Asia / Pacific Council, 2011: Asian grocery retailers have enjoyed strong, profitable growth in recent years in line with the region’s economic development, and see continued urbanization and the rising wealth of city dwellers as a rich seam of future profits. In Indonesia, for example, annual per capita spending on groceries is around $560, and is expected to rise to $860 by 2015. In China, it is only $340, but set to more than double to $740 by 2015.
Many retailers therefore plan significant investments in modern retailing formats to meet growing demand. But before doing so, they should consider how the next generation of grocery buyers will actually shop. Given the extent to which the Internet is already a central part of teenagers’ lives and how convenient it is to buy groceries online, the future role of physical grocery stores would seem to be in question. Just as many young Asians have never used landline phones since the advent of mobile phones, will the next generation of grocery shoppers bypass grocery stores? If they do, much of the sparkling new retail space now being planned may end up abandoned, rather like the mining ghost towns that dotted the American West after the gold rush.
It is within this context that the Coca-Cola Retailing Research Council Asia undertook a study to understand how grocery retailers can attract Generation 2020 shoppers – that is, those consumers currently in their teens – when they become adults. We studied seven countries, representing different levels of retailing trade development. Our findings suggest that today’s teenagers will be enthusiastic grocery shoppers. They will also shop in quite different ways, however, and retailers will need to adapt accordingly.
First, they will need to work hard to meet consumers’ basic demands about what a physical store or digital channel should offer in terms of, say, product quality or online security. And once these basics are met, they will need to make sure their retail formats deliver on one of two fronts: Ease-of-Shop or something akin to entertainment – a shopping experience. In addition, whether or not grocery retailers choose to create a digital retail channel, they will need to deploy digital tools to engage with and win the loyalty of Generation 2020 shoppers.