From some travel and secondary research our team did last year...

1. 135 NW Park Avenue
Portland, OR 97209
Phone: 971.244.0970
Fax: 971.244.4124
02.2012
Supermarket Trends
Identifying Opportunity

2. On behalf of the Satori Engine team and all of IDL Worldwide,
thank you for the opportunity to present these findings.
Satori Engine is a retail strategy
firm that provides actionable
strategies and messaging
vehicles for brands and retailers.
A part of IDL Worldwide.
Peter Beck John Schreiber Scott Donnell
Led by John Schreiber, Peter Beck, and Scott Donnell, Satori Engine is a part of IDL Worldwide, Est 1943. IDL Worldwide continues
to provide creative design, engineering, fabrication, fulfillment and installation to brands, retailers and their customers.
www.idlww.com | www.satoriengine.com
2

3. “It’s Not The Customer’s Job
To Know What They Want.”
- Steve Jobs
“Nobody Pays For A Product.
What Is Paid For Is Satisfaction.”
- Peter Drucker
RETAIL TRENDS IDENTIFYING OPPORTUNITY FEBRUARY 2012 3

4. Consumer Trends at Retail
Health
An Aging Population Consciousness
Environmental
Consciousness Busy Consumers
Mobile & Near Field Growth of the One-
Communications Person Household
RETAIL TRENDS IDENTIFYING OPPORTUNITY FEBRUARY 2012 4

5. The Ageing Population
76 million ‘Boomers’ (65+) will control 52% of
Situation
the total $706 billion spent on groceries by 2015.
• Largest food influencers and purchasers
• Nostalgia plays a key role with this generation
• Increasingly shifting food procurement toward healthier choices
• Increased life expectancy, higher levels of expendable income
• Relaxation area
• Modified carts for limited mobility
• Easily accessible shelving and display cases
• Large type signs or magnifying glasses
Opportunities
• Target specific dietary needs [Low sodium, Low cholesterol, etc.]
• Nutrition tips or on-site nutritionist
• Smaller portions
• Pre-packaged kits for easy meal prep
RETAIL TRENDS IDENTIFYING OPPORTUNITY FEBRUARY 2012 5

6. Environmental Consciousness
“Green will not only become mainstream, but will
become the norm for most consumers.” (TWBA, 2008)
Situation • 54% of shoppers say they consider elements of sustainability as they select
products and stores (GMA/Deloitte Green Shopper Study, 2009)
• Perception of superior quality is cited by 45% of consumers as to reason they
purchase sustainable foods
• 80% of consumers are likely to switch brands, similar in price and quality,
to one that supports a cause
• Farm-to-Door promotions
• Green building & carbon footprint reduction
• Packaging and food waste reduction
Opportunities • Austin based in.gredients is first zero-
packaging grocery store
• UK Peoples Supermarket - 0% Food waste
• Newton, MA Star Market - 100%LED lighting,
90% off-grid energy consumption, and
GreenChill Platinum-Level certification
RETAIL TRENDS IDENTIFYING OPPORTUNITY FEBRUARY 2012 6

7. Mobile and Near Field Communications (NFC)
Shoppers are slightly more likely to use their
phones to compare prices in a store versus
Situation
before they go to the store.
• Visa & Vodaphone launching NFC-based mobile payment in Western Europe
• Isis mobile wallet: (JV with ATT, T-Mobile & Verizon) recently announced
partnerships with Chase, Capital One and Barclay bank
• Sprint aligned with Google Wallet
• Scanable barcode on each product with detailed product information,
Opportunities nutrition, loyalty program price, recipe ideas, price comparison
• Mobile based loyalty program (Ex: Tetherball360)
• Mobile payments (Isis, Google Wallet)
• Virtual shopping carts (Scan-it)
RETAIL TRENDS IDENTIFYING OPPORTUNITY FEBRUARY 2012 7

8. Health Consciousness
76.2% respondents agree or somewhat agree
they are looking for healthier food options when
Situation
they shop. (Deloitte, 2011)
• More than 1.5 Billion overweight people globally
• Spending on Weight Loss Products to Reach More Than $134 Billion in 2014
• Nutritional Transparency
• Single serve portions sizes or tips
• Sections for dietary needs
Opportunities • On-site nutritionist
• Pre-packed meals or menus
• Diabetic, Gluten Free, Low Sodium,
Low Carb, Cleanse, etc.
RETAIL TRENDS IDENTIFYING OPPORTUNITY FEBRUARY 2012 8

9. Busy Consumers
Time-starved consumers need more help in
Situation making the right choices.
• Audiences are embracing anything that helps them discover what they want
• “Half of US consumers now say that a lack of time is a bigger problem than a
lack of money.” (TBWA)
• More fresh “convenience” meals with higher quality ingredients
• Grab and Go bags packed for a week of meals and menu items. Could have
Opportunities options for dietary needs
• Online ordering & drive-thru pick-up (Piloted at Kaiser in Germany)
• Digital grocery shopping and delivery in densely populated cities (Piloted by
Tesco in Korea)
• Distill the choice, tell the consumer what they need
RETAIL TRENDS IDENTIFYING OPPORTUNITY FEBRUARY 2012 9

10. Rise of the One-Person Household
US single person households has doubled in the
past 50 years. (US Census Data)
Situation • 28% of households consisting of one person
• Majority of single households consist of women
• Especially true for singles over 55
• Married couples represent less than 1/2 of American households for the first time
• The number of single households has almost doubled in the Czech Republic
• 1 in 5 householders in Korea is single
• More fresh “convenience” meals with higher quality ingredients
• In Korea, E-Mart is selling single portions of carrots, onions and
Opportunities fish instead of the family-sized packs. “About 30 percent of
all food and beverage have been reduced in size to meet solo
dwellers’ needs”, an E-mart source said.
• Single serve menu plans or grab-n-go bags
RETAIL TRENDS IDENTIFYING OPPORTUNITY FEBRUARY 2012 10

11. Other Opportunities
The Millenials Are Coming
• The Millennial Generation now number 79 million. That’s one million more than
the Baby Boomers
Situation • Millenials don’t care to shop alone, preferring to be with other while shopping
• More need-based and experimental than other generations
• Want a “wide variety of deli foods,” (nearly 60% rate it as a key criteria)
• Looking for exotic foods, child-friendly stores, samples of new foods to try,
creative menu ideas and online ordering systems
• Love loyalty and rewards programs
Price Consciousness
Situation
• Expect shoppers to use their mobile devices to calculate a price per portion
cost rather than the unit price of individual products listed on the shelves
• Nearly 40% of respondents were interested in viewing chef demonstrations
for better meal preps (MS survey)
Miscellenous • HEB (Texas_ piloted a Mens Care section and doubled sales of mens grooming
products almost instantly
• What are the Top 10 Forgotten Items? Should they be located near checkout?
RETAIL TRENDS IDENTIFYING OPPORTUNITY FEBRUARY 2012 11

12. Deka Markt,
Netherlands
Promoting ‘Fresh Convenience’
12

13. Chedraui,
Guadalajara City
“Less is More” Philosphy
13

14. The Peoples
Supermarket, London
Customer Owned, Zero Food Waste
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15. Retail Visits
As much of the industry is still stuck in its orthodoxies,
some supermarkets are making the experience of grocery
shopping painless, or even enjoyable.
Here are some of those inspirational stores we visited.
Germany New York
Please contact John Schreiber with your requests about these visits! Kaiser’s Eataly
From magnifying glasses to read prices Part deli, part experience, part restaurant
jschreiber@satoriengine.com
to modified trolleys, every aspect of and with a massive beer garden on the
Kaiser’s in Berlin has been adapted roof, Eataly is somewhat hard to define.
to the needs of those who aren’t as But what is pretty clear is that this high
young as the product managers that end Italian megastore is pretty on the
typically market to them. As the world’s ball when it comes to creating a food
population keeps aging, this is one shopping experience to remember.
retailer everyone needs to watch.
France Texas United Kingdom
Chronodrive/ H-E-B The People’s Supermarket
Chronovillage In early 2010, this Texas supermarket This supermarket doesn’t use special
France’s Auchan has taken the common decided to group all male skincare in furniture, architecture or technology to
“shop online and pick up in store” a Men’s Zone. This was driven by the create a unique experience, but manages
program a step further by designing a insight that most guys, especially in to do so nonetheless. Owned by it’s
Chronodrive service station where you Texas, don’t really feel at ease looking for customers, who are also regularly asked
can collect your groceries in 5 minutes their products alongside female hygiene to lend a hand in the restocking the aisles
or less. The current format upgrade, and hair removal products. The results or servicing customers, The People’s
Chronovillage even helps you secure a were phenomenal with a year-on-year Supermarket focuses on local, authentic
freshly baked baguette or a good bottle sales increase of 11% on a range of 534 products at fair prices..
of wine. Apparently the format is hitting personal care items.
it off, as Auchan has announced a quite
aggressive roll-out plan.
RETAIL TRENDS IDENTIFYING OPPORTUNITY FEBRUARY 2012 15

16. 135 NW Park Avenue
Portland, OR 97209
Phone: 971.244.0970
Fax: 971.244.4124
PETER BECK
Executive Vice President Client Services | pbeck@idlww.com
BRYAN LAING
Director of Client Services | blaing@idlww.com
JOHN SCHREIBER
Vice President Creative Services | jschreiber@satoriengine.com
SCOTT DONNELL
Creative Lead | sdonnell@satoriengine.com
724.431.4700
Thank you