Daniel Lucht is the researcher director of Research Farm, a company that works with FMCG manufacturers and retailers and analyses trends before compiling reports that clients can act on to improve their marketing strategies and ultimately increase sales.
I caught up with him this morning to delve a little deeper into the third annual white paper that Research Farm have produced, the Retail Predictions 2013.
Daniel, you mention in your paper that discounters will thrive in 2013, does this mean you believe loyalty schemes are the way forward for retailers?
Yes, loyalty schemes are always important as retailers have now realised that in these tough times they can make more money by focusing on existing customers and upselling rather than trying to convert new ones. Consumers will shop around however if the right deal is offered at the right time, they will stay loyal to a brand.
You mention the rise of Same Day Delivery do you think this will become the norm in 2013?
I think consumers will begin to expect the service as 2013 is showing trends of immediacy from the consumer. Every shopper wants to buy it now and receive it in hours while shopping from their tablet or laptop while at work or watching the TV. Through 2012 Amazon has opened twenty centres to be closer to customers and fulfil this need and Wal-Mart is exploring ways in which they can follow suit.
Will this compete with or complement the current click and collect trend?
I think they’ll act as one and the same, fulfilling the immediacy that a consumer desires. Retailers will look more into collect points that are placed on a journey home from work, such as the local train station, so the shopper can order from the office and doesn’t have to make a detour to pick up a package. Both will explore the logistics of making sure products can be available almost immediately in different locations.
Tesco’s claimed last year that their home delivery service actually cost at least 3 times more to provide than the cost that was given to the consumer, they toyed with the idea of increasing the cost of home delivery. Do you think the same day delivery will have a negative financial impact on businesses who adopt it initially or will these costs be passed on to the consumer?
I think initially retailers understand that there will be extra costs; it’s the chicken and the egg syndrome. Once popularity increases and they have more customers to deliver to in a certain area, they can ensure vans are full which will cut down on costs and on carbon emissions too. However, the consumer will understand that if for example, they need a party dress delivered within hours; they will have to pay a premium for that service. Like before, I don’t think they will use the service all the time but I do think they will expect it to be available.
You also mentioned that technological advancements for retailers will be slowing down this year do you think this is because investment is need to perfect the latest advancements such as NFC technology and Mobile Wallets?
I think that technology has developed very quickly over the past decade and this year retailers will focus more on collecting data and using it to increase sales, such as the loyalty schemes. Last year there was a lot of hype surrounding NFC technology however Wi-Fi is everywhere now and people can do the same using Wi-Fi just as Starbucks has proved.
Do you think it’s telling that the iPhone 5 didn’t adopt it?
Yes. If Apple offered a mobile payment solution it would be a game changer, however for NFC, so many different companies must adopt it to make it work for a single transaction, such as the handset manufacturer, the banks, the credit card companies, the retailers, and instead I think the focus will be more on offering mobile payment through Wi-Fi in store, rather than adopting NFC.
Do you think there will be any developments in the technology sector this year?
I do think there’s more to explore with mobile wallets, however I think the focus will shift to entertainment and TV shopping will see huge advancements this year.
Which Retailers do you think will thrive in 2013?
Unfortunately 2013 looks to be another tough year, as the news of Jessops, HMV and others has proved, however I think those that embrace multichannel retailing, loyalty schemes as well as the discounters will do better than the rest. Affordable discount stores such as Aldi, Primark and Ikea should do well this year as consumers continue to look for the best deals to save money, yet those who offer the consumer what they want and integrate the new trends will have a good chance of success.
Daniel collected this data through intensive research with his expert analysts, his answers are based on the findings which can also be found in his white paper, 2013 Retail Predictions.