Wednesday, January 06, 2016

6 Trends for 2016

It is the time of the forecast for next year. Obviously, a lot has gone on last previous years, and it will be hard to know exactly what stands out. Nevertheless, I wanted to share with you 5 trends I believe will be interesting to follow next years.

The French global retailer has experienced much trouble at the end of 2015. Its stock price collapsed after rumors about financial issues, especially linked with the crisis in Brazil, where the company is particularly exposed. Moreover, in France, Casino has spent major amonts of money in order to lower its pricing in order to get back some competitiveness. Casino is earning market shares at the end of the year, but so far you may question if the effort has been good enough compared to the investment.

The Ecommerce channel, which has been launched on the stock exchange market, remains fast growing, but profitability is still not there, and as they other business units are struggling, it is difficult to sustain. 

Casino had to sell some assets in order to boost its stock market. The champion of the financial markets is struggling, and it will be interesting to see what kind of move Casino can accomplish, whereas its high debt and struggling results makes it weak.

The technology has popped up in 2015, a lot of tests have been undertaken, but so far, not a lot of concrete usage have been found out. I don't think we will see beacons for advertizing purposes. Nevertheless, its usage to understand better the shopping path and experience will be key to use in order to create the stores of the future.

Lean Retailing 
We have discussed about it, but from a supplier prospective, they try to lower their brand portfolio, and their product range. The number of products available has skyrocketed the past few years, and too much choice is a bargain in terms of operation costs, both for suppliers and retailers. We will therefore probably see the shrinkage of the number of skus in retail in 2016. 

Hard Discount
Hard discount in 2016? More than ever! People thought their market share would shrink, but it does not stop growing. You may check my previous posts but Lidl plans on investing about 4billions € in the next few years in France only, settle in the US. Aldi is pursuing its growth worldwide, and is still hurting big time Tesco in the UK. 
Hard discount maybe a part of the commerce of the future, especially as it is constantly innovating to find new customers.

Beside the "price war", service will become a key factor of differenciation. You can clearly see services such as Amazon Prime, or home delivery constantly growing. Customers start to see the added value of such services.  Its even more true for the grocery ecommerce business. Due to the high operational costs, they won't be able to be competitive unless the customer understand the real cost of going in store and/or the benefits to be home delivered. A real challenge. But when you see Amazon's initiative or Cdiscount in France, I believe that other competitors may get in the competition.

In France, it is the second year of the purchasing alliances. And the stakes are high. The goal is to indeed see a clear uplift of the purchasing terms in order to help raising the margins of retailers.
On a European stand point, we see more and more alliances coming up: Metro with Auchan, Dia with Casino, Cora with Carrefour, Fnac with Darty...

Those negotiations will become more and more essential, and we will probably have a lot of headlines about it in 2016.

And you, what are your trends to follow in 2016?