Progressive Grocer - March 2009 - (Page 94)

Technology FutureView Retail 3.0 The next wave of retail puts the power in the hands of the shopper. Green Hills CEO and customer data expert Gary Hawkins tells how to prepare for it. By Gary Hawkins e are at the dawn of the next profound power shift in the retail supply chain, and unlike past generations of retail, this time it’s shifting to the individual shopper. Addressing this shift portends massive transformation in how the industry produces and distributes products, goes to market, and measures success. This is Retail 3.0, and this column launches what will be a series of articles covering the various components of the Retail 3.0 ecosystem. To put this in context, consider how retailing has been done in the past. The development of national broadcast television in the 1940s facilitated the growth of national brand consumer goods as manufacturers leveraged the new medium to reach broad swaths of the population efficiently and effectively. For decades subsequent to that event, consumer goods manufacturers held sway in the industry using their significant revenue and profit margins to fund consumer research, direct-to-consumer promotion, and national advertising. These same companies helped turn marketing into a science. Retail stores were seen simply as real estate to be leased or purchased to facilitate distribution of the valuable national brands. Power within the supply chain clearly resided with 94 • Progressive Grocer • March 2009 W these retailers used their newfound size to adopt some of the same sophisticated marketing skills formerly the province of the national brands while also funding development of strategic private label programs. Such events began the shift of power in the supply chain to the retailers and away from the manufacturers. But it was a second significant trend occurring simultaneously and ultimately converging with the first that more clearly marked the end of an era: the development and rapid growth of loyalty programs within many retail channels. It was not loyalty that was of importance so much as it was the detailed shopper purchasing data gathered through the programs. While it can be argued that many, perthe manufacturers. This haps a majority of, retailers launching such was Retail 1.0. programs — a trend that spread like wildfire It was in the mid- Gary Hawkins of Green Hills and through supermarket and chain store drug 1990s that two signifi- Hawkins Strategic retail sectors in the mid- to late-1990s — have cant trends reached a failed to live up to their initial promise, the tipping point and began to converge. The first was accumulation of such powerful data, combined with consolidation in the fast-moving consumer goods consolidation, indeed drove the power shift. For the (FMCG) retail channel, in part caused by the first time, retailers had more powerful and actionable growth of Wal-Mart and its entry into such new data than the consumer goods manufacturers. This was Retail 2.0. channels as food retailing. The net result was fewer, bigger, retailers — significant market share held by a handful of companies. These larger retail firms leveraged their size and buy- Several Drivers Just as with previous shifts in industry power, ing power into a more forceful position when dealing with the consumer goods manufacturers. In addition, it is the convergence of several developments A H E A D O F W H AT ’ S N E X T www.progressivegrocer.com http://www.progressivegrocer.com

Table of Contents for the Digital Edition of Progressive Grocer - March 2009

Progressive Grocer - March 2009
Contents
Front End: Ahold Banners Launch 'Major Consumer Wellness Initiative'
Nielsen's Shelf Stoppers/Spotlight: Frozen Foods/One-Food Oriental Entrees
Market Snapshot: Miami-Ft. Lauderdale, Fla.
Independents Report: The New Agenda at FMI - And in Washington
Lempert Report: What Shoppers Will Demand in 2009
Wake-Up Call: Back to the Future
Progressive Views: Looking Forward
Frozen & Refrigerated Trends: Staying Cool
Store of the Month: Straub's Newest Family Member
FutureView Introduction: Great Expectations
Futureview: Magnetic Core
Honey: Sweet Sensation
Organic/Natural Cereal: The New Face of Breakfast Sales
FutureView: Home-Cooked Homecoming
2009 Meat Operations Review: Solid Ground
2009 Seafood Operations Review: Rough Seas
Pharmacy: A Destination for Health
Technology FutureView: Retail 3.0
Equipment FutureView: Sustainable Differentiation
What's Next: Editors' Picks for Innovative Products

Progressive Grocer - March 2009