ID. To a food retailer one customer can look like eight different individuals.”
The technological tools available to retailers, from online promotions to business analytics, is vast, but the survey also discovered something of key importance to digital natives that is as old as commerce itself – price.
The white paper found that price is the single most important element of the shopping experience for digital natives.
It states that price is “critical” for these consumers, which, it says, could have been driven by the fact they came of age during a period of economic downturn, and that they appear to be more financially independent (half of the respondents from the UK and France claim to have little or no financial help from their parents). Therefore, the report says, these circumstances may also explain why the top five retailers visited across Europe were Tesco, Carrefour, Auchan, Aldi and Lidl.
“Price is number one in 2025 – it’s not going to be recommendations on a social network, it’s not going to be mobile promotions. It’s price,” Webster said.
So how is the digital native going to be a part of the online grocery shopping boom? Webster says some already are thanks to outreach programmes by supermarkets and the numbers will continue to rise.
He added: “Over time I believe that digital natives’ needs will change as they become householders and start families. They will enjoy the convenience benefits and rising fuel prices will engage them as we move towards a more urban-based retail environment.
“But great retail is great retail, it doesn’t matter whether that’s in-store, mobile or home delivery – they all have to deliver.”
