Global retail trend predictions to address competitive pressures and new business models
Global consumables retail leader and Private Brand pioneer Daymon Worldwide has released its seven ‘Global Retail Trends Predictions for 2016’ to help retailers address widespread tectonic shifts caused by competitive pressures from both high and low-end retailers, and a new wave of business models.
“This year we have seen a number of high-profile bankruptcies and outright closings among once-venerable companies. The pressure to perform is relentless, and every stumble is immediately punished. Amidst a cacophony of change in the retail industry, Daymon has identified seven key trends that smart business leaders must factor into their thinking. Anticipating these changes and acting on them in 2016 are critical to success, if not survival,” says Jim Holbrook, CEO, Daymon Worldwide.
According to Holbrook, Daymon Worldwide’s global trend predictions will help retailer and supplier partners to better track and respond to future consumer needs and preferences. Each trend was identified through the Global TrendWheel, TM Daymon’s proprietary social, economic and business-scanning tool that tracks 54 consumer microtrends across seven global megatrends.
Daymon Worldwide’s Global Retail Trend Predictions for 2016:
1. Retailers leapfrog foodservice: As the fast food industry struggles to reinvent itself and respond to changing consumer preferences, traditional food retailers from grocery and convenience stores to specialty outfits will leapfrog foodservice, upping the proposition in health, convenience and experience with competitive offerings, such as hyper-personalised meal and snack solutions, customised nutrition programmes and “secret” offerings and promotions for exclusive, in-the-know consumers.
2. Retailers use balance as a strategy: In our ‘Always On’ culture, consumers are counteracting technology overload and unlimited media content by increasingly looking for balance. They are plugging into their lives, experiences and moments — not only their devices.
It’s becoming increasingly popular to focus on extremes, such as spending a Saturday watching a 12-hour TV marathon and then running an actual marathon on Sunday. Retailers have recognised this shift and are delivering on balance, such as the rise of indulgent mini-desserts or bite-sized comfort foods, and creating programmes and promotions tailored to consumers’ extreme lifestyles.
3. The digitally enabled kitchen is almost here: Consumers have embraced digital in all aspects of their life, including shopping and cooking. Digital’s role will become elevated in cooking, automating much of what’s manually done today (e.g. chopping and measuring) and allowing consumers to make restaurant-quality dishes at home with ease. In 2016, we’ll begin to see digital moving from being just a resource to offering sous chef expertise through app-controlled, sensor-enabled appliances, full customisation through 3-D printing and connected kitchens. While consumers will not fully embrace this trend next year, retailers will get ahead of it in planning and development, such as by partnering with appliance companies to understand the ramifications of connected kitchen spaces and new tech-enhanced gadgets on products.
4. Retailers shift from value to values: As consumers’ values continue to change, buying ‘stuff’ for its own sake is less important in their purchase decisions. Across age groups, consumers are asking retailers to align with their core values including functionality, sustainability, diversity and purpose. Retail winners will find ways to demonstrate purposeful purchasing to consumers, from mission-based programmes and messaging to more sustainable product development. They will also more closely align with consumers’ changing perspectives, such as by embracing gender-neutral retailing or reframing messaging to align with consumers’ desire for reality and vulnerability, not perfection.
5. The badge in badge value gets redefined: As consumers become more knowledgeable about food and where it comes from, they rely less on brand-driven assertions of premium and quality. New emerging quality markers, such as desire for authentic, regionally-specific and locally-sourced and more diversified culinary attributes like new flavour distinctions, textures and production techniques, will drive retailers to rethink signature brand offerings to better align with redefined consumer expectations. Private brands in particular will develop new platforms and brands tied to new badge values and quality markers. Retailers will also use strategic partnerships to buy or borrow ‘new badge’ equity.
As interest in ethical eating grows, expect to see changes in food development and offerings such as vegetable-centric platforms, nose-to-tail and root-to-stem product development, and even food waste being leveraged as an innovation platform.
6. Retail moves from transaction to interaction: With so many places to shop and consumers moving online for everyday purchases, the physical store must be redefined. Retailers will transform stores to better connect with consumers, such as designing lifestyle spaces to educate and inspire, providing hybrid services (such as food and beauty), offering sensorial experiences (scent, sight, sound, taste, touch) to bring store concepts and products to life, sometimes in 3-D. They also will develop beta stores that encourage trial and error and two-way relationships and dialogues with the consumers they want to reach.
7. Discounters become the primary store: Discounters, big and small, will continue their global expansion and morph into primary stores, expanding their organic offerings, fresh bakery and perishables to capture more mainstream consumers. Each will look to trump the next, moving faster and faster to grab share of wallet. With an elevated shopping experience and promise of lowest prices, we will start to see consumers using discounters as the place they shop first; then cherry-picking across other retail channels, both high and low, to find specific products and services.
“In our drastically shifting, fragmented retail world, future retail success is based on creating high value, high impact experiences for core consumers. It’s all about keeping your loyal shoppers coming back to you versus the competition, and inspiring them to spend more when they do,” says Virginia Morris, global VP consumer and innovation strategy, Daymon Worldwide.