An outlook on global retail 2014
Daymon Worldwide (founded in 1970 with today more than 35000 associates worldwide, and offices located across six continents), an expert company on global retail branding and sourcing recently released its eight 2014 Global Retail Trend Prediction to address “The Year of Retail Contradictions”
The eight challenges and contradictions are:
- Big versus small, the redefinition of the Hypermarket/Supercentre (Megatrend Cultural Ecology), supposedly a notable shift from hypermarket/supercentre to retail landscape with smaller formats prevailing, including dollar stores, convenient superstores, express stores, discounters and small specialty stores. The supercentre will not disappear, but these smaller formats will become real category killers, stealing share from supercenters and mass merchandisers that have triumphed in recent history. All is driven by increasing urbanisation, a rise in smaller households, and consumers’ changing notion of convenience. There will be more pressure on bigger formats in the US and globally to create compelling reasons for shoppers to visit.
- A Sharing Retail Economy (Megatrend Conscious Raising). Consumers have figured out that owning bulky, rarely used items is both expensive and unsustainable, resulting in a growing number of sharing, renting and reusing options at retail that will influence retail concepts and experiences. For example, Rent the Runway allows consumers to rent designer dresses and accessories for short periods of time. Another service, Rentwant, connects users with peers, to rent items not constantly being used. This trend will have significant implications for global retailers in fashion, home improvement and office supply, who must adapt and respond.
- The Muddled Middle (Megatrend Currrent-CY). The middle class is changing, with contrasting implications globally. In the U.S., there is a shrinking middle class, creating an even greater gap between the rich and the poor. Retailers with low price positioning, such as discounters like Aldi, or Dollar Store, will grow along with more premium retailers, and specialty stores with differentiated propositions, like Whole Foods. Retailers without a clear position are at risk of becoming less relevant and losing traction. Consumers are already shopping multiple stores in a high stakes “share of wallet” game,. In emerging markets, by contrast, the middle class is growing with tremendous spending power, presenting new opportunities for retailers and brands.
- The war on obesity escalates (Megatrend Be Well) When childhood obesity rats stopped rising in the U.S. earlier in 2013, it was headline news. Very soon companies and governments begin to take even more aggressive steps to promote healthier diets, from the rise of high quality “cook and assemble” meals to stricter guidelines such as “No GMOs) becoming the cost of entry in retail. Employee wellness programmes also will become the norm. With an increasingly food aware culture, consumers recognise that obesity is the gateway to other illnesses and the soaring cost of healthcare, so this trend will continue to be front an centre in 2014.
- The Kitchen has Left the House (Megatrend Always On). With shopping trips being more mission-based and less about stocking up, grocery stores will become the kitchen themselves. With the continued growth of QSR, snacking as meals and component cooking like heat-and-eat (versus scratch cooking) on the rise, how consumers cook and eat will look very different in 2014, including when and where they do it. Retailers will need an even closer relationship with their customers in order to provide relevant solutions to meet this growing trend.
- Local Becomes “Personal” (Megatrend YOUniverse, All for One). The idea of “locally sourced” products will change from foods and products sourced in the immediate area of each market to offerings available throughout the broader community, city, state and country. It will be more about personal interaction, authentic experiences and interest versus just geography. Increased Internet connectivity helps consumers regularly engage in global conversations about ideas, products and preferences, extending “local” beyond the boundaries of the USDA definition of “less than 400 miles from its origin or within the State in which it was produced” to include strangers from around the world with whom a personal connection is made. Think of concepts like Etsy or Pinterest followers.
- Retailers Amplify Branded Experiences (Megatrend JOYment). The idea of experiential retail is nothing new, but with the amount of cross channel shopping and the projected growth of E-commerce, brick and mortar stores will be forced to provide shoppers with even more unique experiences, and not just in flagship locations. Starting this play out in retail can be seen with Lululemon’s Experience Lab in Vancouver and Anthropologie’s soon to be launched lifestyle village in Devon, Pennsylvania, complete with retail, hotel and foodservice. For grocery, food theatre like cooking demonstrations and sampling must become a greater part of the shopper experience.
- A New Way to Service the Aging Population (Megatrend YOUniverse). The growing aging population is going to have a key impact in many markets, especially in counties like the U.S. and Japan. In 2014, global retailers take a new spin on reaching this demographic by developing products and solutions to help them maintain their active lifestyles. Think leisure travel, fitness centres, and classes for both life enrichment and fact sharing. Many global retailers are already starting to meet the needs of aging consumers, with more products, services and in-store assistance such as slower escalators and ergonomically friendly shopping carts, etc. The Baby Boomer generation views the “Golden Years” as a time of opportunity, renewal and self-actualisation, and they don’t want to be considered “old people.”
Daymon Worldwide is the only full service global Private Brand and Consumer Interactions expert and it provides currently retail branding and sourcing expertise to more than 100 major retailers and 5900 manufacturers in 49 countries. Damon teams work directly and collaboratively with the world’s leading suppliers and retailers to create and market differentiated brands in the marketplace that deliver exceptional value and improve people’s lives. It actually handles more than 1700 brands and approximately 165000 individual SKUs globally.
Last December, Daymon Worldwide and the Hartman Group, a leading consumer-centric research and consulting firm providing unique strategic insights to the retail industry, announced that they are forming a strategic alliance that will deliver game-changing, long-term insights to C-Suite executives in the food manufacturing and retailing sectors.