Store of the Future 2016: Hypermarkets

 Published On: Nov, 2015 |    No of Pages: 152 |  Published By: ResearchFarm | Format: PDF
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In 2015/6 the hypermarket is under pressure. Decline is inevitable, the format was groundbreaking in the 1980s. But this also opens up space for innovations...

Among the initiatives employed are the obvious, the innovative and the truly radical.

More obvious solutions have seen retailers trying to integrate the format with online:

1) by opening drive thrus, click & collect solutions, locker banks or dedicated pick up points.

2) by bringing online technology into the store, but often these solutions interrupt the shopping journey. In most cases they won’t bring about transformational change either.

3) by renting out space to concessions. In France, Casino has more or less outsourced its non food business to Cdiscount, the online marketplace. This has added such flexibility and been so successful, that Carrefour has copied the strategy with the RueDuCommerce acquisition.

Moving from the obvious to more innovative solutions:

The old weekly market on the main city square has been revived and updated. Especially in the Netherlands both the introduction of food service elements and the addition of organic, local and hipster brands have been a huge success (Landmarkt, Jumbo). There are different versions, but all concepts described here are radical and have no non food at all.

If revitalisation attempts fail, then retailers should use the space so it is still producing value for the business. Retailers could use part of the buildings to get into the huge real estate demand for shared office space for (retail) start ups. Retailers could also use the sheds as server farms. These could store crucial business data and the big data from customer touch points in a private cloud.

Moving to the more radical possibilities:

One option would be turning sheds into warehouses to fulfill from. After all many hypermarkets are in perfect locations for this, near conurbations and residential areas. Crucially links to established B2B supply chains are up and running. Instacart or Uber could work well in combination with such out of town depots.

Alternatively, one could combine hypermarket space with UAVs. Solar panels apart, many hypermarket roofs are dead space. One could now use drones and robots to make urban farming on roofs a reality, all access needed would be a lift shaft. 
Executive summary p10

Context: Does the format have a future? p17

France’s no1, Auchan Vélizy 2011-14, sales in €m, 18,800 sq m p18
Hypermarkets: The problem – despite Velizy’s sales density of €15,000 per sq m p19
Hypermarkets: And now even Kaufland is starting to struggle… p20
Hypermarkets: Kaufland’s great modernisation programme for 50 German hypers p21
Hypermarkets: No reason to get carried away, the format will survive p22
Hypermarkets: B&M stores and the move to omnichannel p23
Updating the model, combining the offer with online p24
Hypermarkets: The obvious solutions being installed right now p25

In store technology: tinkering around the edges? p26

Hypermarkets: Using in store tech to make the shopping trip friendlier p27
Hypermarkets: Carrefour trials geo fencing p28

Recommendations: A word of warning – details matter p29

Following the shopper use case p30
Recommendation: adapting technology to shopper use cases p31

Localisation – In search for authenticity p32

Hypermarkets: Bringing out the local roots of the store and authenticity p33
Localisation: US retailers looking for authenticity Nike, Target and McDonald’s p34
Localisation: Kohl’s and Macy’s range localisation p35
H-E-B: Neighbourhood concept store in Wimberley, Texas p36
H-E-B: Unique store features at other H-E-B outlets, Instacart tie-up p37

Concessions, renting out – scouting for partners p38

Hypermarkets: Concessions, giving up on turning it around from own position of strength p39
Tesco: Extras to stock Arcadia brands, Asda on the look out p40
Sainsbury’s: ...rivals also filling up dead space, the Argos link up p41
Other uses of redundant space: restaurants and child care facilities p42

Click & collect, drives – all eyes on food and robots p43

Future channel innovation: Drive thrus becoming automated p44
E.Leclerc: the pizza and sushi drives, updating and combining the offer, highways p45
E.Leclerc: slowdown and closures ahead, a drive for downtown p46
Asda: Click & collect pod concept p47
Amazon: Grocery drive thru plans in the US p48

Revitalisation strategies: the long tail, 3P non food marketplaces p49

Hypermarkets: teaming up with a 3P platform p50
Casino: Cnova/Cdiscount, the best French omnichannel player, financials p51
Cnova: GMV growth, the IPO, using Casino’s vast network to compete p52
Cdiscount: Global operations, active customers, key foreign markets p53
Casino/Cdiscount: FBA equivalent, C le Marché runaway success, going offline p54
Groupe Casino: the French online grocery offer, home delivery, drives, click & collect p55
Cdiscount: recent developments p56
Summary: Offering an integrated solution Casino & Cdiscount p58
Ahold: latest financial results p60
Ahold: acquisition of complements the supermarket business p61
Ahold: non food and click & collect potential p62
Ahold: 3P marketplace accounting for 20% of 2014 GMV, the AH overlap p63
Recent key developments: BOL’s 3Ps hit €100m in sales p64
Recent key developments: US revamps, NY expansion, same day delivery p65
Recent key developments: self-scan stores, Delhaize merger update p66
Summary: Offering an integrated solution, Ahold & Bol p67

Recommendations: implications and keys to success, learnings from Ahold and Casino p68
Non-food marketplaces: Grocers transforming into true multichannel players p69

The revival and rebirth of markets: Hypermarket equivalent of the future? p70

Hypermarkets: copying markets, the former inspiration of the concept p71

Landmarkt, Amsterdam – The trendsetter, all organic and regional p72

Landmarkt: the revolution has started, a 3P marketplace in the offline world p74
Landmarkt: a Wholefoods 2.0? p75
Landmarkt: cash flow issues and the link up with online p76

Jumbo Foodmarkt, Breda – How to get food service right p77

Jumbo: sales figures, omnichannel strategy, Foodmarkt concept p78
Jumbo: the Breda store, dishes at different stages of preparation p79
Jumbo, Foodmarkt - the focus on foodservice p80
Hypermarkets: Jumbo NL, sampling and tasting sessions, retail theatre p81
Hypermarkets: Jumbo NL, no non food, 36k footfall per week p82

Rindermarkthalle, Hamburg – Market anchored by the majors p83

Rindermarkthalle Hamburg: rebooting original markets, anchored by brands p84
Rindermarkthalle: Aldi Nord moving into hipster territory in Hamburg, sharing footfall p85
Aldi Nord store visit, Rindermarkthalle Hamburg p86

Torvehallerne, Copenhagen – Food service and Retail mix p87

Torvehallerne Copenhagen: €30,000 per sq m, incredible sales density p88
Torvehallerne Copenhagen: reasons behind the success, food service p89
Torvehallerne Copenhagen: the inspiration behind Markthal Rotterdam p90

The street food revolution - looking for shed space and shopping centres p91

London Union: Changing London’s food landscape, looking for shed space p92
Hypermarkets: London Union, the boom in street food p93
Hypermarkets: street food vendors in Trinity Leeds p94

Moving the format – into the inner city p95

IKEA: the city centre store, smaller but taller, Hamburg Altona p96
IKEA: city centre stores to revive the high street? p97
IKEA: what has happened, food service a run away success, a store visit p98
IKEA: among top 5 of most visited German stores, but basket sizes down p99
IKEA: innovative furniture delivery solutions and the need to adapt ranging? p100
IKEA: Altona a template for future stores? p101
IKEA: click & collect stores, Canada, Greece, Thailand and the UK p102
IKEA: bringing out-of-town to town, moving on to Oxford Street? p103

The logistics opportunity: Turning sheds into DCs p104

Hypermarkets: Logistics opportunity, demand for DCs for online fulfillment p105
Margins: all about route optimisations and efficiency, the rise of click & collect and lockers p106
New use case: hubs on the outskirts, bundling trips from all retailers, milk round deliveries p107
City consolidation centre – a chart p108
The evolution of the high street: start ups, pop ups, smart cities, smart parking p109
Changing context p110
The future high street: low emission zones, congestion charging, pedestrianisation p111
4 case examples: Copenhagen, Melbourne, Bogota and New York p112
Liveable cities: the triple bottom line p113
The future high street: the triple bottom line, learning from shopping centres p114
The future city: pedestrianisation leads to logistics knock on effects p115
Smart parking: ecosystem link up, temporary pedestrianisation p116
Heathrow Terminal 5 - a model for the high street? p117
Heathrow Terminal 5: reducing cost, improving OSA, increasing sales p118
Hub Solution: combining sectors, online grocery & food service, comprehensive solution p119
Retail logistics: Reducing the empty runs, interleaving p120
Retail logistics: Partnerships will become a necessity as online shopping continues to expand p121
Rethinking outbounding p122

Reconsider usage – The attraction of sheds p123

Hypermarkets: shared co working space – start up and innovative spirit p124
Hypermarkets: server farms, private clouds for customer data, vertical integration p125

Drones & urban farms – A radical departure p126

Hypermarkets: urban farming and opening up roofs, City Farm Systems p127
Hypermarkets: drones for agriculture and drone helipads p128

Outlook: what to do now p129

Outlook: format to remain under pressure p130

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