The Inovis Blog

B2B International has a good take on the changing facets

of the UK retail industry. Here are the top 3 things we are hearing from our customers:

1. Social and environmentally conscious nature of consumers.

B2B director Nick Hague, in charge of this study, says their findings indicated future trends:

“Retailers felt that technology and environmental issues will drive changes in the next five years. There will be a need for greater in-store design and innovation, especially to counteract the increase in internet shopping and revitalise footfall back to the stores. Other pressures include the increasing likelihood of economic slowdown, and we cannot forget the impact of the Olympics, which is both an opportunity and a threat by draining project staff and resources.”

2. Detailed product information as the mix of multi-channel retailing moves towards the Internet than traditional stores. Customers expect images - multiple photos, size specifications, native ingredient content (as one of our customers said their lipsticks were now marked with whether they were made with animal by-products). This also serves during the product recall process.

Other challenges retailers are facing include the dramatic surge in online shopping by consumers - Recent research for uSwitch predicts that UK online shopping could quadruple and account for c.40% of retail sales by 2020. Figures predict that growth in 2007 will produce an extra £4bn through online shopping and retailers who ignore this channel do so at their peril.

3. Managing the rise of “in house brands” versus recognized CPG brands. With the growth of store brands, suppliers are beginning to look more closely at VMI (Vendor Managed Inventory) with retailers.

At its annual trade show in Chicago this week, the Private Label Manufacturers Association released a survey revealing that store brands are becoming increasingly popular to American consumers. What does the near-term future hold for store brands?

• 32 percent of the products in a shopping cart were private label items;
• 41 percent of shoppers consider themselves frequent store brand buyers;
• 70 percent of consumers agreed that private label brands are just as good as national brands;
• Middle and upper class consumers are more likely to be purchasing private labels in the upcoming year than lower-class citizens.