Think Smaller for Big Growth: How to Thrive in the New Retail Landscape
Modern retail has long been guided by a powerful premise: the bigger, the better. Over the past 10 to 15 years, however, the modern retail store model has evolved, and this mantra is no longer holding true in many cases. Today’s retail environment is more fragmented than ever. Fierce competition for shoppers has led to an increasing dependency on promotions among large retailers.
In addition, falling birth rates, rising food prices, and stagnant wages are making volume growth in developed markets difficult to achieve. Meanwhile, developing markets, which were expected to follow the same retail evolution blueprint as developed markets, have forged their own path. In several markets, including China, Indonesia, Poland and Turkey, small-format stores have driven the transition to modern retail. Many other markets are still undergoing the shift to modern retail—and it’s likely that some of these developing markets will partially skip the brick-and-mortar phase by moving online early.
The Nielsen Global Retail-Growth Strategies Survey polled more than 30,000 online respondents in 61 countries to understand the pain and the pleasure points about the shopping experience. We examined how well retailers are currently meeting consumers’ needs and why consumers choose one store over another. We also reviewed a selection of 19 product categories to determine the product attributes that are most important. Lastly, we took a look at consumers’ willingness to use additional in-store services and their preferred approach to dealing with price increases, in order to identify areas for development or improvement.
Price Is Important, But It’s Not Everything
When it comes to what shoppers are looking for, price is important. In fact, when we examined the factors that influence purchasing decisions for 19 product categories, price was one of the top two attributes influencing product selection among global respondents. But price and value aren’t the same thing. High-quality produce (57%), convenient location (56%) and product availability (54%) are rated as highly influential in determining where to shop.