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When it comes to defining and breaking the supermarket industry down into its main areas of focus, the one overriding trend which sits atop everything else related to the industry is experience. The customer experience both online and in store; the way that supermarkets elevate their various touchpoints and experiences with vouchers, deals and exclusive product launches; the way in which supermarkets expand their offering in line with local demand and complimentary partnerships; even the way in which supermarkets are laid out to provide the most seamless and streamlined experience.
Over the past couple of decades, and the last ten years in particular, the supermarket experience has changed exponentially. No longer is the weekly food shop a chore which is undertaken armed with a list of required items and a very basic selection of products to choose from. Now, the choice available across supermarkets is expansive, all-encompassing, and tailored to attract target consumers across every sector and every walk of life – offering luxury items alongside multi-buy deals, international products atop local favourites, and of course fashion and technology purchases in amongst the food and drink items that supermarkets are famed for providing.
With a number of big players in the supermarket industry, ranging from local convenience stores to supermarket giant stores, it seems as though the growth and success of various supermarket names has stemmed from a selection of different things: namely the ways in which they offer customer experience, the tools and incentives they use to keep customers coming back, and the ways in which they expand their offering encompass different retail sector and product lines.
One great example of this in action is the rise in smaller high street and local supermarket stores, operating under the big retail names but in a much smaller capacity – essentially allowing the supermarket to enjoy a wide ranging footprint in a variety of different locations. This not only includes smaller high street supermarket stores, but also fuel station garages and pumps – with supermarket fuel stations now accounting for almost half of the total fuel consumption across the UK. While this may be a case of ease, it is just as likely to do with the loyalty rewards offered to shoppers who purchase fuel through their local supermarket.
And the cross-selling of industries and retail sectors alongside supermarket chains doesn’t stop at fuel. Many of the leading supermarkets in the global marketplace now stock not only the expected food and drink but also play host to fashion collections and ranges, technology products, on-site cafes and eateries (both own brand options and external third party supplier options like Costa Coffee), and homeware products and collections. All of these extras are responsible for increasing the reliance of consumers on the supermarket industry and provides supermarkets with the opportunity to upsell various products through the way in which they lay out the store. An example of this in action is the way that the biggest retailers in the supermarket industry all now operate their own brand of clothing – in Tesco this is called ‘F&F’; in Asda it is ‘George’, and in Sainsbury’s it is ‘TU’. This expansion into other areas of the retail industry serve to make supermarkets more of an all-round shopping experience rather than a mere chore, using additional retail sectors to make the overall concept of their store more appealing to the end customer – and in order to simply encourage them to spend more money.
The other area of the supermarket industry which is largely responsible for its growth, is the increased understanding around consumer psychology and the ways in which supermarkets tap into our most basic instincts in order to drive sales and retain customer loyalty. This all starts with product placement and layout, and can be as surface level or as deep diving as you want it to be – encompassing everything from the location of a particular product type in the store, to the height of the shelves, the shelf onto which each brand is placed according to its price and target market, the location of discounted items and multi buy deals, and the way that scent and taste is used across the store to drive sales of particular products. All of these elements seek to encourage the consumer to buy specific products and to return to the store on future occasions – driven home by the presentation of a voucher for the ‘next purchase’ at the checkout before the consumer leaves the store.
Have you ever noticed how these types of vouchers have expiry dates, often giving you with a week – or at most a month – to use them before they expire? Creating a sense of urgency is simply another tool used by the supermarket industry in order to encourage consumers to return to their store quickly, highlighting how vouchers can be great but can also be engineered cleverly in order to drive and increase your spending depending on the industry and sector.
The likelihood is that every town and city will have its own big player supermarkets, though may have at least one from what is commonly known as the “big four” in the UK. Meanwhile, the USA plays host to its own supermarket giants, and other countries across the world each tap into their own local cultures and trends to elevate their own supermarket giants to nationwide status.
In the UK, the big names in the supermarket industry are:
While these are typically regarded as the four biggest supermarkets and have been for decades, the rise in competitors is such that these supermarkets are constantly losing customers to newer names on the market, including:
These three serve very specific markets, all offering the same variety of produce but often with a more specific target demographic in mind: in the case of Waitrose, these are high earners with more disposable income and a tendency to prefer high end food products and wider selections of luxury goods. Lidl and Aldi meanwhile operate across the same demographic, providing consumers with primarily European food choices and brands which are renowned for being more affordable, more exotic and often more interesting – also providing their customers with the added experience of being able to shop across their in store lifestyle accessories and homeware items. In short, while the big four cover every customer demographic through the sheer range of brands and price points that they stock across every product line, other supermarkets in the sector see most of their success coming from specific demographics and buyers who are interested in their unique offerings and more targeted ranges.
In the USA, the largest supermarket names in the industry include:
Across the rest of the world, some of the other big names and retailers in the supermarket sector include:
A fun fact for you: did you know that most “baby carrots” are cut-down carrots that would otherwise be rejected from supermarkets for being too ugly?
This fact is not only designed to make us laugh, but also delivers a valuable insight into the aesthetic importance of the supermarket industry and the fact that consumers purchase as much with their senses as they do with their shopping lists and budgets. The fact is, if something looks suspect or unappetising, it will not sell – especially in large industry providers where every singe product type comes complete with at least five or six different brand choices and variations.
One of the growing trends across supermarkets ties the concept of targeted advertising in with product placement and design. It is no secret that social media advertising and marketing relies on visuals as much as content and information – and this as a trend is slowly making its way across to, and infiltrating, the supermarket and food and drink industry, not only in the way that products are photographed and marketed by their parent brands and by the supermarket themselves, but also in the way that they are packaged and placed on shelves. As a consumer you may not realise it, but every step of the supermarket journey is carefully mapped out to elevate and provide the ideal customer experience.
Have you ever stepped into a supermarket on holiday or in a foreign country and found yourself drawn in by the selection of local produce alongside the global brands and items which line the shelves of most large supermarkets around the world? The combination of local produce alongside global wares is what gives supermarkets their own unique place in the market. What is particularly interesting is the way that these same supermarkets treat and market distinctly international and foreign products – with many operating and stocking an international section of their stores in order to give consumers the transparency they demand and to give each product line its own place in the store. A good example of this is a distinctly British product – Marmite – something has made waves across the global marketplace and is commonly regarded as one of the most British products available. Marmite joins the likes of British biscuit lines, Cadbury’s chocolate and British tea brands on the international shelves of stores and supermarkets around the world – often with a huge hike in price owing to the international status of the product.
Another trend which is of great prominence in the supermarket industry is the relationship between branded products and supermarket brand items – with the majority of difference coming from price rather than taste. The fact is consumers are often very particular about the brands that they like – sometimes without even realising it. And while there are products which we wouldn’t think twice about purchasing under the supermarket’s own named brand, there are others which we largely ignore in favour of the brand names we know, recognise and trust – for example Coca Cola, Heinz Baked Beans and Ketchup, and Ben & Jerry’s ice cream. But why is it that branded and supermarket branded products sit so far apart on the consumer spectrum? There are a great many myths floating around the industry which influence our view of different products – for example the belief that own brand products are less nutritious than the famed and recognisable brands, or that branded products simply taste nicer than supermarket items. The truth, however, is that not only do they often taste virtually exactly the same, but supermarket branded items are often known to have less saturated fats and sugars, with more basic ingredient lists than their branded counterparts. Where does the extra price come from? Advertising, marketing, and the simple idea that all the marketing these large branded companies invest in much be paid off somehow – and the easiest way to do that is by hiking the product price.
And then we have the inevitable rise in ecommerce and the way that technology and the internet has impacted the supermarket industry and forced all of these large retail names to invest in their online presence. While most of the big retail names operate some form of online store, whether it offers customers a chance to order deliveries or click & collect food shops, or simply a chance to browse popular product lines and explore different deals, the rise in online is changing the way that consumers shop – and is pushing them more towards those retailers who offer a complete service and seamless experience across the in store and online touchpoint. A good example of this is Tesco, which operates 6,784 outlets across the world and also hosts its own ecommerce store, detailing all the deals and discounts available, giving customers a choice of thousands of different branded and Tesco-own products, providing inspirational recipe ideas and shopping list favourites, and even creating a link between the two shopping styles so that customers with a loyalty Clubcard don’t miss out – no matter where or how they do their shopping.
In short, the supermarket industry is one driven by experience – with the most successful retailers in the sector giving consumers a choice of how they like to shop, when they like to shop, and which deals and discounts they would like to buy into.
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