International supermarket research organisation IGD has identified the five food retail trends that will dominate the next twelve months.
Private labels go premium
Retailers have increasingly used their private labels to appeal to a broad range of consumer needs. That is also why they will invest in a premium private label range, offering high quality at affordable prices. IGD innovation analyst, Toby Pickard, has his own view on the matter: “Private label product ranges allow retailers to distinguish themselves in an increasingly complex and competitive retail market. Name brand manufacturers need to make sure their products are superior in order to justify the higher price."
Retailers will become extremely local
Consumers want to buy more local products and that is also why retailers have started selling products that have a limited stock, because they are season-bound and have smaller numbers. This creates a unique, yet temporary product range, which will entice shoppers. It gives consumers more variety, but also creates a complex supply chain, which requires efficiency, collaboration and communication. Shoppers approve the fact that retailers support SMEs.
More effective shipments
Consumers appreciate speed and convenience, which forces retailers to develop new solutions for orders, pick-ups and deliveries. Based on shopping data and artificial intelligence, supermarkets are now trying to anticipate what consumers want even before they know it themselves. Many of these new solutions will lead to a decreased level of interaction between retailers and brands. This in turn requires additional efforts to stand out and connect with consumers. “Retailers probably have to create more value than merely convenience in order to distinguish themselves from their competitors. At the same time, the delivery costs have to remain low”, Pickard said.
Focus on lifestyle
Health and wellness will remain important values for 2018. It is expected that retailers will enlarge their stores’ wellness areas and develop lifestyle-focused formats. They will also offer custom lifestyle choices online, allowing customers to rapidly and easily find the things that can help them to live a healthier lifestyle. Vegetarian, flexitarian, “better for you”, “does not include” and “clean label” are fast-growing segments. Mainstream retailers with an expanded lifestyle product range are also a challenge for the specialty chains: “Whoever is able to rapidly predict, create or react to upcoming lifestyle trends are the actual winners.”
Improved shopping experience
Physical stores have to work harder than ever to get shoppers to their front door. They have to meet the omnichannel shopper’s demands with a new shopping experience that combines online, offline and big data. Pickard predicts retailers to lift the shopping experience with new surprising new products and practical solutions for shoppers that engage with different channels. One such example is Alibaba’s Hema Fresh store network in China. Brands can help retailers to improve the shopping experience, but also have to be ready to meet the online fulfilment demands.