Retail pundits predict 2019 and beyond
Alexa, tell me the future! (source: Amazon)
"What do you see as the most significant or exciting development in retailing/fmcg manufacturing and the most important challenge for the future?"
Will these gurus continue to stress the disruption caused to the industry by the increasing digitalisation of our society? Will they despair about Brexit and a world still oppressed by dirty old men? Will they worry about the amount of (micro)-plastic in our oceans and the threat of global warming? Or will their answers just surprise us?
Looking into the Seeds of Time
Professor Joshua Bamfield, Director, Centre for Retail Research, Norwich, UK:
Joshua Bamfield: "Mobile-led online retailing is old hat" (photo: Centre for Retail Research)
The most important challenge facing bricks & mortar retailers in the UK is to survive and thrive another year of suicidal price-cutting, the charms of an unplanned Brexit, and their heavy operating costs, partly caused by the dependence of successive governments on tax revenues from mature store-based retail businesses."
Dagmar Bottenbruch, Angel Investor & Consultant, Berlin:
Dagmar Bottenbruch: "The word sustainability is now coming back, but filled with meaning" (photo: Bottenbruch)
Most importantly, people are re-evaluating their consumption of 'animal protein'. Not only are more and more people going 100-percent vegetarian or vegan, but more and more people are going flexitarian, i.e., significantly reducing their overall consumption of animal products with meat- or dairy-free days or weeks. Many do it to reduce animal suffering, many to reduce CO², others for their own personal health.
No surprise that there is an amazing number of truly interesting food-tech and ag-tech startups that are working on alternatives from lab-grown meat to a fully comparable 3D-printed meat replacement entirely made from plants. The Israeli startup JetEat looks extremely promising with encouraging tests for printing a steak that compares in texture and taste to a real steak, but is entirely made from plants.
Other trends: a huge focus on digestive health, personalized nutrition, carbohydrate replacement, such as pasta made from seaweed, sugar reduction, countless numbers of new snacks, also incorporating insect proteins and countless new drink alternatives with health 'claims' as well as the uninterrupted introduction of new superfoods. Who would have ever predicted the new golden age of the Brussels sprout..?
It is a true challenge for the consumer who wants to do everything right, but very clearly some of the trends are more than hot air."
Professor Utho Creusen, Program Director DIGITAL LEADERSHIP at Management School St. Gallen, Switzerland:
Utho Creusen: "Artificial Intelligence is going retail" (photo: EditarLr)
The consequences for retail real estate, warehousing/logistics and employee competence will be bigger and faster than anyone expects today. Surprisingly, most retail managers are completely occupied by day-to-day operations and do not even take the time to understand the conditions of digital leadership."
Linda W. Eatherton, Partner, Managing Director Global Food & Beverage, Ketchum, Chicago:
Linda W. Eatherton: "Less is more" (photo: Ketchum)
I predict 2019 will be the Year of Less. The 'clean food' movement, which began a couple years ago, demands that less ingredients and chemicals are used to make food. I see this trend expanding to 'more of less'. Specifically, this means less waste, less packaging, and also, most likely, very distinct calls for less plastic packaging. My observation is that images of discarded plastic packaging mountains may well become the poster child for this this 'Less is More Movement'.
Why? It's compelling and provocative. And, that's what concerned groups and individuals need in order to brew support for the changes they desire.
I have no skin in this game. As a communications counselor to leading food companies, I know quite well that every choice we make in food production AND packaging creates outcomes and consequences that will undeniably leave a portion of the population dissatisfied at best. A total removal of plastics is the kind of battle cry that carries with it equally powerful and potentially unintended consequences.
Message in a bottle (photo: weixx Fotolia)
Consumers have shown us they will make judgements based on emotion and values first; facts later. Their anti-plastic sentiments are growing in social chatter. Much like similar movements in industries ranging from energy to organics, the anti-plastic movement looks to be galvanizing communities of like-minded shoppers driven by higher-values and determined to find solutions. And, today's retailers are looking for that next big opportunity to align with their shoppers' values in-store with curated offerings and featured product displays.
There is every reason to believe we may soon hear of a retailer promoting a 'plastic-free' aisle of products in the very near future. Retailers in the States are locked in a fierce fight to be relevant and are going to continue to aim for hearts over minds to win share of wallet. I predict they may see a 'plastic-free' aisle as branding or leadership opportunity to differentiate."
Dr Kay Hafner, CEO, Hafner & Cie., Digital Change And Strategy GmbH, Essen, Germany:
Kay Hafner: "Food onliners will succeed at the most in five-plus years" (photo: Hafner & Cie)
I am sure that the 'last mile' takes more efforts and excellence than expected, but the food onliners will succeed at the latest in 5+ years, because new logistic tools, self-driving lorries, drones and mobile payment options are underway. The only areas which can remain 'bricks & mortar' are concept, lifestyle and traditional small foodie stores with strong face-to-face communication with customers.
So more than ever physical retail needs clear positioning, and boring mass-merchandise or overloaded shelves and traditional flyer communication are no-gos."
Tim Harrap, Head of Collaboration, Lye Cross Farm, Redhill, Bristol, UK:
Tim Harrap: "Trust is being destroyed" (photo: Harrap)
In the meantime, the platforms march on and cream off profits whilst not adhering to conventional wisdom in how to run a business.
Every man, woman and child seems to have a view on Blockchain technology and how wonderful the future will be. Sad that it comes about to try and deliver trust – because trust has been or is being destroyed. Talk about a Catch 22 situation!
The challenge for the future is going to be the hope and belief that people will improve cultural relations in the 21st century and break the political, financial and economic stranglehold which can so oppress the human spirit. As a digital transformation writer recently wrote, 'work hard to create a culture, not a culture war'."
Ibrahim Ibrahim, Managing Director, Portland Design Associates Ltd, London:
Ibrahim Ibrahim: "Amazon, P&G and Unilever will acquire (more) physical retailers" (photo: Portland)
- We will see more robotics in retail and hospitality with voice control and facial/image recognition technology;
- Amazon will acquire a large retailer in the UK. Marks & Spencer?
- Procter & Gamble and Unilever will acquire more physical retailers;
- Currently unknown Chinese brands will become household names in the West;
- Big Tech will experience tighter regulatory conditions in Europe;
- Facebook's Messenger will be demerged as a separate company and will be developed as a stand-alone 'Conversational Commerce' platform;
- Brands will become more political, see Nike's Colin Kaepernick ads and Procter & Gamble's 'the Talk' video;
- Pure-player retailers will decline, only those who have a physical presence will drive forward, see latest ASOS numbers."
Mag. Uwe W. Klenk, CEO & Founder UK & Partners Group and GlobalSalesPlatform, London/Budapest:
Uwe W. Klenk: "Big data and machine-learning are major disrupters" (photo: Uwe Klenk)
Brands in many categories will slide into commodities due to private label development.
Marketing will move from wide appeal to the broad population towards customer-centricity due to developments in big data.
Store formats will evolve from mere 'stock-the-product' concepts to entertainment and emotional hubs.
Big data and machine-learning are major technological innovations and they will disrupt the way supply chains, sales, marketing and operations evolve in both retailing and the fmcg industry."
Michael Sansolo, Retail Industry Consultant, Washington D.C.:
Michael Sansolo: "Storm clouds are gathering in the U.S." (photo: selfie)
The clouds are coming in many directions starting with the economy. The U.S. has been in a long, but sluggish economic recovery since the Great Recession of 2008, which has meant general improvement in all economic measures including consumer confidence. That period seems to be coming to an end as countless key indicators and worrisome signs, such as burgeoning consumer debt, suggest the world's largest economy is likely to fall into recession sometime soon.
For U.S. retailers a downturn would be especially unwelcome. The past few years have seen the emergence of non-traditional competitors starting with e-commerce giant Amazon, but also including hard discounters like Aldi and Lidl (from Germany) and home-grown threats like Dollar General. Should the economy soften, those discounters will become a much more alluring destination for shoppers, which could create price pressures unlike any the U.S. has seen before.
Lidl joined Aldi in the U.S. last summer, making two German discounters on that side of the Pond (photo: Supermarket News)
Clearly the industry will need to rise to these challenges. From the discounters — if a recession truly comes to pass — companies will need to focus hard on new areas of efficiency and probably a greater reliance on private label to lower market basket prices. And when it comes to e-commerce, those same companies will need to find a way to blend the benefits of online shopping with in-store customer experiences.
Neither path is simple, but the reality is that few other options may be available, and the industry will have to evolve to meet this challenge with the same vigor that resulted from previous non-traditional challenges. No matter what happens, 2019 won't be dull."
Bill Webb, The London College of Fashion Business School, Member of the Ebeltoft Group of Retail Experts:
Bill Webb: "The circular economy will gain acceptance" (photo: Bill Webb)
Rental and subscription models will continue to emerge in many sectors. This will, for example, bring luxury goods within the financial reach of younger customers in China and other emerging markets as authorities clamp down more strongly on counterfeit and illicit product.
Not only will this trend speak to growing concerns about sustainability and environmental protection, but it will facilitate greater resource productivity, reduced inventory levels, more sales at full price and the development of customer databases capable of deep mining."
Julian Wild, Partner, Corporate Finance for Rollits LLP, Hull, UK:
Julian Wild: "A dog's Brexit" (photo: Rollits)
For UK food companies with any significant level of imports of raw materials and packaging, as well as a substantial workforce from elsewhere in the EU, these are difficult times.
Ho ho ho: In an exclusive interview with German Retail Blog at Lapland HQ, Santa Klaus expressed his annoyance at the extra paperwork involved with cross-border delivery after Brexit. He says he is seriously thinking of going exclusively online next year... (caricature: Oliver Sebel)
I now discern the plans: Mrs May – runs down the clock to mid-January and tells Parliament it's her deal or no deal in the hope that she can get her one over the line as there isn’t time for an alternative.
Mr Corbyn – resist a no-confidence vote as long as possible (possibly forever) because he knows he can't win one and, if he loses, Labour Conference decided that it has to be a second referendum, which Corbyn definitely doesn't want. So he keeps his head down and watches the Tories tear themselves apart and hopes that at some stage the country so despairs of this Government that it wants a change. He may have a long wait.
In the meantime, sterling goes down the plughole, and Government (totally unprepared) and business spend billions on getting ready for No Deal, which parliament overwhelmingly doesn't want and doesn't expect. Madness."
Carlos Yescas, co-founder & owner of Lactography in Mexico and Program Director of the Oldways Cheese Coalition in the US, Boston:
Carlos Yescas: "Product packaging must provide actionable information for consumers" (photo: Yescas)
So for the past 15 years, consumers have been getting used to seeing 'Bio', 'U.S.D.A. organic', 'Rainforest Alliance', and 'Fair Trade' insignias on commodity products.
However, the new logos really look different. Claims have now expanded to animal welfare, 'certified humane' agricultural practices, 'non-GMO project', and even workers' rights and economic impact – 'B-Corp'. These third-party labels certify the producer's business practices, and consumers are making purchasing decisions based on that information.
However, some of the statements have become confusing and difficult to understand. In the next two to five years, we will see an increase in third-party validation. Here is fertile ground for organizations and governments to translate some of the information on back labels into actionable information for consumers."
A happy, healthy, wealthy and imaginative New Year to all our international readers, and we promise to stay keen in twenty-nineteen (ha ha)...
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