Swedish food retail could learn a lot of Trader Joe's and other data-driven factors

Swedish food retail could learn a lot of Trader Joe's and other data-driven factors

Professor Sven-Olov Daunfeldt at HUI Research knows the Swedish retail food market better than perhaps anyone else. And he's not very impressed with what he sees.

What is it that keeps Swedish trader awake at night?

"I think they sleep pretty good. That's what I think is a little sin with Swedish grocery stores - there are four major players who share nearly 90% of the market. There is a competition between the players, but it takes place primarily in store concepts, i.e. supermarkets compete with other supermarkets and convenience stores with other convenience stores. Sometimes it comes in a new operator basis, as Lidl, but they quickly find their niche and the big four continue to mainly compete in their concept and yet nearly 90% of the market. "

Is the lack of competition means that most stores look similar?

"Rather, lack of dynamism. It would require a major new player. Today, you feel not so compelled to develop the business. Although there is much to improve. "

Can you give some examples of the areas for improvement?

"The customer experience can be improved significantly. There is no big difference in how they are treated in the stores under various brands, you will barely respond at all. You hardly see any staff except at the checkout and when they unpack the goods. You could do something about. "

Is there anything that Swedish retailers are good at?

"You are generally good at keeping clean and tidy in the store and they are often good at showing off the range. Many shops are skilled in targeted marketing with their customer clubs in the bottom. But I know that merchants often prefer to run away and tinkered with new technology than to focus on work in the shop with knowledgeable and friendly staff. "

Are there any "pockets" in the market that are underdeveloped?

"It makes it absolutely. Example, we have a rapidly aging population, where many "55-60-plussare" very good economy. This group is not working towards a sensible way. I think they both would be able to tailor better deals for this category of potential customers and be able to adapt the design of the physical stores so that they became more welcoming, as a natural gathering place for a slightly older group of customers. Build nice café adjacent to the store maybe?"

Operates other chains like this - Sweden is left behind?

"Well, we are a little conservative compared to the most ambitious foreign chains. I'm very fond of the American grocery chain Trader Joe's. They are extremely data-driven and service-oriented. They constantly measure the sales of all products and clears quickly remove products that customers do not want. They're also good to have an exciting range of goods from all over the world and a good selection of organic products. Trader Joe's is not a discount chain, but their customers feel that they get value for money, quality and good service makes it affordable. Trader Joe's is very good at getting customers to come back and they are considered to be almost always peak when American consumers are free to specify the retail chain that they are most pleased with. "

Many believe that individualized communication in the store is the next big thing - linking customer club to offer not only in advertising, but also in the physical store - what do you think?

"Many people are good at digital signage and digital communication in store. The question is how far to take the concept of directional communication. Different people perceive it differently. If you show a tailored offer for a person in a store, you risk getting an incredibly powerful backlash of an individual who feels that you stepped over a boundary integrity. While other individuals think it's great with a customized offering and did not feel offended at all. "

Merchants may not be willing to take that risk?

"That may be so. But customers are governed very much today in subtle ways that they are hardly aware of. Music in stores, ways to advertise, how to design the customer journey inside the store, where different kinds of types of goods placed - all this control customer behavior much more than they are aware. "

How should we think about technology and IT as a way for a store to increase competitiveness?

"You can absolutely develop all possible technologies that make the customer experience better and checkout queues shorter. That said, Trader Joe's is very data-driven and other chains, such as Tesco, have shown the way for what can be achieved with customer clubs and targeted communications. But I think you might miss a simple and obvious thing - and that is that you should design their store so that customers feel acknowledged. When an affluent retiree enters a typical supermarket today there are no staff in his or her own age. Employ a service-oriented person with the gray temples devices charm if you want the pensioners’ money!