Retailing in the Week Ahead, Week 37
Make no mistake: COVID is forcing the final hold-outs among grocery and independent retailers to get very good with software and algorithms. This is long overdue. In recent years, we have seen numerous big chains in fashion, electronics, hobbies & games, books, videos, and furniture have succumbed to their digital-first rivals.
However, supermarkets have, up until now, adopted a laissez-faire “it’ll never happen to us” approach to the subject. Worse still, the world’s biggest CPG A-brands have taken an even more relaxed attitude.
COVID-19 changed that. Boy, did it change that. Convenience stores tied to real-time data are growing sales by 120% year-on-year. Ecommerce operators that use algorithms to predict and humans to pick are growing 60%+. Meanwhile, supermarkets are celebrating 8% comp store/like-for-like store sales and quietly reassuring their investors that the hundreds of millions in operating losses can be recovered next year.
Understanding what this means for brands will require understanding the Gemini Effect that digital retailing has on relationships between retailers and others. Are you ready to be a Gemini?
The Gemini Effect
Retailers have always required two personalities to drive success – a salesperson’s personality that shouts, “Look at this, try that, don’t just buy one, buy two!” and a subdued but firm buyer’s personality that says, “I need you to ship me more of that item. You need to drop your prices, or I’ll switch to another supplier, and the quality of that item is just not up to the right standards!”
Both personalities are undergoing a series of radical transformations that will require retailers to reinvent themselves. The pace of reinvention is dramatic and supercharged.
In astrology, Gemini or Mithuna, represents the presence of two distinct personalities within an individual. In popular culture this can sometimes be misrepresented, such as in Will Smith’s film, Gemini Man, where the second personality is actually a cloned, but younger, version of himself. This is not the Gemini effect. The Gemini effect is when the mirror personality exists within the same person.
So how is this manifesting itself in a COVID-19 environment where digital is no longer nice to have, it’s essential?
The easiest way to see this is by looking at a two-by-two matrix:
Implications for the 2021/2022 Planning Period
Most CPG brands are building “annual” plans for the upcoming cycle of planning at this moment. It is not too late to go Gemini in your planning.
A Gemini plan acknowledges three things:
- Promotions are no longer mass market, they are niche – inject your plan with the ‘New Retail Calendar’ if you haven’t already
- Buyers don’t work annually; they work monthly or even more frequently – spend time analyzing history to see how your buyers change across a 12-month cycle
- An annual plan will get ripped to pieces in the first three months of trading – why not go to agile planning?
This piece is a synopsis of a presentation I delivered on 3 September 2020 at ZEE Melt 2020. I have been told that you can access a video of this presentation from the Zee Melt organizers up until 27 September 2020. I can’t promise this, but if you’re interested please reach out to the Zee Melt team to gain access.
I wish you success, as ever, in a Gemini-dominant world. If you would like to learn more about how to be more Gemini, I would love to hear from you. Reach out to me via email, or on LinkedIn or Twitter (@raygaul).
Retail IQ Publications from Week 36:
The Retail Reveal: Frequency drivers in value retail
Three CEOs in three years: where next for Lidl?
Auchan continues to count every penny
China Digital Monthly Newsletter: August 2020
Russian Retail Monthly Digest: August 2020