Mass supercenters, e-commerce to dominate retailing, Nielsen says

When it comes to the future of retailing, stop, look and look again, advises The Nielsen Co. At its Consumer 360 Conference in Las Vegas yesterday, the New York City-based global information and measurement company presented its Retail 2015 Forecast, emphasizing that the pace of change is only accelerating as technology, marketing trends and retail formats converge to redefine how Consumer Packaged Goods (CPG) retailers and manufacturers interact with consumers.
By 2015, Nielsen predicts mass supercenters and e-commerce to be the big winners by dollar share gains, growing by a combined five share points between 2009 and 2015. Warehouse club, dollar store and pet stores also will grow share positions. Nielsen forecasts that supermarkets will continue to lose share, but at a declining rate. While both high-end and low-end niche grocers will grow share, overall share positions will remain fairly low given lower per-store sales compared to larger formats. Other key CPG channels, including drug stores, mass merchandisers and convenience stores, will grow dollar sales, but suffer share losses.
“While e-commerce sales felt the recessionary pain in 2008 and 2009, Q4 2009 sales were solid, and interest from both CPG manufacturers and retailers to provide online buying options has never been stronger,” says Todd Hale, Nielsen’s senior vice president, consumer & shopper insights. “With tech-savvy Generation X and Millennials growing in importance in both numbers and spending power, the time is ripe for the next step in the evolution of online searching and buying.”
Hale also suggests that while supercenter expansion may be slowing down from recent years, past performance suggests there is still room for growth. Nielsen expects to see further CPG retail consolidation as retailers look for scale and opportunities to expand their footprint into existing and new areas. Retail consolidation will be most active within the supermarket and convenience channels in the race for scale.
One of the biggest CPG shifts Nielsen sees by 2015 already is underway: the use of smart phones to engage consumers and help them make better shopping choices. According to Nielsen, smart phone penetration stands at 23% of all mobile subscribers and is expected to overtake feature phones in the United States by the end of 2011. Nielsen predicts that by 2015, smart phones will be the primary enabler of consumer shopping engagements, and new technology innovations will generate additional opportunities for retailers and manufacturers.
“Without question, the smart phone has revolutionized how consumers leverage technology to simplify their lives and make better, informed shopping decisions,” Hale says. “At the same time, CPG manufacturers and retailers have developed online and social marketing and brand/banner-specific apps to increase consumer loyalty, build sales and create a competitive advantage. This trend will undoubtedly continue and bring about game-changing innovations to our retail world.”
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