Free Subscription

  • Access 15 free news articles each month

Professional

Try one month for $7.5
  • Unlimited access to news,insights and opinions
  • Quarterly and weekly magazines
  • Independent research reports and forecasts
  • Quarterly webinars with industry experts
  • Q&A with retail leaders
  • Career advice
  • 10% discount on events
×

Ripping up the retail rulebook

Image of finger on a touchscreen.
Image of finger on a touchscreen.

A quick look at Google’s Community Mobility Report (as of mid-April) reveals a telling picture of lockdown’s impact on retailing. Grocery and harmacy store visits – pretty much all that was allowed under level 4 – were down -37 per cent vs a median week, as shoppers slashed their weekly trip numbers.

There was an impact in-store too, with less browsing the aisles and a focus on spending the least amount of time as practical in store. Despite these fewer trips and less browsing, grocery saw value growth of +28.6 per cent (4 weeks to 19/04/20).

During this time, Kiwi consumers found alternative ways to shop, with many other businesses offering essential goods quickly adapting to find ways of delivering safely under strict level 4 guidelines.

Going online

Countdown opened its first dark store in Penrose this month, capable of fulfilling over 7500 orders a week, tripling its estimated ability to process pick-up orders.

Countdown also closed six other stores temporarily to support online demand and transformed its new Rototuna store into a “store-to-boot” drive-thru. New World and Pak’n’Save have extended services, with customers’ time slots now released seven days in advance.

With traditional revenue sources drying up, food-service wholesalers like Bidfood, Gilmours and Service Foods are moving to supply end consumers directly. Smaller FMCG businesses have also adapted. Many businesses ranging from local fruit and veggie suppliers, convenience stores, alcohol suppliers and pet food companies have revamped their offering and moved sales online.

Making a meal of kit

Meal kit delivery services are flooded with orders, with My Food Bag reporting its biggest weekend ever. The company reported sales up +50 per cent in the week prior to lockdown, as the suspension of UberEats and takeaways loomed.

Eat my Lunch is among those modifying their business models, delivering fresh essentials (fruit, veggies and bread) to the door, while continuing to offer lunches to Kiwi kids in need. Angel delivery is another business helping Kiwi families, providing food care packages for personal consumption or gifted to perhaps an elderly relative or neighbour.

What is a shop?

Overseas, we’ve seen many businesses adapt to shoppers’ changing needs under lockdown. More than 2000 UK pubs have turned their premises into grocers, selling essentials like eggs, bread and milk for collection. At McDonald’s in Australia you can now order a side of milk and eggs with your Big Mac takeaway or delivery. Walgreens allows shoppers to pick up selected grocery items at its 7300-plus pharmacy drive-thrus across the US, improving convenience and social distancing.

Beyond COVID-19

As NZ moves down through lockdown stages, we’ll start to see how retail might look in the future. Stores will need to be inventive in accommodating social distancing while serving higher volumes of customers. How can retailers adapt space to accommodate high-demand categories and increase capacity for online orders? Digital initiatives such as in-store apps and cashless payment will accelerate, and we may see 100 per cent self-checkout stores open, including Amazon-style ‘just walk out’ technology.

For more information on how IRI can provide data and insights to grow your business, click here.

Vicky Morgan is account director at IRI.

Sources:

IRI Market Edge Grocery data 4 weeks to 19/04/20

Google COVID-19 Community Mobility Report

You have 7 free articles.