Convenience, experience and sustainability: How food businesses can retain consumers in a fast-evolving retail landscape
The expert panel comprisied Lulu Group Exicutive Director Ashraf Ali MA, Nielsen Zone President and Global Consumer Insights Nick Papagregoriou, and Interstore Creative Director Bernhard Heiden.
Moderated by Gulf Gourmet Editor Aquin George, the panel convened at the Gulfood 2019 show in Dubai to discuss the consumer evolution in the Middle East, and how to revolutionise retail in order to meet these needs.
Although overall the panel found that the Middle East ‘could not escape’ global trends, several key areas were identified for local food firms to pay special focus on in order to keep up with changing consumer needs in the region.
According to Ali, convenience is the main key focus that consumers today are focused on, and consequently is what food companies need to prioritise as well.
“Customers today want convenience. The buzzword today is [that consumers want] convenience daily,” he said.
Papagregoriou concurred with this, adding that this has been driven by easier interconnectivity and e-commerce availability in the region.
"E-commerce is much stronger in some of the Asian countries. As you know, Korea leads with a 20% share of volume, China is also strong," he said.
"So, I don't think the Middle East escapes from the global trends,The consumers are looking for the same [things], the same shopping experience. They're looking for convenience, freshness, quality of products, price.
That said, he added that the Middle East market differed from other countries in terms of the strength of its traditional trade scene.
"[Traditional trade] still plays an important role in the marketplace because it fulfils a specific consumer need [and hence] maintains a significant share of the market," he said.
Heiden added that connectivity was also very important, saying that ‘bringing online to offline’ would be a crucial area to take note of, citing examples such as removing products from physical stores to make room for experiential shopping and retailing these online.
According to Papagregoriou, he foresees that this trend is unlikely to change significantly in the next decade, but believes there will be acceleration for some areas of e-commerce.
"Convenience will continue to grow in the region. [...] As for e-commerce, in this part of the region it is less than 1% and [somewhat] hard to measure, [but] I think it will grow at a faster rate for some [food product] categories."
That said, Heiden was less than positive in his reviews about the Middle Eastern food scene when it came to meeting consumer experience needs, describing the country as 'behind' in these efforts.
"When I see Middle East as a food market, from my experience as a food shopper, I think the biggest problem is, [from my point of view], that they are a little bit behind everybody, especially places like Europe," said Heiden.
"There is not really a 'food shopping' experience or custom experience here - you're just selling products.
"So I think there is a big gap [here]. The products are amazing, the people are amazing, but something is missing. [They just] sell the food and don't do anything else."
Ali added that Lulu was aware of this trend, and as such has been making efforts to improve customer experience in terms of product offerings as well as facilities.
“[For Lulu], our facilities depend on geographical importance, so for example our stores in Indonesia and Malaysia do have the facilities to [provide a better in-store experience], for example food service outlets.
When applying technology into customer experience, Heiden added that: “[For the customer], they will think that ‘technology has to help me’, for me to bring things together and connect me, [so] it is important to find the right mix of what is helping [in online and offline].”
Ali stressed on sustainability as an area receiving lots of consumer attention, adding that Lulu has 'strong agreements' with its back-to-back manufacturers and suppliers ensuring that they are compliant with required standards.
"Be it ethical, sustainable, free-from or labelling requirements, we give a lot of importance to these points and have [systems in place] to ensure compliance to standards," he said.
Both Papagregoriou and Heiden added that sustainability concerns were not a trend or fad, but were here to stay, hence need to be given extra attention.
"It is normal [and] a necessity, you have to do this," said Heiden.
Maintaining customer loyalty
In terms of maintaining customer loyalty, Papagregoriou said that: "Customers have been 'trained' in terms of looking for the best deal and best value for money.
"So to keep customers loyal, [food firms] need to work both at the tactical level in everyday in-store execution, [as well as] invest in and leverage on technology. For e-commerce, [things like] making the shopping experience faster, better and more pleasant will matter."
Heiden added that companies that bring in personalisation for the consumer would have an edge as well.