Mid-January of a new year may be slightly premature to look too far ahead at what 2024 holds in store, but – already in the first few days – we’ve seen some global issues such as conflict in Yemen – that could hit UK retail and consumer pockets.
2024 is expected to pose some continuing challenges (sorry), with cautious consumers, economic uncertainties, and specific issues like rising business rates, and disruptions to shipments (i.e., from the Far East via the Red Sea) influencing the retail landscape. The food and grocery sector, however, does appear more resilient with encouraging performance despite some month-on-month variations.
At Huq, we like to be realistic and positive, so reflecting on our 2023 insights, and looking at early assessments and observations from industry leaders, we’re going to outline some ways Q1 (and onwards) could play out – and how to optimise your own performance throughout.
Retail strategy
At Huq, our unrivalled location intelligence aids retail and real estate leaders to make sound strategic business decisions – and we’re pleased to note that retailers have re-engineered supply chains for cost-effectiveness, allowing for sustained discounting. This trend is likely to persist given the current economic environment.
We also witnessed higher promotional activity in retail at the end of last year, because of the extended and deeper special offers, sales, and product pushes during the festive season. We wouldn’t be surprised to see supermarkets continuing this trend in particular – for example, we’re already seeing adverts for Aldi on our screens, outlining persistent reductions in-stores, outrivalling competitors over price.
In addition, Tesco and dunnhumby have just published their own insights – boiling down five major themes that, they suggest, are going to play a significant role in retail strategies and tactics over the course of the year ahead. Three predictions we’re excited about – that can be identified and supported by location data intelligence such as ours – are what Tesco/dunnhumby term:
• The connected store
• continuous commerce and
• blended shopping
Their report details all three at length, but let’s look at how Huq could influence what your business does to adopt and adapt to these three concepts.
Connectedness and location data
A connected store essentially refers the smart use of a variety of in-store environments, devices and technologies to seamlessly tell a story to customers to connect them from entry to purchase. But first you have to know who your customers are, where they come from and how they shop. Huq’s footfall, dwell, and catchment intelligence will provide greater insights as to what story your store needs to tell based on demographic intel, and how long shoppers spend in a location or area. How long should your story be, where do you want the story to end, and what’s the content of that story? Well, the detail is in the data.
Continuous commerce and customer trends
Tesco and dunnhumby spell it out themselves here, “Through data science, brands can generate powerful insights, helping them find their most relevant audiences and focus investments strategically. Even the smallest nudge can deliver big returns when it’s both well-placed and well-timed.” As above, by possessing the insights related to the broad economic power of customers, the distance travelled to store, which area they’ve come from to get to you, and how long they stay, can determine touchpoints for retailers to nudge, promote and repeat product appeals. It could also help support store design, colleague deployment, and supply itinerary.
Blended channels: URL meets IRL
Stacy Gratz, Media Managing Director at Tesco Media & Insight Platform suggests, “the boundary between in-store and digital shopping has been getting thinner for some time now, but with many customers now buying across both channels, brands need to look again at how they engage shoppers as they shift between the two”. So aligned with what we’ve discussed above – understanding the footfall, catchment and dwell of consumers can feed into blending in-store offers with online promotion, and the push and pull between the two. Once you can establish location and demographic data, you can inform marketing strategies that harness the power of both URL and IRL for your business.
There are clearly some really positive and proactive steps that retail leaders can capitalise on geospatial knowledge to maximise marketing, promotions, procurement, and customer journeys.
Consumers
If we take a glimpse at what industry experts are saying about consumer behaviour in the year ahead, we can see caution is still being adopted – and shoppers are expected to continue tightening spending in the opening months of this year due to economic challenges faced over the past two years. Risks like high costs and economic uncertainty are going to persist. We’re advised that consumers may start loosening purse strings later in the year if economic conditions keep improving slowly and confidence edges up. Retailers will therefore need to keep managing costs and promotions carefully to stimulate demand.
For our money – and we’ve outlined some of this above – what retailers can be doing right now is information gathering. Huq provides data in the context of a vertically integrated organisation which sources, cleans, protects, analyses and benchmarks an incredible array of location intelligence – which over 300 current clients across the globe trust and use to trailblaze and grow.
3400
Stores
38
Countries
$12.5Bn
Annual sales
Huq’s catchment insights allows JD to more accurately assess the impact of the wider retail catchment on the sales potential of new store opportunities
Alastair Browne, JD Group Head of Site Research & Strategic Insight
