PROFILE

Neil Saunders

Managing Director, GlobalData
Neil is Managing Director of GlobalData’s retail division. In this role he oversees the development of the company’s retail proposition and its research output. He also works with clients to help them understand the retail, shopper and market landscape – advising them on how best to develop, evolve and implement business strategies. Prior to GlobalData, Neil worked at retail research firm Verdict for ten years. He latterly held the post of board director with responsibility for Consulting, Corporate Development and Planning. Before Verdict, Neil worked for the John Lewis Partnership where he was involved, among other things, in the planning and relocation of new stores, the development of the ecommerce business, and the creation of technical and information systems. Before moving to the United States, Neil served as a non-executive board director for the Great Western Railway – a role he held for just under 11 years. He currently serves as an advisory board member for the faculty of business and law at the University of Southampton, as an Honorary Lecturer at the University of New Hampshire, and as a Visiting Fellow at the University of Surrey. For more information, visit: www.globaldata.com/
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  • Posted on: 09/24/2020

    A successful diversity initiative led to an unintended consequence at Walmart

    This shows how a one-dimensional focus on diversity, even if well-intentioned, can create issues. There is no easy fix to this, but I think having a diverse candidate pool from which to pick management hires is very important. How can this be accomplished? Ensuring there are equal opportunities and encouragement for all internal workers is one. Making sure jobs are advertised widely and where a variety of different people can see them is another. Outreach to younger people in school and college to explain career options and choices is sensible. In short, a variety of activities are needed to ensure diversity and fairness in hiring.
  • Posted on: 09/24/2020

    Will limited-assortment warehouses help Chewy avoid ‘demand shock’?

    To improve flexibility and availability all retailers will need to look at supply chains and distribution networks. This likely means there will be a shift from a focus on big central warehouses to a more distributed fulfillment system that, as well as large centers, incorporates limited-assortment warehouses and, where a retailer has them, physical stores carrying inventory. This was already happening before the pandemic, but the surge in demand resulting from all the events of this year has accelerated the process.
  • Posted on: 09/24/2020

    Will homes of the future include ‘Amazon Rooms’?

    I can certainly see more homes having delivery drop-off lockers or other secure areas where packages can be left. Some of these will be lockable boxes which are outside of the home. However the idea of most homes having a kind of full-blown mail room where packages can be stored and decontaminated is far-fetched! It may be popular in Hollywood, but Hollywood is not representative of the vast majority of America!
  • Posted on: 09/23/2020

    COVID-19 may push retailers to use voice assistants instead of touch screens

    I can see more retailers exploring this option - but the key to success is ensuring it works accurately, quickly and intuitively. The video example shown in this article just looks annoying and, personally, I'd rather just touch the screen than shouting out a bunch of numbers and instructions. While I accept the need for some changes during a global pandemic, touch is an integral part of being human and I don't think going overboard in trying to minimize it will be met with success unless the alternative is better.
  • Posted on: 09/23/2020

    Will lockers help Lowe’s pick up more sales?

    Lockers have worked well for Home Depot, so they will likely do the same for Lowe's. The main advantage is that they allow consumers to collect orders faster and without having to line up at the collections or customer service desks. For many doing improvements projects such speed and convenience are very welcome. Amazon has also used lockers, both in some of its Whole Food stores and at other locations, and they too have been successful. I think more retailers will likely look to lockers to form part of their fulfillment ecosystem alongside other options.
  • Posted on: 09/22/2020

    Can Rent the Runway move past unlimited rentals?

    A lot of rental has traditionally been driven by work requirements and social events. Unfortunately, both of these things have become very disrupted during the pandemic. As such, the need for rental services has plummeted and volumes of rented product have fallen. This has provided Rent the Runway with an opportunity to assess the economics of its various subscription models and make changes that help it operationally and monetarily. While Unlimited Swap is arguably less relevant now that volumes are lower, there will be some high-use customers who will be annoyed by the shift - but arguably those are the customers that likely cost Rent the Runway money because of their extensive use of the program.
  • Posted on: 09/22/2020

    Will Walmart’s new private clothing line have ‘staying power’?

    Walmart is big in apparel, but this is mostly because of its size and reach. It is an easy and convenient option for existing customers to buy basics, but it does less well at taking share of wallet from more fashion-focused shoppers. Introducing more fashionable own-labels is a potential way of increasing market share. However Walmart needs to think about how the assortment looks in-store and online and how it will reach new customer segments that currently don't associate Walmart with fashionable clothing. As Target has shown, own-labels can be really successful but it takes great execution as well as great product to make them work.
  • Posted on: 09/21/2020

    Patagonia wants to ‘Vote the a**holes out’

    Given Patagonia's customer base, I don't think this will cause any damage. In general, corporations have a right to campaign and support whatever political causes they wish - just as individuals do. However for those with a diverse range of customers the best policy is to steer away from becoming overtly party-political as it risks offending one group or the other.
  • Posted on: 09/21/2020

    Will 2020 be the year the holiday selling season changed forever?

    The holiday season was already creeping earlier and earlier, but the current disruption has acted as a major accelerant to that trend. This year, a lot of retailers will push sales earlier in the quarter and they will, therefore, need to beat those comparatives next year. As such, I think the shift will become a permanent one.
  • Posted on: 09/21/2020

    Can Trader Joe’s continue thriving without delivery and curbside pickup?

    From what I have seen, yes it can! I've visited several Trader Joe's stores over the past few months and every single one, without fail, has a line of people outside. It doesn't matter what time of day you go, the stores are consistently busy. Shoppers like Trader Joe's and they are prepared to make the effort to visit. It underlines that while online is important, getting the product mix and having things people want to buy right are more important still.
  • Posted on: 09/18/2020

    Online to make up 21.5 percent of grocery’s sales in five years

    There is certainly a difference between grocery store sales and overall spend on food and grocery products. However, neither measure will grow by just 2.26% this year -- which is the value given in the report. That is completely out of line with every bit of available evidence -- from retailers, from CPG firms, from official data, and from all other research I've seen. There have been dramatic uplifts in grocery spending because of the trends previously outlined. If, as you note, the major grocers grew by 8.9%, then a group of other retailers must be shrinking enormously in order to pull the overall growth rate down to 2.26%. Who are they? Alternatively, you could be assuming that grocery sales will crater in the remaining months of the year. This is completely unrealistic as it is not what current trends show and it would also assume people eating significantly less than they did last year over the last few months of the year. In terms of the digital number, 2x growth is 100% growth. That is not unreasonable for the peak period. However, the numbers in the report require 207% growth over the whole year to get to 10.2% penetration. There are very few large players reporting that level of uplift. So, where is this growth coming from?
  • Posted on: 09/18/2020

    Online to make up 21.5 percent of grocery’s sales in five years

    Thanks for the observations, Navneet! Here are some things I considered when making my comment: First, when you look at the overall growth of grocery (online and stores) noted in the report it suggests sales in 2020 will be $1,039 billion, up from $1,016 billion in the prior year. This is an increase of 2.26%. It is far too low! Census Bureau data has grocery store sales running at 12.2% so far this year and all of the major grocery players have posted growth rates way, way in excess of 2.26%. This makes sense, because there was some stockpiling early on in the pandemic and there is now a transfer from foodservice (eating out) to groceries as people are still dining at home more. So, the overall growth rate is very clearly wrong which has an impact on penetration and the whole basis of the calculations. Second, the report suggests that, this year, 10.2% of all grocery sales will be made online. However, the online sales penetrations for grocery at Walmart, Kroger, Target, Costco and others are all well below 10% so far this year. If those giant players, and others like dollar stores where online is minuscule, are not reporting massive penetration rates where does this 10% figure come from? It doesn't stack up against the actual numbers being reported. None of this is to deny that online has grown significantly nor than penetration has increased. Both are true, but the report exaggerates the extent to which this has happened. Given the above two points, the future penetration projections should be disregarded in terms of the absolute numbers. In terms of the application of the forecast, this appears to be a straight line forecast where penetration is going up by around 2 percentage points or so each year. Again, this doesn’t tally with the evidence of this year where, since the peak of lockdown, grocery penetration has actually fallen. It certainly remains nicely elevated over 2019, but it is no longer rising to the extent it was. This makes me highly skeptical about the reliability of the longer-term projections. I would never deny that this is a time of great change for retail. Nor am I a skeptic about digital and technology. However, I see a lot of projections that are really out of kilter from what’s actually happening on the ground and, unfortunately, this is one of them.
  • Posted on: 09/18/2020

    Have multiple rounds of price cuts changed Whole Foods’ high price image?

    No disrespect to Mrs Detroyer, but statistically this isn't true. We gather hundreds of thousands of prices every week as part of our ongoing analysis and in areas like laundry detergent, bottled water, soft drinks, paper products, condiments, and others, Whole Foods is consistently more expensive than rivals. They also have far fewer special offers, which further pushes up the price differential. To be clear this is only for branded products which can be properly compared across retailers.
  • Posted on: 09/18/2020

    Have multiple rounds of price cuts changed Whole Foods’ high price image?

    No, absolutely not. We have done a lot of research on things like price perceptions and Whole Foods still has one of the worst price perceptions of any grocery retailer and, while there has been some improvement, it is very minor. There are a few issues here. The main one is that consumers assess prices based on the entirety of the offer - or their final bill. So while Whole Foods has brought some prices down, especially on essentials, other products are highly priced. While the higher prices may be justified on the grounds of quality, it still means the total spend is high. The second one is that Whole Foods is still more expensive on like-for-like items than Walmart, Target, Kroger and even Amazon. Areas like bottled water, laundry detergent and other things are priced way higher. A lot of consumers notice these thing and feel like Whole Foods is ripping them off. The third is that Whole Foods' whole proposition is not great value for money in my opinion. Service in some stores is sometimes mediocre, the taste of the food is not always great, and some shops are a mess with entrance lobbies converted to fulfillment centers and Amazon Flex workers all over the store. This is not what people expect when they are paying top dollar at a "premium" grocer. In short, Whole Foods has a lot more work to do in sharpening its value credentials.
  • Posted on: 09/18/2020

    Online to make up 21.5 percent of grocery’s sales in five years

    There is no doubt that online grocery will grow. However I am extremely skeptical that penetration will reach 21.5 percent in just five years. First, you cannot look at increased online grocery penetration and shopper numbers which resulted from the pandemic and extrapolate it forward. Not all of the changed habits will stick as the virus abates. Indeed, a lot of habits are already unwinding to some extent. Second, while a lot of shoppers do like online grocery shopping for some things, they find it very hard to do all of their food shopping online. As the research itself points out, that means there is still a preference for physical stores. More advanced online grocery markets, like the U.K., show there are limits to growth because of this. That should not be underestimated when coming up with future projections. And finally, even if the demand were there, there is very little chance that grocery retailers could service such a high level of demand in such a short period of time. The build-out of capacity, the cost to transition to digital, and the impact of reduced margins and a new financial model are just too much to cope with in five years. No grocery retailer I have spoken with is working on having such a high online penetration rate in the medium term.

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