It is estimated that the eCommerce food and consumables sales will continue to grow at a steady growth of 23.1% a year.
In the last couple of years, the global food retail industry is witnessing a steady growth marked by the presence of a change in customer preference, a radical shift toward online shopping, and the rise in the global population. The food retail sector comprises of specialty stores that offer a distinguished set of products and services to the customers. It can be considered as a dynamic industry that contributes greatly to the development of several industries including the food packaging industry. Also, with the recent shift toward e-retailing platforms, the food retail industry is expected to witness considerable growth as the retail formats such as in-store pickup, and online groceries are in demand. A leading research firm estimates that the growth of households is expected to reach to 1.5 billion from the margin of 1.2 billion in 2012. Although the industry is expected to showcase promising growth, the industry will witness drawbacks due to factors including:
- Increasing labor costs: With a considerable number of competitors in the food retail space, organizations are under pressures to control the operational costs, as the retail space run completely on low-profit margins. For a lean and efficient operation to be in place, prominent organizations should ensure the labor costs are curtailed to the minimum.
- Managing cash flows: In this competition-driven environment, food retailers should effectively manage the cash flows to improve their store’s profitability and gain better returns on their investment. Organizations need to expand their capacity while adequately maintaining their inventory levels. With the increasing threat from new entrants, organizations are in need for immediate measures to improve their product lines and penetrate across new market segments.
To address the aforementioned challenges and relatively enhance their business offerings, organizations are in need of market intelligence solutions.
The Business Challenge
- The Client: A leading food retail client
- Area of Engagement: Market intelligence
A prominent client in the food retail space with a considerable number of stores spread globally wanted to identify the potential bottlenecks for new market entry and assess the competitors to stay abreast of the competition. The client wanted to ascertain the demand for the products offered and find suitable ways to get the products and services to the market. They also wanted to seek ways to increase their revenue, profit margins, and the market share and adequately allocate the resources to meet the business requirements. The primary objective of the market intelligence study was to tailor the products and marketing efforts around customer needs efficiently.
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The Journey
To minimize the risk of an investment, the market intelligence experts at Infiniti carried out extensive interviews and discussions with prominent stakeholders in the food retail space. To create a need assessment study based on the customer preferences, the experts at Infiniti also compiled information across a wide array of secondary sources such as trade shows, paid industry databases, news forums, and company presentations in the retail industry.
The Solution Benefit and the Business Impact
The market intelligence solution offered by Infiniti helped the client obtain real-time information relevant to the business’ niche and make progressive business decisions based on relevant market opportunities. The engagement further addressed the potential bottlenecks in the food retail space and helped the client maintain a distinctive corporate identity. Moreover, the market intelligence engagement also helped the client create a robust brand strategy to identify their capabilities, liabilities, and long-term intentions. The client was also able to make progressive business decisions relevant to specific market opportunity.
The Future
The future of food retail space will be largely marked by the presence of numerous mergers and acquisitions, and various e-retailing players will offer food and consumables at reasonable prices to provide a quick and easy shopping experience. Moreover, with the latest innovations taking place, food retailers will be able to offer products more seamlessly.
A must-read case study for strategy specialists and decision makers looking to develop an understanding of the retail industry
