“The supreme accomplishment is to blur the line between work and play”
– Arnold J. Toynbee
Three piece suits in aisle three, near the apple juice and milk.
Sound bit strange, silly, unconventional, and farfetched? Not fitting the rules of the supermarket? Breaking the mould?
From price wars to change in consumer spending behaviour, click and collect to new international entrants; there are many components shaking up the supermarket industry in Australia today.
European supermarkets have long been expanding their product offering from homewares to fashion to cater for today’s destinational shopper who seeks the ease and convenience of buying all their goods in one place. For many years Asda in the UK have hosted hairdressers, cafes and childminding services in store. For example, our business partners in the UK have highlighted this change in consumer behaviour can be seen from the success of John Lewis’ click and collect offer with Waitrose, as well as Argos setting up a shop-in-shop within Sainsburys.
As convenience and cross-category shopping is on the rise will we see Australia adopt similar strategies?
Back home we’ve seen Coles’ plans to roll out new self-service checkouts to create a quicker, easier and more efficient shopping experience for customers, while Woolworths is investing in a back-to-basics approach to upgrade fixtures and fittings making its stores more desirable.
Further as we know, the newer entrant Aldi has been one of the first to step up their game by expanding their product offering through a new collaboration with fashion designer Collette Dinnigan, which attracted thousands and sold out in a matter of hours. A move that has worked for years for British supermarkets, many of which now have successful own-brand clothing lines. One of the most successful is F&F by Tesco which has grown into separate standalone stores in central Europe and franchised outlets in the Middle East. Therefore it came as a surprise to many to hear of Tesco’s latest plans last week to strike a deal with Sir Philip Green and bring retailers from the Arcadia group into the Tesco mix.
Arcadia’s brands such as Dorothy Perkins, Burtons and Evans, will enter five of Tesco’s biggest stores and will sit alongside other third-party outlets including Clarie’s Accessories and Sock Shop. Tesco reportedly believes these brands will complement their existing offer and not be a direct threat to F&F.
The move by Tesco aims to meet the ever changing needs and expectations of its customers as customer buying behaviour moves from weekly trolley to basket and mobility means consumers are making more decisions on the run. Recent studies have shown whilst shoppers are grocery shopping more often than 2-3 years ago, they are visiting larger stores less often. Consequently, Tesco’s deal with Arcadia is part of an ongoing strategy being explored by all supermarkets in the UK to give shoppers more reasons to visit the larger stores. This is also a strategic move by supermarkets to fill the store space of items that are moving online. Sainsbury’s reportedly estimates that within five years, 6 per cent of its space will no longer be needed.
While there are many differences between Australian and British shopping behaviours, Australian consumers are famously fans of the destination shop, with many hitting shopping malls rather than the traditional high street format of the UK. So could this be the future direction of our Australian super markets?
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First published on Inside Retail on the 4th of November 2015