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Winning the Battle

BY CSA STAFF

By Chris Donnelly, managing director, Accenture Retail

Ahead of the holidays, 56% of U.S. consumers told us that they expected to ‘showroom’ as they bought gifts this year — underlining the threat of online pure play retailers to the success, and even existence, of traditional retailers. However, traditional retailers can compete and even win this battle.

Customers don’t just want to shop online but in-store, with mobile devices or through call centers — whichever route offers them the convenience of access and value that they are seeking. Their key demand is for the experience to be seamless across channels. To succeed, traditional retailers must deepen and sustain their innate strengths, and learn to match the online pure plays for innovation, technology and execution.

In developing a roadmap to help traditional retailers achieve this goal, Accenture has reflected on the principles of Sun Tzu, a Chinese military strategist from the 6th century B.C. For Sun Tzu, “The Art of War” was summed up by five core concepts; agility, preparation, understanding your strengths and weaknesses, disciplined organization, and first in the field having an advantage.

Agility: The online pure plays don’t just innovate — they do so at speed. In the current retail environment of rapid technological and cultural change, retailers that thrive will be those that are able to experiment their way to success — innovating, testing, discarding the failures, building on the successes, and implementing them at speed and scale.

Preparation: In contrast to the fit-for-purpose, single-channel technology environments enjoyed by the online pure plays, many traditional retailers are stuck with legacy systems and must consider both the store and online channels whenever they contemplate change. They need to start embracing their inner geek. Placing at the core of their operations are digital natives who are able to keep pace with the latest offerings, spot emerging trends and have the confidence to exploit them.

Understanding your strengths and weaknesses: Competition on both product range and price is possible. One route is private-label goods that are either as good as the leading brand, yet priced lower, or offer better quality or design and are priced higher. The creation of bundled products or bundled product and services packages that offer a better deal, beyond that offered by the online retailers’ range, should also be considered.

Disciplined organization: If integrated with other channels, stores can become key components of a traditional retailer’s strategy to compete with online retailers, and play an important role in the multichannel experience. They can provide consumers with more convenient options than long waits at sorting centers or for deliveries to arrive, such as Click and Collect, or the “drive-through” option offered by French hypermarkets. Store staff can help ensure that customers are comparing like with like in terms of the product and the delivery cost.

Customer service will be a critical weapon. The social interplay that shoppers can enjoy via sales associates can be a key differentiator, if traditional retailers can apply the personal touch at every stage of the purchase journey. Stores need sales associates who can help customers pick just the right product for their needs and help them remember their store visit as an enjoyable and fulfilling experience.

First in the field has an advantage: Trying to be another Amazon is not advisable, and traditional retailers have strengths of their own. Brand is a key driver of customer loyalty, and even online shoppers will choose to buy from a familiar and trusted name. If traditional retailers can build faster, cheaper fulfilment capabilities, and couple them with outstanding service, they will be able to press home their brand advantage.

Traditional retailers can beat the online rivals with seamless, personalized, multichannel offerings. Through faster innovation, technologically savvy staff, embracing social media, exceptional in-store service and making every store count, they can boost the power of their brand to drive customer loyalty and profitable growth.

Chris Donnelly is the global managing director of Accenture’s Retail practice. Donnelly has more than 21 years of retail experience and works with many of the leading global retailers on the critical issues facing their business. He can be reached at christopher.donnelly@accenture.com.

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Counting Down the Trends

BY Marianne Wilson

Generally speaking, I’m not big on trend forecasts. Maybe it’s because there are so many of them, particularly at this time of the year. They all seem to blend together into a mass of predictions and statistics.

Despite my reservations, there are always a few that stand out. But the one that really seems to grab my attention is from marketing communications giant JWT, New York. For the past eight years now, the firm has released an annual year-end forecast of trends that will drive or significantly impact consumer mind-set and behavior in the year. It’s always a good read, and this year is no exception.

“In our forecast of trends for the near future, new technology continues to take center stage, as we see major shifts tied to warp-speed developments in mobile, social and data technologies,” said Ann Mack, director of trendspotting for JWT. “Many of our trends reflect how businesses are driving, leveraging or counteracting technology’s omnipresence in our lives, and how consumers are responding to its pull.”

Interestingly, JWT does not think its trends are overnight sensations. Here is JWT’s “10 Trends for 2013” report:

1. Play as a competitive advantage: Adults will increasingly come to feel that kids should have plenty of unstructured play to balance out the plethora of tech-based and organized activities.

2. The super stress area: Get ready — We’re entering the era of super stress. And as stress gets more widely recognized as both a serious medical concern and a rising cost issue, governments, employers and brands alike will need to revamp efforts to help prevent and reduce it.

3. Intelligent objects: Everyday objects are evolving into tech-infused smart devices with augmented functionality. (Oakley’s new Airwave goggles for skiers and snowboarders feature GPS sensors, Bluetooth and a screen display.)

4. Predictive personalization: As data analysis becomes more cost-efficient, the science gets more sophisticated. Brands will increasingly be able to predict customer behavior, needs or wants — and tailor offers very precisely.

5. The mobile fingerprint: Smartphones are evolving to become wallets, keys, health consultants and more. Soon, they’ll become de-facto fingerprints, with our identity all in one place.

6. Sensory explosion: In a digital world, a premium will be placed on sensory simulation. Marketers will look for more ways to engage the senses as consumers expect ever more potent products and experiences.

7. Everything is retail: Since almost everything can be a retail channel, brands must get increasingly creative in where and how they sell their goods.

8. Peer power: As the peer-to-peer marketplace expands in size and scope and moves beyond goods to a wide range of services, it will increasingly upend major industries.

9. Going private in public: In an era when living publicly is becoming the default, people are coming up with creative ways to carve out private spaces in their lives.

10. Health and happiness hand in hand: Happiness is being seen as a core component of health and wellness.

Go to www.jwtintelligence.com for additional details.

mwilson@chainstoreage.com

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Kraft’s fresh take on the New Year

BY CSA STAFF

NORTHFIELD, Ill. — Kraft is gearing up for the New Year with more than 40 new food and beverage choices for consumers.

"Bland and boring do not cut it anymore," said Barry Calpino, VP, breakthrough innovation, Kraft. "We’re seeing an all-out quest for fun, passion and adventure in food and beverages as people embrace a multitude of global and regional flavors. Culinary experimentation is ‘in,’ so everyone wants the flexibility to customize their food. Our latest innovations are fun, great-tasting products that meet those needs and are in sync with today’s lifestyles."

Kraft’s new line of products is inspired by global cuisine, local street foods, farmers markets and restaurant trends. Some new products are hitting store shelves now, with the remainder set to debut in early 2013.

"As culinary trends continue to evolve, one constant is a desire for even more choices," said Robin Ross, associate director of culinary, Kraft. "Consumers have varying and multiple needs for their food and beverage choices. Some consumers find a healthy balance with less complex ingredient lines is important, while others want bold or ethnically-inspired taste experiences. Young people are especially adventurous and food savvy. They don’t want to miss the latest food news, whether it’s trendy flavors, pop-up restaurants or the newest food truck in town."

The new products include New Miracle Whip Dipping Sauces, such as Smokin’ Bacon Ranch, Kickin’ Onion Blossom and Sassy Sweet Tomato; Philadelphia Spicy Jalapeno Cream Cheese; Philadelphia Indulgence Spread line featuring Cinnamon and Dulce de Leche Caramel; and Cracked Black Pepper, Italian Style Pizzeria and Sweet BBQ varieties for both the Kraft and Polly-O String Cheese brands.

Other snacks and food items will include Planters NUT-rition Peanut Butter Cherry Chocolate flavor; Chipotle BBQ, Tomato & Chili Pepper and Cracked Peppercorn A.1. Dry Rubs and A.1. Marinade Mixes; Kraft Anything Dressings Zesty Lime Vinaigrette; Oscar Mayer Bologna Jalapeno and Bacon options; Oscar Mayer Carving Board Pulled Meats; Velveeta-brand Cheesy Casseroles in Chili Cornbread, Chicken Pot Pie and Shepherd’s Pie varieties; Velveeta Cheesy Skillets Dinner Kits featuring Jambalaya, Chicken Parmesan and Ultimate Cheeseburger Mac with 2% Milk Cheese; Kraft Fresh Take cheese and breadcrumb mix featuring Smokey Mesquite BBQ, Spicy Chipotle Cheddar and Classic Four Cheese; and Oscar Mayer Selects Chicken Breast Franks.

New beverage options will include Cherry Blackberry MiO; Crystal Light Liquid featuring Mango Passionfruit, Strawberry Lemonade, Blueberry Raspberry, Iced Tea, Peach Bellini and Pomtini; Tim Hortons coffee, including decaf and latte, available in T Discs.

And bakers will have new Kraft items to choose from as well, including Cool Whip Frosting, Jet-Puffed Mallow Bites marshmallows line featuring fruit-flavored, ice cream cone shaped and brownie bite mini-marshmallows; and Planters NUT-rition Sustaining Energy Mix featuring honey roasted peanuts, crunchy honey soy clusters with soy protein and roasted almonds.

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