International Retail Trends Ccgd West 2010

5
big international retail trends
and how Canadian retailers and suppliers
can get on the winning edge.
presented by

About SINS

Helping our clients sell more - more proﬁtably

Training & Development:
Account Management, Trade Marketing, Retail Marketing
Sales Leadership

Strategy Consulting:
Go-To Market Strategy
Structure and Development

Industry Knowledge & Expertise:
Canadian CPG Industry
International Retail

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today’s game plan
the 5 big international trends
what you can do to leverage them?
- retailer and supplier perspectives

Q&A / Discussion


5 big international retail trends.


#1 getting bigger + going global


the world’s ten biggest retailers...

1 6

2 7

3 8

4 9

5 10
Source: 2010 Global Powers of Retailing - Deloitte


just how big the biggest are...

Retail Sales Retail Sales
Company Country # of Countries
Rank 2008 (Millions $USD)
1 Wal-Mart Stores Inc. US 401,244 15
2 Carrefour SA France 127,958 36
3 Metro AG Germany 99,004 32
4 Tesco PLC UK 96,210 13
5 Schwarz Group (Lidl) Germany 79,924 24
6 The Kroger Co. US 76,000 1
7 The Home Depot US 71,288 7
8 Costco Wholesale US 70,977 8
9 Aldi GmbH Germany 66,063 18
10 Target Corp. US 62,884 1


Total Turnover (billions) of Top Ten Retailers Number of Countries
155
1,152

96

576
+100% +62%

2000 2008 2000 2008

The Biggest Retailers are Getting Bigger Through Globalization & Consolidation

Sources: 2002 Global Powers of Retailing - Deloitte
2010 Global Powers of Retailing - Deloitte


Canada’s ten biggest retailers...

1 6

2 7

3 8

4 9

5 10


just how big the big canadian retailers are...
Retail Sales
Company Retail Sales (Millions $USD) Global Rank
Rank 2008
1 Loblaw Companies 22,208 37
2 Alimentation Couche Tard 15,781 50
3 Empire Company Ltd. 13,305 67
4 Metro Inc. 10,644 81
5 Shoppers Drug Mart 8,896 102
6 Canadian Tire Corp. 7,837 112
7 Hudson's Bay Trading Co.** 7,591 118
8 Katz Group Inc. 6,278 137
9 Jim Pattison Group 3,720 207
10 RONA Inc. 3,533 230
** American owned Source: 2010 Global Powers of Retailing - Deloitte


just how big the big canadian retailers are...
Retail Sales Company Retail Sales (Millions $USD) Global Rank
Rank 2008
1 Loblaw Companies 22,208 37
2 Alimentation Couche Tard 15,781 50
3 Empire Company Ltd. 13,305 67
4 Metro Inc. 10,644 81
5 Shoppers Drug Mart 8,896 102
6 Canadian Tire Corp. 7,837 112
7 Hudson's Bay Trading Co.** 7,591 118
8 Canada Safeway 6,400
9 Katz Group Inc. 6,278 137
10 Jim Pattison Group 3,720 207
11 RONA Inc. 3,533 230
** American owned Source: 2010 Global Powers of Retailing - Deloitte


500000

375000

250000

125000

0
Wal-Mart Carrefour Canada Top 10 Metro Tesco Lidl

Sources: 2010 Global Powers of Retailing - Deloitte


GDP 2008
Rank Country Top 10 Retailers
Millions USD

1 United States 14,441,425 7
2 Japan 4,910,692 5
3 China 4,327,448 5
4 Germany 3,673,105 3
5 France 2,866,951 4
6 United Kingdom 2,680,000 6
7 Italy 2,313,893 3
8 Russia 1,676,586 2
9 Spain 1,601,964 4
10 Brazil 1,572,839 2
11 Canada 1,499,551 3
Sources: International Monetary Fund


GDP 2008
Rank Country Top 10 Retailers
Millions USD

11 Canada 1,499,551 3
12 India 1,206,684 2
13 Mexico 1,088,128 3
14 Australia 1,013,461 2
15 South Korea 929,124 2
16 Netherlands 876,970 3
17 Turkey 729,983 3
18 Poland 527,866 4
19 Indonesia 511,765 1
20 Belgium 506,183 4
Sources: International Monetary Fund


how to get on the winning-edge...

Retailers:
✓benchmark yourselves against winning international formats.
✓attend more international conferences to expand your horizon.

Suppliers:
✓develop contacts with your colleagues around the world to
bring international best practices to your customer locally.

Together:
✓subscribe to several on-line news services to stay in touch with global
developments in retailing.


#2 building great brands



when it comes to brands, retailers are shifting
from the “distributor” to the “builder”.

pillars of great retail brand-building

1 value-added private labels
2 extension of brands in related services
3 variety of store formats strong retail brands
are the passport to
4 corporate citizenship global growth



examples of value-added private label brands at tesco



extending the brand into retail services at tesco



offering a variety of store formats at tesco



a new british (branded) invasion at fresh & easy



corporate citizenship as a branding vehicle at tesco




Retailers:
✓ evaluate the consistency of your brand image to the individual shopper.
✓ increase efforts to take your brand “beyond the store”.

Suppliers:
✓ focus on true innovation to drive growth while avoiding SKU sprawl.
✓ connect your marketing teams with those inside the retailer.

Together:
✓ identify category or cross-category opportunities that are able to build
equity for both the retailer and supplier brands.


#3 understanding the individual shopper



retailers are gearing up for customer relationship management 2.0
in a push to understand shopper behavior



average customers don’t exist.
success lies in knowing individuals.
- Dunnhumby

tesco club card:
launched in 1995

quick facts:
10+ million active households in the UK.

segments consumers on behaviour + value
multidimensional segmentation
each individual shopper

products assigned scores and
attractiveness ratings for each shopper
segment.

shopper-proﬁle-tailored communication and
promotions

coupon redemption rates of 20-40%.



tesco shopper segmentation
Lifestage Proﬁtability Store Format

Promotional Promiscuity
Shopping
Lifestyle
Habits
Brand Advocacy



the receipt:
merely data
April 12, 2008 at 21h30

Customer 664433 purchased in store 115
(Express)

1 item 102387 - microwave ready meal,
Spicy Mexican ﬂavour, Priced at £2.99

1 item 114576 - White Wine, Chablis,
priced at £5.99

2 x item 329800 - prepacked salad, priced
at £0.99 (promotion)



the card (model) reveals:
true insight

Mrs Smith is a young adult and one of our Premium shoppers.
She uses Watford Hypermarket for major monthly shops.
She uses Covent Garden Metro for daily requirements.
She often shops late in the evening and buys upmarket products.
She is particularly loyal to her cat food brand and ﬁne fabric
washing powder.
She buys Hello magazine and sometimes Country Life.
She is happy to be contacted for research.
Promotions are important to her, but not Value lines.



#664433



tailored promotion
based on life-stage



Dunnhumby &
Metro partnership

Source: Globe and Mail - Nov 19, 2009




Retailers:
✓ think beyond points and discounts.
✓ use your CRM tool as a basket builder instead of a trade fund generator.

Suppliers:
✓ bring consumer insights to the table that builds on shopper understanding.
✓ develop “shopper marketing” capabilities within the organization.

Together:
✓ identify the overlaps between the key shopper segments in the store and
the target consumer of the brand and intensify shopper marketing efforts.


#4 being conscious of their footprint



going “green” has not gone away because we are
dealing with the downturn

Consumer Goods Forum
“top of mind” survey 2009

Source: Consumer Good Forum Press Release: Feb 2, 2009


examples of green prioritization at tesco


examples of green prioritization at walmart

concentrated laundry detergent
mandated move to concentrated formulas
savings:
100 million gallons of water
95 million pounds of plastic resin
125 million pounds of cardboard.

extended paper roll life
co-development (P&G) of toilet paper and paper
towel products with more sheets per roll.
savings:
89.5 million cardboard cores
360,000 pounds of plastic
54,000 gallons of diesel.



everyone’s keeping an eye on walmart...

Source: Wall Street Journal - Jan. 18, 2010



two great Canadian examples...




Retailers:
✓ engage shoppers beyond reusable shopping bags
✓ showcase your efforts and successes in an easily accessible way

Suppliers:
✓ read your organization’s “CSR” report and understand it’s impact locally.
✓ ﬁnd areas of common interest between your company and your customer.

Together:
✓ develop common CSR goals as part of the business planning process
and scorecard your results with the various stakeholders.


#5 efﬁciency spawns a new format



Total Turnover of Aldi / Lidl
the “hard discount” format has
already taken Europe by storm. 102,522

major players:
founded: germany 1940’s
8,200 stores
50,100 52,422

29,082

17,782
11,300
founded: germany 1930’s
7,000 european stores

2000 2008

Aldi Lidl Total




hard discount stores examination

success factors for hard discount
1 limited assortment (approx. 1500 SKUs)
2 high penetration of private label
3 small, consistent store format (approx. 15,000 sq. ft.)
4 shelf-ready packaging
5 display-ready pallets
6 store-warehouse clustering
7 no in-store deli or bakery



hard discount stores LIDL



hard discount stores ALDI



ALDI is already at our border...

USA
Aldi Sud launched in the US in 1976.
Over 1000 stores in 30 states.
expanded store count during economic downturn
Also owns “Trader Joes” with over 300 stores



Retailers:
✓ have a contingency plan in place to deal with a rapid Hard Discount launch.
✓ focus on brands and value added promotions.

Suppliers:
✓ consider developing an unique product offer for Hard Discount.
✓ link with your international colleagues to learn from their experience.

Together:
✓continue to push inefﬁciencies out of the supply chain in order to make the
Canadian industry less attractive to potential competitors.


Q: what were all those trends again...?

A: the 5 big international trends are...

#1 getting bigger + going global


hot
some reading recommendations from sins


thank you!


questions?


4804 16 Street SW


International Retail Trends Ccgd West 2010

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