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Opinion
02/08/2016

The food retail industry of the future

Aurelio del Pino González. President of the Association of Spanish Supermarket Chains (ACES)

As Churchill said, "I always avoid prophesying beforehand because it is much better to prophesy after the event has already taken place". Figuring out how the retail industry of the future will be is no easy task, as there are many complex factors that that affect our sector's activity: macroeconomic scenarios, geostrategic factors, sociodemographic aspects, technological determinants, environmental requirements, etc.

But however daring any prediction might be, I would like to highlight some of the key issues that supermarket chains are working on with a view to responding quickly to customers' current and future demands: the omnichannel business model and new technologies, innovation in processes, environmental sustainability and consumer evolution.

Firstly, the next few years will be affected by the challenges posed by new technologies and the omnichannel business model. The goal is to leverage all channels to inform customers, listen to their suggestions and provide them with new services and abilities. Supermarket chains will undertake the omnichannel business model as a service for their customers and as a business line. Coherently aligning the physical and online channels with a view to being "present" at all times of consumption, and providing more and better information and the ability to purchase, receive and pick up products, is the main challenge. Furthermore, in this new framework, it's challenging to explain schedule limitations and administrative restrictions. On the other hand, the power to analyze consumers' preferences and needs has only been explored in part. Through big data technologies, a lot of information will be able to analyzed which will surely improve and adapt the sales offer, and it's important to remember that a better understanding of the market and customers benefits consumers first and foremost.

Secondly, to be able to foresee trends and needs, and respond quickly, collaborating more intensely with the other members of the food chain has never been more important. One of the fundamental elements of this collaboration must be innovation, not only in products, but also in processes. When it comes to finding suppliers, our companies are looking for supply conditions that guarantee quantity, quality, variety, prices and deadlines. The situation shows that, despite the complexity of operating with an extensive network of stores, we have been able to incorporate not just global innovations, but also local products that greatly satisfy customers.

Thirdly, there's environmental sustainability, an aspect that companies have been working on for many years. Supermarket chains are not only setting an example, but they're also helping transform other sectors. One example of this is the initiatives for the efficient economic and environmental management of energy resources, logistics, waste and the supply chain.

Lastly, we must continue to respond to an increasingly complex population with more specific needs. Our activity helps improve people's quality of life, ensuring that mass market foods and products reach the entire population, everywhere, as we adapt to the needs and preferences of all customers, and making adequate and adapted nutrition available to all people. Supermarket shoppers are constantly looking for a more complete shopping experience, with fresh produce, especially fruit and vegetables. However, every consumer is different and the supermarket must offer products adapted to different tastes and budgets, as the range of different types of consumers is increasingly broad. For example, following the crisis, demand for gourmet, healthy, new and innovative products increased as consumers become interested once again in their health and having fun. Another phenomenon is the two groups that are going to be more in the spotlight: senior citizens, who want healthy products with a large focus on fresh items; and young people, or Millennials, who are more receptive to technological innovation and more sensitive to information related to sustainability.

In short, the supermarket of the future will be more technological and, therefore, distribution chains will be too. A face-to-face sales experience will remain essential as part of the Mediterranean Diet concept, and it will continue to be a fundamental avenue for channeling innovation. However, the profitability of supermarket chains will continue to rely on efficiency and competitiveness. Consumers have always sought out value-for-money: that's the combination the companies have tried to offer before and after the crisis, and which they will have to continue to offer in the future.

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