Retailers need to consider seven key trends for 2016

Daymon Worldwide, Stamford, Conn., said it released its seven "Global Retail Trends Predictions for 2016" to help retailers address widespread tectonic shifts caused by competitive pressures from both high- and low-end retailers, and a new wave of business models.

“This year, we have seen a number of high-profile bankruptcies and outright closings among once-venerable companies. The pressure to perform is relentless, and every stumble is immediately punished,” said Daymon Worldwide CEO Jim Holbrook. “Amidst a cacophony of change in the retail industry, Daymon has identified seven key trends that smart business leaders must factor into their thinking. Anticipating these changes and acting on them in 2016 are critical to success, if not survival.”

According to Holbrook, Daymon Worldwide’s global trend predictions will help retailer and supplier partners to better track and respond to future consumer needs and preferences. Each trend was identified through the Global TrendWheel, Daymon Worldwide’s proprietary social, economic and business-scanning tool that tracks 54 consumer microtrends across seven global megatrends. The seven trend predictions for 2016 are:

• Retailers Leapfrog Foodservice. As the fast food industry struggles to reinvent itself and respond to changing consumer preferences, traditional food retailers — from grocery and convenience stores to specialty outfits — will leapfrog foodservice, upping the proposition in health, convenience and experience with competitive offerings such as hyper-personalized meal and snack solutions, customized nutrition programs and “secret” offerings and promotions for exclusive, in-the-know consumers, Daymon Worldwide noted. 
• Retailers Use Balance as a Strategy. In our “always-on” culture, consumers are counteracting technology overload and unlimited media content by increasingly looking for balance, Daymon Worldwide said. They are plugging into their lives, experiences and moments — not only their devices. It’s becoming increasingly popular to focus on extremes; for example, spending a Saturday watching a 12-hour TV marathon and then running an actual marathon on Sunday. Retailers have recognized this shift and are delivering on balance — as seen in the rise of indulgent mini-desserts and bite-sized comfort foods — and creating programs and promotions tailored to consumers’ extreme lifestyles.
• The Digitally Enabled Kitchen is Almost Here. Consumers have embraced digital in all aspects of their life, including shopping and cooking. Digital’s role will become elevated in cooking, automating much of what’s manually done today and allowing consumers to make restaurant-quality dishes at home with ease, Daymon Worldwide said. In 2016, we’ll begin to see digital moving from being just a resource to offering sous chef expertise through app-controlled, sensor-enabled appliances, full customization through 3D printing and connected kitchens. While consumers will not fully embrace this trend next year, retailers will get ahead of it in planning and development such as by partnering with appliance companies to understand the ramifications of connected kitchen spaces and new tech-enhanced gadgets on products.
• Retailers Shift from Value to Values. As consumers’ values continue to change, buying “stuff” for its own sake is less important in their purchase decisions, Daymon Worldwide said. Across age groups, consumers are asking retailers to align with their core values, including functionality, sustainability, diversity and purpose. Retail winners will find ways to demonstrate purposeful purchasing to consumers, from mission-based programs and messaging to more sustainable product development. They will also more closely align with consumers’ changing perspectives — for example, by embracing gender-neutral retailing or reframing messaging to align with consumers’ desire for reality and vulnerability, not perfection. As interest in ethical eating grows, expect to see changes in food development and offerings such as vegetable-centric platforms, nose-to-tail and root-to-stem product development, and even food waste being leveraged as an innovation platform.
• The Badge in Badge Value Gets Redefined. As consumers become more knowledgeable about food and its origin, they rely less on brand-driven assertions of premium and quality. New emerging quality markers such as desire for authentic, regional-specific and locally sourced products — and more diversified culinary attributes such as new flavor distinctions, textures and production techniques — will drive retailers to rethink signature brand offerings to better align with redefined consumer expectations, Daymon Worldwide stated. Private brands, in particular, will develop new platforms and brands tied to new badge values and quality markers. Retailers will also use strategic partnerships to buy or borrow “new badge” equity.
• Retail Moves from Transaction to Interaction. With so many places to shop and consumers moving online for everyday purchases, the physical store must be redefined. Retailers will transform stores to better connect with consumers — for example, designing lifestyle spaces to educate and inspire, providing hybrid services (such as food and beauty), offering sensorial experiences to bring store concepts and products to life, sometimes in 3D. They also will develop beta stores that encourage trial and error and two-way relationships and dialogues with the consumers they want to reach, Daymon Worldwide noted.
• Discounters Become the Primary Store. Discounters, big and small, will continue their global expansion and morph into primary stores, expanding their organic offerings, fresh bakery and perishables to capture more mainstream consumers, Daymon Worldwide predicted. Each will look to trump the next, moving faster and faster to grab share of wallet. We will start to see consumers using discounters as the place they shop first; then cherry-picking across other retail channels, both high and low, to find specific products and services.

“In our drastically shifting, fragmented retail world, future retail success is based on creating high-value, high-impact experiences for core consumers,” said Virginia Morris, global vice president, consumer and innovation strategy, Daymon Worldwide. “It’s all about keeping your loyal shoppers coming back to you versus the competition, and inspiring them to spend more when they do.”