Inside This Issue - Opinion
Fundamental changes afoot in marketplace
November 15th, 2010
Kantar Retail just released the latest edition of its annual “PowerRanking,” which rates retailers and consumer products manufacturers based on assessments provided by their trading partners of how they handle strategic business fundamentals.
On the surface, the 2010 report looks a lot like previous studies. Walmart is once again the top-ranked merchant, with Kroger, Target and Costco, respectively, retaining their hold on the next three positions. Not until the No. 5 spot, where Wegmans supplants Publix, is there a change.
Slightly more movement occurs among leading suppliers. Procter & Gamble and Kraft continue in the top two positions, but General Mills moves past PepsiCo to claim the No. 3 spot, and Unilever, which had the biggest point gain of any retailer or supplier, took the No. 5 ranking from Nestlé.
If the companies and, for the most part, their relative position in the ratings are no surprise, the concerns and assumptions that undergird them reflect the fundamental changes that have occurred in the marketplace. As the authors of the study, which is subtitled “Superior Performance in the New Normal,” point out, the significant deterioration in economic conditions over the past two years has caused consumers to draw back and rein in their spending, a reorientation that is likely to have long-term implications for how retailers and suppliers do business.
Staying in sync with consumers is essential at a time when the recession might officially be over, but its consequences in terms of joblessness, the mortgage crisis and tepid economic growth are still very much in evidence. Doing so will require an acceleration of efforts to understand the behavior of shoppers, according to the report, and the ability to act on the resulting insights expeditiously and effectively.
"For all of the money spent on identifying and recommending better approaches to shoppers, it all falls apart unless you can execute at retail," says an unnamed merchant quoted in the study. "That is where we are spending the bulk of our time once we know who it is we are going after and how best to appeal to them."
The companies listed in Kantar’s new “PowerRanking” are equipped to respond to the changing consumer dynamics from a position of strength. But, as the report points out, success today is no guarantee of prosperity tomorrow.