It’s essential for retailers to track trends and work out how they can potentially impact business in a positive way, so we have identified four key retail trends for the coming years, and how you can make the most of them.
In the midst of a challenging global climate, with inflation growing along with issues with supply and demand across a number of sectors, ensuring your business is in the most secure position possible is crucial. This looks different for every sector, but for retailers it usually means focusing on the essentials, and helping consumers navigate difficult periods as easily as possible.
There are a few different actions that retailers can take in order to attract more shoppers while improving overall resilience.
First, private labels can help to improve profit margins while helping consumers cut costs. In challenging periods, sales of private labels tend to grow, so why not facilitate this by adding more essentials to the range and increasing your focus on them both in store and online with innovative packaging?
Second, manage expectations. Everyone is aware of supply chain difficulties, but it helps to be honest and upfront about them. That way, consumers know what to expect, and when they can expect a return to normal.
Third, focus on value. It’s not necessarily about being the cheapest option in challenging times, but more about offering the most for the money. Consumers still prioritise factors like sustainability and quality, it just needs to be balanced more with cost.
“We see consumers moving to the best products they can buy with the money that have,” explains Javier Moreno, Channel Manager for Tetra Pak. “The product proposition needs to be based on value and benefits for the price paid, so not offering the cheapest, but offering the best value. That’s one way to attract more consumers and grow your business resilience.”
Brands are taking different approaches to shore up business – some are investing more in omnichannel, others are freezing prices on essentials and choosing more sustainable packaging, and some are even visibly cutting down on energy use by shutting down lights in an effort to empathise with people and promote responsibility. Retailers must be agile, as this will help deal with unpredictability in a stable, measured and proactive way.
Ecommerce is growing consistently, and has been for many years. Many consumers are now digital natives, or at least extremely comfortable on any digital platform, and online experiences are very much a part of daily life. However, when it comes to retail, the brick-and-mortar experience is very much alive and well. In fact, it’s clear that an effective omnichannel approach is not only desirable, but in many cases, essential, as 80% of shoppers say they use their phones to look up products while in store, and 64% say they prefer to shop with brands that have both a strong digital and physical presence.
The growth of in-store technology is helping retailers to blur the line between physical and digital experiences, while developments on the digital side are impacting the in-store journey. The two things are no longer separate, linear experiences, but all part of the same journey for the consumer. So how can retailers make the most of this new reality?
“Brands and retailers are trying to be as close as possible to the consumer,” says Javier. “They need to be able to develop a full understanding in order to offer the best omnichannel experience, and the way to do this is to create engagement through interaction. There are really two key things to aim for with this – consistency and uniqueness. Consistency meaning that wherever the consumer meets the retailer, they can feel it’s part of the same, integrated experience, and uniqueness meaning that the communication or functionality is designed with the specific platform and consumer in mind.”
The best omnichannel approaches are typically the most flexible, frictionless, and the ones that are ready to meet consumers wherever they are. This can look different for every retailer, as some explore things like drone delivery or online ordering for store pick up, and others implement functionality in store which offers digital recommendations based on purchases done on site. Many are using packaging to enhance personal digital experiences with QR codes, while also selecting different containers to help products stand out on shelves while feeling more modern. The key is finding out what your customers are looking for, and offering the best version of that experience.
Online marketplaces have become the go-to destination for consumers, serving as digital shopping malls that cater to almost every need. They’re seen as essential, especially for those that are time-poor, as there are thousands upon thousands of products at a single destination. This is why they’re set to be the fastest growing retail channel over the next five years.
One key element of these marketplaces is to allow third parties to set up their own digital shopfronts and sell their goods on the platform, and the best marketplaces will ensure the experience remains consistent and smooth, while also offering benefits like loyalty programs and seamless payments.
What does this mean for retailers? Many are launching their own food marketplaces which are designed to complement existing online functionality, as well as offering the widest possible range. This helps to ensure that they can get everything they need in one place, so then it becomes essential to be able to offer the right products to the right consumers, while also ensuring the supply chain and distribution doesn’t become overly complex for the retailer.
“We see a lot of retailers also dedicating physical space to handle the logistics of their ecommerce orders,” explains Javier. “So we see digital players investing in physical stores, and traditional physical retailers investing more in digital infrastructure and online experiences. There will be an increasing demand for packaging that is ecommerce ready too, and that’s where retailers can stand out with their own branded goods.”
Retailers can certainly take inspiration from marketplaces, but with a combination of owned brands and access to data and trends from physical stores, it’s possible to shape the marketplace according to consumer wants and needs. This will include a strong omnichannel experience, and a solid ecosystem which the consumer benefits from being a part of.
This is a trend that, compared to the others, is still in relatively early stages, but it’s showing signs of growth and is likely to be a competitive factor in years to come. As highlighted with the growth of omnichannel, consumers are becoming more and more digital. In conjunction with this, we also see the emergence of the metaverse and other VR/AR (virtual reality/augmented reality) experiences. So how will this impact retailers, and what can you do to keep up with the trend?
At this stage, it’s about being present in these spaces while offering relevant experiences. So retailers can host events, or build virtual stores in digital spaces, and offer VR and AR experiences that are memorable for the user while also helping to generate revenue. As it’s still in the early stages, we are likely to see a lot of experimentation in this space, and some are already finding interesting angles and collaborations with online games that are designed to build a presence in the digital world.
Social commerce is also growing rapidly, as retailers become more comfortable with leveraging the specific benefits of each social channel. In-app purchases within platforms like TikTok are becoming more common, and are more targeted at tomorrow’s consumers who are more likely to be open to virtual product discovery.
“If there’s enough traction, it’s likely to continue to grow as the technology becomes more accessible,” adds Javier. “Limitations could gradually disappear, and as a result the number of users may continue to grow. Then it becomes more about being relevant while educating your consumers.”
Learning what works at this stage will be a great benefit in the future, as you can establish yourself early and become known in this new environment. To do this, it’s important to consider factors like packaging innovation – what will stand out in a digital space, and what will work on a digital shelf – and partnerships – how can you, as a retailer, work alongside established experiences to appeal to more consumers?
For retailers, it’s essential to stay relevant while meeting the consumers where they want to be. By analysing trends and figuring out how you can leverage them within your own business, you can stand out from the competition while offering your customers something truly unique and valuable.
All research has been carried out by Tetra Pak® for Trendipedia 2023, and has been gathered from a variety of verified sources.