A few years ago, bigger was viewed as better. It saw supermarkets balloon in size to become out-of-town behemoths. But the grocery retail landscape has changed, rapidly. The discounters’ star continues to rise, prices continue to fall, while shoppers are becoming increasingly promiscuous.
While every one of the big chains continues to struggle to find ways to put clear space between themselves and the competition, the issue of physical space is proving equally challenging. With the move to grocery shopping online, supermarkets find themselves with a great deal of additional space. As a result, many retailers are now asking: ‘what do we do with it?’ And more importantly, how do they make it work more productively and profitably?
Having tried various ways to rejig their own formats and range, they are recognising that in-store spaces must better reflect the shifting needs of shoppers. Those that do have bigger stores are now considering other service offers – think Harris + Hoole coffee shops and Giraffe restaurants in Tesco.
Perhaps the most interesting recent tie-up however is that between Sainsbury’s and Argos. This time last year, the two retailers teamed up to open 10 new Argos digital stores within existing Sainsbury's supermarkets. On the one hand, it provided the grocery retailer with an opportunity to address some of the space issues within its own stores. But on the other, did it also signal an important next step that could soon see furniture retailers making a new home for themselves?
The rescue of Habitat by Argos owner Home Retail Group back in 2012 saw the famous furniture brand open a number of in-store concessions within Homebase. Mini Habitat is set to come out of Homebase stores in 2016, with the latter due to disappear from the UK market – the result of Wesfarmers’ acquisition of the DIY retailer that will see stores replaced by the Bunnings brand. It appears Mini Habitat concessions are not part of Bunning’s ongoing business strategy. Could Sainsbury’s provide the perfect home?
Then there are the likes of Benson for Beds, Harveys, or Barker and Stonehouse. And what about the king of everyday furniture? Could it too soon find its way into our supermarkets? IKEA’s first ‘Order and Collect’ store in Norwich opened in late 2015. It’s a small, experimental format that could lend itself perfectly to an in-store concession.
In many ways, this is the next logical step. Grocery retailers have invested heavily in recent years to improve their homewares, and cook and dine ranges. But here too, the discounters are now getting in on the action. In summer 2015, Aldi launched its homeware range, with prices starting at just £3.99. This could prompt the Big Four to move into ‘harder’ homewares. The first step to creating a truly great home is the desire to put down deep and stubborn roots. It appears that there is a growing appetite amongst grocery retailers to do just that with their homeware ranges. But taking things to the next level will bring a dilemma. Not just how food retailers can present the offer in the best possible light, but also, more importantly, in how effectively furniture retailers would be able to manage in-store implementation within supermarkets?
Furniture retailers are well versed in delivering room sets and furniture builds within the highly controlled environment of their own store estate. From introducing new furniture lines to the floor displays, to re-siting existing stock lines, removing outdated furniture and replacing damaged items, and adhering to Health and Safety regulations. These will all be familiar to furniture retailers. But factor in doing all that within a supermarket environment and both the complexities and pressures are magnified.
Grocery is a uniquely challenging and demanding environment within which to activate in-store campaigns and merchandising solutions. It’s a world where convenience is king. In bigger stores, that means shoppers have 24-hour accessibility. And that brings with it an operational challenge that furniture retailers typically do not have to face within their core retail estate – implementing complex in-store display schemes with minimal disruption to normal trading. And not to forget the host of practical, operational issues associated with installing any display within grocery retailers. Having installed point-of-purchase campaigns for many major FMCG brands, we have first-hand experience of just how many and varied the challenges to ‘landing’ a campaign in-store can be, and how important it is to have a ruthless commitment to planning and attention to detail. Getting it right when it comes to a single display unit is often difficult enough, let alone entire room sets. Then there are the common issues associated with managing a brand’s ‘residency’ within a third party retailer – with no control over operational issues such as power, staff and compliance, all of which can so often be the difference between success and failure.
So, a word of advice for all the furniture and grocery retailers who may be considering setting up home together: Take time to think about how you will create your dream space, and plan for how you will lay the all-important foundations. Space within our supermarkets might be in greater abundance than ever before but the pleasure involved in occupying them has never been scarcer. Whatever the future role furniture retailers may play within our supermarkets, it’s important to remember that the secret to every good home is one that is lovingly made.