What could the future of convenient shopping and eating look like in the UK?
You’re heading home after a long day at the office. Your connected watch identifies quick-service restaurants nearby. It selects a restaurant and meal based on your dietary preferences and a scan of your vital signs to ensure an appropriate calorie intake. The watch orders the food, pays the bill via your connected wallet and then navigates a drone to meet you on your walk to the train station. By the time you reach home, your watch has received a discount coupon for your next visit to the restaurant.
That’s the scenario outlined by Nielsen in its report, ‘The Quest for Convenience,’ which examines what retail and FMCG companies need to do to stay ahead in the convenience game. Food Spark highlights five drivers from the report that are influencing consumer demands for convenience.
1. Smaller households
People are coupling up less and choosing to have fewer children while high property prices and reduced space for new housing mean physical living is downsizing.
Smaller dwellings mean meal preparation, storage, disposal and eating areas need to be rationalised. As a result, consumers are reconsidering their product choices and usage. FMCG companies will need to focus more on space-saving packaging, multi-usage products, single-serve offerings and optimal family-sized meal options, according to the report.
In fact, Nielsen predicts a scenario where kitchens and cupboards may disappear completely, creating a need for new products and services that previously existed only in sci-fi movies. These include capsule meal replacements and supplements, zero preparation plates, scan to cook, remotely activated meals, and virtual chefs and nutritionists.
Voice assistants and automated ordering will also sculpt smarter and more convenient in-home consumption experiences.
2. Generational needs
Evolving demographics mean different age groups have different convenience needs.
For ageing populations, easy-to-open packaging and home delivery may be more highly sought after, while in markets dominated by the millennial segment, consumers could seek space-saving packaging, ready-to-eat meals and automated offerings. For the infant and school-aged households, healthy snacking and lunch box options will be important.
Smartphones and the rise of smart homes, buildings and cities is increasingly creating an ‘on-demand’ environment, where consumers will have more control to customise, personalise and summon products and services where and when they need them.
Retailers and manufacturers will need to match these ‘in the moment’ needs, leveraging individual data to develop solutions for and deeper relationships with their consumers.
“Technology in the FMCG market is at the heart of convenience. It is essential for matching consumer demand for products and services that are ‘right here, right now and right for me,’” explained Pedro Manosalva, part of retail vertical at Nielsen.
This means that it’s not enough to just match a customer’s searches with geo-location; retailers should also incorporate a person’s past purchases and preferences, as well as connect to other parts of their lives, including health considerations, price history and daily schedules.
“Soon consumers will simply get a prompt from their device asking whether it should order a salad to be picked up at the store as they travel to their 1.30pm meeting,” said Manosalva.
Yet, UK consumers seem to lag in adopting new technology.
The use of social media to aid purchase decisions wasn’t a popular choice, with only 9% of UK shoppers interested, the Nielsen survey found. And when it came to willingness to log in to store Wi-Fi, only a fifth said they would do so to receive more information or offers in-store.
Just 18% of shoppers would be willing to scan QR codes to access more detailed product information, while online or mobile shopping lists were only poplar with 21% of people.
Mike Watkins, head of retail insight for Nielsen, noted there is a need for more education and encouragement in the use of new and emerging e-commerce technologies, which will ultimately deliver the convenience that consumers demand.
4. Online won’t completely takeover, but stores need to adapt
Will the physical store cease to exist? No reason to panic just yet, at least In the FMCG space, according to Nielsen.
The growing demand for immediate, need-based replenishment of food will continue via offline channels. However, these channels will need to adapt as consumers seek proximity and speed. Stores located along busy traffic routes that provide efficient in/out and click-and-collect offerings will continue to grow in popularity, the report said.
Globally, smaller stores were outpacing the growth of large stores, taking 25% of FMCG sales and 70% of shopping trips.
But Nielsen suggests there are ways to attract more people into bigger store formats, like providing eating spaces, the option to order ‘grab and go’ ahead of time, providing nutritious snacks that are adjusted for the time of day and even selling self-heating products.
The report also advocates the introduction of augmented or virtual reality apps to navigate stores efficiently, while increasing store technology for speedy service with the likes of self-scan and automatic basket capture. Currently, 32% of UK shoppers said they are already using self-service checkouts to reduce checkout times.
Retailers’ online services should include same-day replacement for incorrect orders, precise delivery windows that suit consumers’ schedules, rapid responses to special consumer requests and a range of convenient collection points and home delivery options.