Retail, shopping & leisure

Supermarket trends for 2010

What’s in store in 2010? According to a report by Datamonitor, a research firm, the following trends will make an impact on supermarket shelves over the next year.

1. Free range
Animal rights issues are starting to take centre-stage in many countries. For example, in the UK there has been a campaign to promote the welfare of chickens for some years but the profile of the campaign is growing significantly. Free-range products (pork, lamb, beef, chicken and even fish) and free-range claims are expected to follow in the footsteps of organics but personally I’d expect the level of cynicism surrounding some of these products and claims to increase also.

2. Meat flavoured snacks
I fondly remember working with Unilever in the late 1980s trying to persuade people to eat a meat bar that was a savoury cross between a Mars bar and a Yorkie bar. Well it looks like people are still trying. In the US there has been a flurry of product launches ranging from Man Bait (a meat flavoured lollipop) to Drak Bacon Bars.

3. Fantastic plastic
New forms of biodegradable plastic that decay in years rather than centuries are starting to appear on supermarket shelves. As you might expect, the bottled water market is at the centre of this Earth-friendly and associated purity trends. Expect to see more cellulose-based bio-plastics, ‘endless recycling’ eco-bottles, nano-reinforced plastics and carbon and water labelling on consumer packed goods.

4. Skincare you can wear
The idea of skincare that you can wear (or eat) isn’t new but we are seeing more examples. For example, SunSoul is a sun-activated clothing brand from Canada.

5. More masculine drinks
Red Bull helped to carved out the energy drinks sector more than a decade ago but new energy, functional and especially male ‘muscle’ drinks are now starting to appear. A good example is Muscle Milk in the US, a protein-enhanced exercise recovery drink. Expect to see more cross-overs between muscle drinks and supplements and standard energy drinks.

6. Superfruits
If there’s one area of the food industry that imitates fashion it’s surely ‘superfruits’. We’ve had Goji berries and now it’s the turn of even more obscure fruits ranging from Baobab and Borojo to Maqui and Yumberry. Personally, I’d put my money on Yumberries from China.

7. Less is more
The health and well-being trend is still in full swing in supermarkets so manufacturers are seeking out new ways to say ‘good for you’. One way is to take a knife to the long list of ingredients usually found in processed foods. Haagen Daz 5 Ice Cream is an early example.

8. Bamboo everything
Fast-growing bamboo is rapidly becoming the ingredient (or material) of choice for eco-conscious companies keen to do their bit for sustainability. Bamboo has yet to make it into a drink (as far as I’m aware) but it has shown up inside laptops, sponges, paper plates, baby wipes and cosmetics. Bamboo nappies anyone?

9. Relaxation shots
The single (quick) shot format has existed in the drinks industry for some time, especially in the diary drinks sector. The latest trend is quick shots to slow you down. Examples include LR Liquid Relaxx (Netherlands) and Fancl Suyarin (Japan). Some of these shots are intended to slow you down while other are supposed to send you off to sleep. Let’s hope people don’t get confused between the ones that wake you up and those that send you to sleep, especially while driving!

10. Gluten free
Food allergies are growing and so too are products aimed at people with serious medical conditions right down to those with chronic anxiety sickness.

Multi-channel Retail

I’ve been ploughing though a serious of rather dull retail reports recently. One that caught my eye was from Deloitte. ‘Reinventing Retail: A Multi-channel Transformation’ looks at multi-channel retail and predicts that by the year 2012
cross-channel shopping will be increase from 20% of sales in 2007 to 38% in 2012 (Source: Forrester). Clearly, establishing and integrating new channels is a logistical headache but consumers increasingly expect to be able to buy things anytime, any place and anyhow they choose. For the uninitiated, multi-channel retail is about shifting focus away from the store – meaning that stores, online and call-centres are all singing from the same hymn sheet. But it’s not simply about technology; it’s also about operations and overall organization, because if a customer has a bad experience in one area there is an increasing assumption that the experience will be bad elsewhere. This slightly smacks of faddish buzzwords in the sense that it’s becoming a hugely fashionable subject, but that’s isn’t to say that retailers shouldn’t take it seriously.

The retail recovery

Another retail report from Deloitte in the US is focused on what’s likely to happen (primarily in the US) once the green shots of recovery start growing. The key message of the report is that this time things are different. Consumers have been startled by the downturn and will therefore remain restrained for some time to come. Purchasing will be more considered and value will remain an important part of any buying decision. Fear will soon be replaced by caution. Asset values within retail will re-set and credit will be available once again (both to retailers and consumers). However, I disagree with Deloitee when they say, ‘Retailers will find … a consumer with significantly changed values and priorities’. I’m not so sure about this. I think it’s currently true that consumers are looking for simplicity, certainty and long-term value, but I’m not sure how long this will last. What I do agree with is that there will be a continued shakeout in the retail sector with a few players being taken out by M&A activity, or going bust, and this will result in fewer players. I also agree that many retailers have been so focused on short-term cost-cutting over the past couple of years that they have neglected longer-term strategic issues and innovation. I also wholeheartedly agree with the analysis that debt has been redistributed to the advantage of corporations over governments and households and that this will have long-term impacts.

Other key outtakes from the report are:

1. Volatility is the new normal. The potential for uncertainty and volatility has risen. Expect significant volatility in currency rates, interest rates and raw materials.

2. It seems that unless there is another downturn, energy costs will rise. If oil becomes expensive (which I think it will) this will have important implications, not only on transport and logistics but also on the cost of packaging, food and so on. As a result, sustainability and energy efficiency will remain centre-stage.

3. Emerging economies. It looks like the BRIC or CHIME nations will come out of the GFC stronger than many other parts of the world, which links back to M&A in the retail sector.

4. Inflationary pressure. This is likely to come back with a vengeance due to surging commodity costs and pent-up demand. Everything, more or less, will be more expensive in the future.

5. Mobile retail. Shopping via a mobile phone is about to take off.

Broadcast sharing

Just spotted on Springwise (www.springwise.com) is an extension of the social shopping idea (or the shopping 2.0 trend) whereby online shopping becomes a collective and, to some extent, a real-time activity. Blippy (www.blippy.com) is like Twitter on steroids. Basically it’s a way for people to broadcast to anyone that’s listening what they have just bought. Individuals can follow one another’s shopping sprees and even post comments on other people’s purchases. Purchases can be published in real time, either from specific vendor websites such as Amazon or via specific credit cards or bank accounts. Personally I think this idea stinks and the privacy implications make my head spin. Nevertheless, it’s a logical extension of sites such as Twitter and Facebook and I can see how comparing notes on certain products might make sense. Overall, though, something to interest advertisers and teens more than anyone else.