As in most industries, traditional supermarket chains have witnessed in latest years how the emergence of new formats, that could be called “hard discount”, altered the balance of market shares in numerous countries and regions.
The problem is that these new business models do maintain the nature of minimum prices characteristic of “hard discount”, but without giving up quality of the products through the development of private level brands very groomed from a marketing point of view.
Very important and well consolidated chains have approached this new business model, but with the inertia posed when moving towards a direction one has not chosen that causes great uncertainty upon slow and erratic movements.
The groups that have not yet been seduced by this trend, or else, witnessed how they were losing market shares on certain geographies or, more proactively, have been able to find their own competitive space, generally through differentiating their value proposition with premium formats for customers who clearly run away from “Cheap” in their grocery shopping.
Most of these companies are venturing downright for improving customer experience, some of our clients are a good representation of this. In this context, customer experience has a lot to do with physical space where the purchase takes place, and the associated processes (with great weight in cash lines, but also from the advice provided by the service team), as well as with the manner in which the supermarket chain generates connections with their customers, which results in larger retention, increased ticket (and margin), and center prescription (personal and online), definitely, provoking an improvement for the economic results of the supermarket sustainable over time.
In short, the supermarket industry has polarized notably: Most groups have become “followers” of the emerging formats of minimum price, a scarce but increasing minority has opted, on the contrary, to create new relationship models with their clients by providing purchasing spaces fully adapted to the lifestyle of client segments for whom shopping is an important family and cultural experience.