Earlier this month, I had the pleasure of attending the Canadian Grocer Thought Leadership CEO Conference, which is a key event in the Canadian grocery industry. The event brings together leaders from Canada’s food industry to discuss new and innovative approaches that will shape the future of the industry.
A session that stood out from the day’s schedule was entitled “Spoiler Alert: Your Customers are Cheating on You,” featuring Carman Allison from Nielsen. Unsurprisingly, the session focused on consumer disloyalty, much of which is driven by the tendency to shop based on price to spend less money or "loyal to being disloyal." In fact, 70% of customers try to spend less, and are focused on value when they shop.
Small is the New Big
Working against this price disloyalty mentality, growth in the industry in recent years has been driven by smaller, niche brands that align with consumer sentiment. “Small is the new big,” and 55% of new growth is a result of niche brands. At the same time, 65% of small manufacturers are food companies, and over half of them are Canadian. This is worthy to note, as Canadians have a desire to buy local.
How Can Big Brands Compete?
With small brands becoming increasingly prevalent, how then can big brands compete in the space? Some ideas presented include acquiring a new niche company, being nimble, lowering the bar for ROI, and accepting entrepreneurial risk by innovating early in order to stay relevant.
Embracing Consumer Infidelity
The ultimate takeaway from the session was that while consumer infidelity is seemingly inevitable, it should be embraced. Embracing consumer infidelity means that businesses need to understand the consumer, and then be nimble and react accordingly to changes to their behaviour, as well as in the marketplace. Innovation is increasingly important, with 50K new items launched this past year alone. Finally, it is important to chase the consumer, and not the competition.