Grocery retail saw large shifts because of covid. The influence led to a significant shift in consumer behaviour, resulting in a surge in online grocery shopping. Brands experienced stock shortages and witnessed mass panic buying - creating a new spike in demand for certain products. As shoppers revert to their pre-pandemic habits, it’s clear that some things are returning to normal but others still have a long way to go! Post-covid, it’s crucial for brands to get their strategy right and prepare themselves for 2022. We spoke to some of our experts in the sector. Hear from Adrian Hussey, Customer Development Director at McCurrach, Ashley Devlin, Account Manager for Unilever and Jamil Bheepathee, Account Controller for Britvic to get an insight on what’s changed for them, what opportunities and trends lie ahead and how brands can win in this marketplace.
The grocery retail sector has seen significant shifts over the last eighteen months due to the pandemic. What do you think are the biggest changes that have occurred and what should brands consider when they prepare their FY22 strategy?
Adrian Hussey, Customer Development Director - McCurrach
There definitely has been a growth in online, we’ve seen this move to a reasonable scale and I think this will be sustained overall. Therefore, this places a different challenge on retailers as they are going to have to manage their online presence differently and more closely than they have before. This is transforming the availability and look in store as more staff are shifted in to picking and packing of online deliveries which impacts store resourcing and availability of stock on shelf daily. This is a fundamental shift which brands will have to get their heads around and look at how they execute online and in store without one disrupting the other.
Another important factor to consider is Government guidelines that will kick in, in FY22 around high fat sugar and salt products (HFSS regulations) as this will have a material impact on how they can promote online, how they can sell their product in-store. There’s a lot of work that will need to go in to FY22 when it comes to this.
Ashley Devlin, Account Manager – Unilever
I think the biggest shift has been to online shopping. During the pandemic, people were not going out to supermarkets as regularly or even at all. Many people moved to online shopping and in the last few months now that we’re back in store again, we’re being pushed towards more of a smart shop using our phones. There have been fewer social interactions with staff and less product in store - that's been a real change for us across the last year. It really does feel like things are more geared towards online now. Even when looking at some of our clients, I’m seeing more of a spend on online marketing.
We’ve also experienced more redundancies by retailers and the “pingdemic” coming in to play which has left stores light on staff. When I speak to my own clients about strategy, I think about how they can leverage having feet on the street. Unilever invests in a field team, as do many suppliers, from a support function point of view - they can look at availability and make sure shelves are full. Another thing to consider is what does my product look like when it gets to store? I’d be looking at my shelf ready packaging and how I can make it super simple and easy to merchandise because we don’t have as much time in store; it’s about simplifying the whole load up system.
One of the trends that we have been discussing with one of my client’s is sustainability. I think all retailers are looking for that right now and brands should really be considering this as part of their FY22 strategy.
Jamil Bheepathee, Account Controller - Britvic
In the last eighteen months what we’ve seen in grocery is the turbulent nature of the spikes in demand. People’s habits have been forced to change – they’re eating at home more than they were. Things are starting to open up and the grocery sector still seems to be performing ahead of last year and still experiencing growth but there’s been a lot of turbulence which is continuing in the sector. Stock availability is the biggest issue at the moment, driven by many factors – including the lack of HGV drivers that we’ve all heard about in the news recently. For Britvic, we know there are shortages in ingredients due to the pandemic and Brexit has impacted production.
Brands have got to plan for these peaks and troughs and be flexible in how they approach grocery for the future. They need to consider their promotional calendars and how they approach this to maximise sales and availability in the next twelve months.
What approach should brands take post-covid and are there any new opportunities they can take advantage of? (Please highlight any products or services that will be important to brands in FY22 and why)
Adrian Hussey, Customer Development Director - McCurrach
We need to stop looking at covid as a discrete event, it’s all about the kind of impact that it has had. It challenged us in terms of thinking about supply chain, about the flexibility of resource and how people get to work. If you view that as starting to recede into the rear-view mirror and then think things will go back to normal, that's where there will be a big mistake. If it’s not covid it will be something else that comes along and challenges you. The big thing from a brand perspective is having real resilience and flexibility built into their approach and not having too rigid or fixed a view. The opportunity is to be more dynamic in the way that you set yourself up and organise yourself going forward. That’s why being able to deliver data-led, on demand services and to be agile in the way you build big campaigns and seasonal initiatives will be fundamental in all activities and strategies.
Ashley Devlin, Account Manager – Unilever
Being able to invest money in any kind of field team or activation is always something I'd be looking at. The other thing that's massively helpful and has changed the shape of everything over the last year has been data. From a field team point of view, the fact that it drives us to the right stores at the right times and allows us to take the right actions is obviously fantastic and such a time saver for us. I think more clients and other suppliers should really jump on that bandwagon when it comes to this and think more about what they can learn from the data. The EPOS analytics tool DART has been a total game changer for us with Unilever. We use it with the field team and it's really changed our shape of service over the last couple years. We now have a dynamic element to our call file – we only go to stores when we’re alerted to and the data tells us where we have corrections to make. We also have the DART head office app too which allows us to track any trends – it’s a well-rounded, holistic tool for the team to use.
Activation is massively important and gives the ability to assist and support stores and your campaign when needed. If you already have a core team adding an activation element gives you that opportunity to ramp up your visibility in short bursts and turn this down again when the season or promotion is over. It offers complete flexibility and agility which is exactly what our clients are looking for.
Jamil Bheepathee, Account Controller - Britvic
I think what we're going to experience in next 12 months is inflation. The impact of the shortage of lorry drivers and bonuses will lead to food inflation which will become a challenge for brands. They will need to understand where the value lies as consumers and customers will look much more for the value in products going forward. The discounters will have another day in the sun as the big fall for brands will be battling to keep the prices down. Established brands who have the flexibility within this will be the ones who win. When looking at my own client Britvic, the soft drink market is very competitive but if they can manage their stock levels and support their brands there is an opportunity to succeed.
How can agencies best support brands to maximise sales in this new retail environment?
Adrian Hussey, Customer Development Director - McCurrach
If you viewed it at a macro level, agencies are uniquely set up to support brands in a world where things are volatile and uncertain. The flexibility to scale up and down resources that you need the most is something that agencies are really good at. Agencies can best support brands by offering agile, data-led sales operations that can be dynamic and flexible enough to respond to the needs of the client. Data has been THE trend over the last five years with it being used with quite a rigid framework. Breaking free of that rigidity and using data in a more agile and flexible way is going to be the real journey over the next five years. If you’re a brand with money to invest, data can help you choose to shift your investment from one area into another else because there’s been a big change or opportunity that wasn’t predicted from the outset. Using data to drive strategy gives brands more flexibility than ever before and they can use it to make quick changes to their teams in short time frames – they don’t need to wait until the following year or until their agreement or contract is up for renewal. This is something we specialise in at McCurrach – we always encourage brands to make decisions based on current data and information and make the most of opportunities in the sector to help them win, now.
Ashley Devlin, Account Manager – Unilever
I think it’s about having that absolute agility. Being a trusted partner is great because you don't just always have to be reactive, you can work on that proactivity as well.
Every agency should work really closely with their partner, look at the year ahead and ensure that they’re able to match what the client is looking for. For example, we know Christmas is going to be a busy time for brands. What are we doing to support that right now and how are we going to ramp it up with activation? We're going to recommend different ways to use the team to maximise opportunities.
Jamil Bheepathee, Account Controller - Britvic
Agencies need to continue to have excellent execution at that point of purchase and the ability to offer insight. A lot of the greatest plans are created in head office but nothing happens until it happens in store. Therefore, we as a business need to provide our clients with insight on what’s actually happening out there and give them solutions on how to best execute this and win in the marketplace.
If you need to secure your post-covid strategy or plan for 2022, now is the time to take action!
Get in touch for a 1:1 chat and let our field marketing teams support your brand to win in the grocery sector.
