France: Retail Trends
Posted on | December 26, 2009 | 3 Comments
This is second in a series of blogs about a December trip to Paris with DePaul University.
We met with numerous executives and public officials over eight business days. Our first meeting was with Frederik Perodeau, head of IFM, the French Institute for Merchandising, which represents major brands such as Coca-Cola and Procter & Gamble, and retailers such as Carrefour, grocery store Monoprix, IKEA and FNAC ( a fantastic entertainment store where several years ago I bought a two-disc set of French iconic singer Serge Gainsbourg.)
IFM, founded in 1972, tracks retail trends and statistics. Frederik noted that the average French family buys products representing 300 SKU’s (the number associated with an item on the shelf). And the average shopper puts 10 to 50 SKU’s on average in her grocery basket. This means that there is lots of competition for a shopper’s attention, what with 6,000 to 9,000 SKU’s on offer in a typical grocery store.
As with the U.S., French shoppers tend to remain loyal to their brands or the types of food they buy—they tend to ignore the thousands of other items vying for their attention and euros.
“Mom uses 300 SKU’s which means she is not interested in the other 49,000 SKU’s at a hypermarket,” Frederik said, referring to the massive amount of products at “big box” stores similar to Wal-Mart.
Whereas the French liked big-box discounts for a time, they are now beginning to turn their backs on massive stores and returning to small, specialized stores. I’m happy about that, for when I think of France I think of the charming little neighborhood stores—I don’t want France to look like an American strip mall.
Frederik noted that people in emerging markets such as China and Brazil people want big-box stores. They want the choice that comes with a developed economy. Ergo, retailers are building massive stores there. He predicts that in 20 years China and Brazil will have a real-estate problem on their hands, as consumers will return to smaller stores. What will those countries do with all the big-box real estate?
Frederik hit on an important cultural issue—the fact that French salespeople “used to not be that nice.” This is debatable as I have often had great service in France. (Yet during the trip, a waiter didn’t want to accommodate my “off the menu” request.)
In America, we have a strong service culture because salespeople, waiters and the like live on commission and tips. But in France, salespeople and waiters earn a set salary and have national health care—they often don’t need to go the extra mile for their customers. But this is beginning to change, because French customers are demanding more personalized service. “Salespeople are more and more important. It’s an important trend in France: Salespeople need to be more personable,” Frederik says.
A major driver behind this trend is the internet. “Shoppers are more expert than salespeople,” he says. That’s why companies are now training their employees on the products they sell. Frederik doesn’t think the internet will replace brick-and-mortar stores but it will require educated salespeople who can knowledgably steer their well-educated customers to the right purchase.
Frederik noted another urban trend in France that is similar to one in America: the emergence of single adults who lead incredibly busy lives. Monoprix, the grocery store, has launched a new store called Monop’, targeted at single professional women. I saw a woman eating at a Monop’ during the trip—a far cry form the two-hour meal we might associate with French culture.
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December 28th, 2009 @ 1:51 pm
Interesting correlations between the trends in the French and US retail consumer markets. The trends in retail merchandising are always evolving and it is important to stay on top of them through market research and analysis – information like this article is always a useful read.
December 28th, 2009 @ 3:31 pm
Thank you indeed, especially coming from a retail expert such as yourself!
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