In focus: Frank Lehmann, Retail Profiling
During the pandemic, space and time have become more fluid. Working from home has evolved into a new routine for many people. But there is more to it: home is the new hub –office, school, store, restaurant and holiday destination at the same time. Working in the evenings, shopping during daytime or late at night has resulted in an implosion of the traditional “9 to 5”. More fluidity demands flexible solutions, at the same time creating new occasions.
Key behaviors 2021
For 1 in 4 Europeans (EU-7) shifting especially where and at what time we shop, has erupted and home delivery soared, for example in the Netherlands by +37% occasions. The consumption of “bad food” – or better “soul food”, given the circumstances – increased: Major snacking categories such as salty snacks and chocolate both gained share of wallet in FMCG.
What will stick in 2022
As regulations are lifted, pre-pandemic routines will, to a certain extent, be reinstated and some of the fluidity shocks will attenuate. This will be especially true for meals at home, the ordering of food to takeaway or for home delivery (-10%) and the consumption of snacks (-21%).
Hybrid working models and working from home will nonetheless become the “new normal”.
In The Netherlands, 64% expressed the intention to regularly work from home post COVID-19.
With a permanent change of these shopping routines, retailers should prepare for the “weekly shopping” and big baskets on weekdays, as well as delivery and more (walking) occasions to convenience and specialty stores.
Continuously recruiting buyers and adapting shopper activation plans should be top of mind, also to stay ahead of new distribution channels such as the ever-expanding e-grocery.
As the recent GfK report "Uncovering friction in e-grocery: experience as a growth driver" found, especially flash delivery will experience fast growth in the next months, becoming the No. 1 contender for immediate, in-home consumption.
Increased fluidity in the spheres of life are creating new occasions and will subsequently bring new providers to the market – traditional divisions of in-home and out-of-home business units belong to the past and can impede innovation.
Frank Lehmann is a respected voice in the retail industry. He has more than 40 years of experience working for large department stores and retail chains, including as Chief Executive Officer (CEO) of Kaufland (Holding).
Today, he and his team at Retail Profiling advise and support retail companies in the strategic development and implementation of retail business processes and strategies.
Lehmann, a recognized retail expert, is also publisher of the online magazine Supermarkt Inside and author of the respective blog.
For Frank Lehmann, one thing is clear: stationary retail is not dead and will not die out. Retail companies will continue to invest in retail space. In his view, one main trend is “hyper personalization”, the continued, personal - albeit automated – customer contact, for example via bonus cards.
Modern technologies such as self-scanning will become mainstream, also in Germany, but not as a substitute. On the contrary: More services and in-store excellence are indispensable - the customer must have the choice. "Technology is not a cure-all. IT does not make bad concepts any better."
To generate the revenues to fund necessary investments, retailers have to concentrate, consolidate and cooperate, and possibly make unpopular choices, such as closing or selling unprofitable locations, discontinuing loss-making business units, for example non-food, and optimize the value chain through attractive acquisitions.
Lehmann criticizes that in the course of omnichannel initiatives, the brick-and-mortar business has suffered. Employees and storefront performance are being neglected, the brand and revenues are suffering. In his view, core competencies and strengths in-store must have top priority. Once top retail performance has been achieved in-store, the implementation of new technologies and only then building an omnichannel strategy are the next steps. New working models, outstanding customer services and professional communications are important to ensure stationary quality and top-notch retail performance.
Watch the full interview