Switzerland

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  • Date: 4/17/2013

“Grocery stores will change dramatically” 

KPMGnews Interview with Jürg Meisterhans, Sector Coordinator Retail Trade

KPMGnews: Will we be doing all of our grocery shopping online in 2025?

Jürg Meisterhans: No, that is one of the central findings of the study we conducted jointly with the GDI. While there may be a clearly visible trend toward increased online purchases of non-food and standardized food items in particular, consumers in Switzerland still want to buy their daily groceries such as meat, vegetables and dairy products in stores. After all, not every apple is identical. In-store shopping is the only way to be instantly assured of a product's quality. Plus the cost of having groceries delivered to your home is still high. As a result, small online purchases usually aren't worth it. That doesn't mean, though, that the food retailing industry won't change – on the contrary: several different developments will prompt major changes in grocery stores in the future.

KPMGnews: What sort of changes will that be?

Jürg Meisterhans: Take a look at our day-to-day lives, for example: The number of people whose lives always consist of the same day-to-day structures is decreasing. Working models are becoming more flexible and leisure activities more spontaneous. Once-a-week shopping trips to do an entire week's worth of grocery shopping aren't the prevailing standard anymore. That would require that we all plan out our meals for the next few days. Rapid growth in the use of mobile devices with internet access means that decisions today can be made more quickly and more spontaneously. All that promotes a society which is accustomed to having everything at its fingertips at any given time. The number of people buying their groceries "around the corner" is on the rise while car trips to supermarkets in peripheral locations are declining. That also corresponds with the needs of a growing market of people 65 and older that have difficulties with longer journeys and walking distances. Energy prices also play a role. If gas prices continue to rise, that also has an impact on customers' mobility.

KPMGnews: So will stores of the future be smaller and more local? Are there any other trends?

Jürg Meisterhans: Yes, there are. In the past, grocery stores were designed so that as many customers as possible could do their shopping in the shortest possible time. Rising populations will probably make that an important factor in the future, as well. Practice shows, however, a decline in consumers' desire for functional stores and foods with the sole purpose of providing products or nourishment. They want authentic products with ingredients they can trust, products they know are healthy. Meeting these extremely individual requirements will present a challenge. New technologies enable products to be assembled according to customers' personal wishes. It's already possible to order your own personalized blend of muesli online and have it delivered to your home or pick it up in the store.

KPMGnews: Individualized product blends – is that what the model of the future looks like?

Jürg Meisterhans: That's entirely conceivable. It's even more likely, though, that you won't just be able to blend your own products online but your entire shopping cart, too, and then collect it at a pick-up location. This type of shopping saves time. It's also more flexible and cheaper than home deliveries. Stores are one potential pick-up location. Another possibility might be that a person's purchases would be put in a sort of refrigerated "pick-up box" located in the vicinity of the customer's place of residence. With energy prices rising, this scenario isn't implausible.

KPMGnews: What will stores look like where people still shop in person?

Jürg Meisterhans: The important thing will be that – unlike home deliveries or a pick-up box – people will continue to work at those stores and the opportunity for personal contact will be preserved. Customer loyalty and customer service will also play an even greater role in the future. While people may have innumerable virtual contacts, direct social exchanges are, and will remain, one of people's basic needs. In the past, when the residents of cities and villages went to the market square to do their shopping, conversations and social exchanges were an essential part of this. And this is where new opportunities lie for stores of the future: Personal contact will become one of the key distinguishing features. And since standardized products will increasingly be purchased online, this will open up space that can be used flexibly. For instance, the same space can be used to offer coffee in the morning, full catering at noon, and then everything you need for your daily shopping trip in the evening. This arrangement satisfies two needs at the same time: social exchange as well as the possibility of quick, healthy food.

KPMGnews: Which success models will allow grocery stores of the future to acquire the most customers?

Jürg Meisterhans: Within the scope of this study we came up with four scenarios describing what a successful shop might look like in the future: First of all, small corner shops have extremely good chances. These are characterized by both customer proximity and a regional focus while also meeting the need for quick, pleasure-oriented nourishment. Something called "Smart Marts" are also a promising concept: These are stores that rely on additional online-based services. These services could include doing your shopping online, creating unique products in line with your individual needs, or viewing additional information about the food on offer. Decentralized supply points or pick-up locations will replace the big shopping centers. Thirdly, huge supermarkets will need to restructure in the future and focus more on providing eventful shopping experiences. Fourth, online-only shopping portals are a future model that correspond with customers' high level of affinity with new technologies. The high costs of energy and transport, however, are strongly limiting factors.

 

 

Interview: Michael Frei, Marketing & Communications

 

Jürg Georg Meisterhans

Jürg Georg Meisterhans

Partner, Audit Zurich

+41 58 249 35 78

The Future of Shopping

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Outlook for the German and Swiss food retailing. A survey by GDI Gottlieb Duttweiler Institute and KPMG.