Global Megatrends that are changing shoppers’ expectations
Interview with Andrej Isoski, Commercial Director Middle East, HL Display (HL)
Megatrends are changing shoppers’ expectations around convenience, experience, service and sustainability. Shifts within demographics and lifestyle, such as urbanization, an increasing number of single households and a growing but aging population lead consumers to re-prioritize their time. Furthermore, concerns regarding sustainability and climate change are urging them to reduce their environmental footprint.
A key concern is the reduction of food and packaging waste, which retailers are addressing by offering an increasing assortment of loose merchandising products and taking steps to reduce the use of virgin plastic in the packaging of their products.
As HL has a global reach, can you tell us about the global trends and innovation when it comes to the FMCG industry?
Firstly, retail has to cater to evolving expectations. Retailers and branded goods suppliers are expected to play a key role in the quest for more convenient, inspiring and sustainable experiences.
The merging of online and offline channels allows consumers to shop whenever and wherever they want and puts increasing pressure on physical stores to make the shopping trip worthwhile. To address these shifts, retailers are strengthening their investments in brick-and-mortar stores; in-store cafés and restaurants increasingly blur the lines between grocery retail and restaurants, and categories such as fruit & vegetables gain importance in driving traffic to stores as well as basket size.
Furthermore, advanced data analytics allow for personalized offers and overall more customized shopping experiences. To offset these investments, many retailers look to automatize repetitive tasks related to merchandising and stock-keeping, enabled by technological advancements. This not only leads to more optimized store operations but also has implications on the required qualifications and competencies of store staff.
Secondly, improving sustainability. With sustainability concerns top of mind, retailers and branded goods suppliers are focusing on a number of areas to improve their environmental footprint and help shoppers to live more sustainably.
Organic, natural and locally sourced items are highlighted in more stores, and retailers are investing in tools to improve traceability of products to respond to shoppers’ growing need for information and transparency. Some retailers and brands go a step further, informing shoppers of the carbon emissions of their purchases and providing lower-impact alternatives to help shoppers to make more sustainable choices.
HL conducts numerous market analysis regarding consumers’ needs and demand. What are your recent findings? What the customer of the future want to see and experience?
There are several topics I would like to address. I would like to start with plastic.
Plastic reduction is still one of the most discussed topics even in times of Corona.
The concerns and demands of consumers when it comes to plastics are directed at brands and retailers, with certain industries expected to be particularly receptive.
Many consumers are also prepared to pay more for more environmentally friendly packaging.
In addition to the fundamental concerns of consumers about the planet and the use of alternative packaging materials, this is often a matter of corporate responsibility.
The majority of consumers see it as their duty to take action in the fight against plastic waste.
Brands are more likely to be held responsible for reducing plastic waste and its impact than governments, NGOs or other players.
In a recent study, more than half of surveyed consumers stated that a company’s attitude to sustainability and environmental protection strongly influences their purchasing decision.
Even though attention to plastic waste has declined somewhat this year, consumers are demanding responsibility from brand companies. They must take action to retain their customers because, as the study shows, consumers are now also prepared to accept economic consequences if they can avoid plastic. Food and nutrition in general play an important role in the issue of plastic waste.
During our research we came across the target group LOHAS. It stands for “Lifestyle Of Health & Sustainability”. This is the name of a quite new and very interesting target group for retailers, a growing group of consumers who are interested in the environment, in social justice, health, personal development and a sustainable lifestyle. A special group of people, which is very interesting for retailers and food producers, and those guys want to be addressed in their own way. The Lohas are the consumers of the future. The Lohas much more value transparency, honesty and sustainability. Where does my food come from, what exactly is my food made of and who made it? That’s what they want to know.
You make them happy when you show them your responsibility within the food chain and your respect for the relationship between the retailer and supplier and maybe even nature. Lohas like to try out new products and attach great importance to tackling things in a solution-oriented way. They also show environmental, health and consumer awareness, which is responsible for this generation of consumers preferring products that are conducive to the environment and the climate and, moreover, not under catastrophic social conditions. This generation is also willing to spend more money on this.
Another consumer-relevant topic is “fresh”
Research shows that a high-quality fruit and vegetable offering is an important reason why shoppers choose to shop at a specific store and a quarter of them will switch stores if they are not satisfied with quality and presentation.
Furthermore, fresh produce is proven to drive basket size and allows physical stores a competitive advantage over online retailers as shoppers prefer to see, touch and select their own fruit and vegetables. This preference might be due to the fact that many shoppers do not trust the quality of produce purchased online. Though research urges the importance of an abundantly displayed fruit and vegetable selection, many shoppers are still not satisfied with their local store. Shoppers prefer to personally select their own fresh produce and want an added experience worth their time and effort.
Because when it comes to fruits and vegetables, customers want to touch, feel, smell the products.
76% of shoppers say, they want to buy those products in a brick and mortar store.
44% do not buy fruits and veggies online because they do not trust the product quality.
A high-quality fresh produce display is the number one reason why shoppers will choose a store with many inspired by the sensation, sight and smell.
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