The digital war will “overtake the price war” in 2015, as the big four supermarkets try to avoid looking “dangerously homogenous”, retail analysts Planet Retail have predicted.
After a year of price-cutting and brand-matching schemes, supermarkets will now up their game with “mobile technology that will entirely change the way shoppers behave both in and out of stores,” said Planet Retail Global Research Director Natalie Berg.
Retailers will send personalised promotions to shoppers’ phones and offer home-scanning devices to make grocery shopping easier.
There will also be apps for navigating aisles and shoppers will be able to skip queues by paying on their phone, Berg predicted.
Berg also predicts that supermarkets will add alternative collection points for click & collect, collaborate with other retailers by adding in concession stores and start ditching the loyalty cards.
The new technology and offers will arrive as supermarkets make increasing bids for “differentiation”, said Berg.
“Whereas 2014 was largely focused on price, we are expecting 2015 to be the year of differentiation. To survive this period of unprecedented change for the sector, retailer brands must be strikingly clear, targeted and, most of all, consistent.”
When supermarkets differentiate their offer, they “must exploit the discounters’ weak spots- limited assortment and lack of online offering”, said Berg because the “2014 response” of “if you can’t beat ‘em join ‘em” is “not sustainable.”
Yet even if supermarkets take these steps, they will still face a tough ride, Berg warned.
“Forget difficult trading quarters- the Big Four are in for another few turbulent years.”
“Despite genuine signs of a consumer recovery, we have to keep in mind that grocery shopping habits have altered permanently. Discount supermarkets will continue to gain market share in 2015.”
But although discounters “will remain the most disruptive force in grocery retail through 2015”, they could face difficulties of their own in the coming year, Berg said.
“Aldi and Lidl may become victims of their own success. As they add more bells and whistles- from range extensions to self-checkouts to accepting credit cards- they risk heaping too many costs on a business model founded on simplicity.”
These predictions come as it is revealed that the discounter end of the grocery market is experiencing slowing growth, according to latest figures from Kantar Worldpanel.