A year can flash by in an instant and 2018 was no exception. Last year we saw exciting tech emerge, mergers, rises in corporate responsibility and changes in our eating habits. It has been a year of transition as companies have worked on battling a struggling market with digital innovations. 2019 is sure to have its own unique challenges and victories that will be sure to prove that it’s never a dull day in FMCG.
As we look at what’s to come in the next 12 months, we’ll also review some of the lessons learnt from 2018.
Blurring the lines between physical and online
It’s been a tough time for retailers and suppliers alike; customer footfall has declined and higher costs have caused more than a few major casualties on the high street. Even Black Friday produced mixed results, footfall was down by 3.6% but on the upside online sales were strong; the Office for National Statistics found that online sales exceeded 20% of spending for the first time¹. Location intelligence company Loqate found that 56% of all online transactions on Black Friday were made via a smartphone².
This trend looks to continue in 2019 as consumers want to shop on their terms, not the retailer’s. With overall connectivity increasing, consumers would prefer to purchase from the comfort of their own home compared to queueing up in busy shops carrying bags of shopping around in their hunt for bargains.
One way to combat the consumer’s aversion to the high street is improving the customer experience. People are looking for a unique and personalised experience when they shop. We have seen companies like Amazon introduce cashless stores, using the best of both the physical store and digital technology. The latest partnership to try out this blend of bricks and mortar with digital is between Microsoft and Kroger in the US. Digital shelf displays will update the prices, showing the latest offers, with symbols flashing up to help direct shoppers to the correct items.
Online shopping is on the rise and in 2019 one thing to look out for is unattended delivery. This has been trialled in 2018 and looks to be a useful service in the near future. It helps tackle one of the main drawbacks of online shopping; waiting at home for the delivery of your purchase. This could be a game changer, as long as companies can get around the trust hurdle and could certainly help ecommerces rise to the top. After successful trials in 2018, we may well be seeing more automation with drone and robot delivery services.
A HEALTHY PLANET FOR A HAPPY CUSTOMER
Weather was a big talking point in 2018; heavy snowfalls earlier in the year brought chaos and during the summer it became so hot that the british public started hoping for rain. As well as having an impact on retailers, the weather has also highlighted the effects on the environment that consumerism is having. As a result of this consumers believe companies should be doing more to tackle these issues. In a study conducted by Nielsen they found that 81% of people feel strongly that companies should help to improve the environment³. Many new start-ups and influencer brands have started this trend, championing causes and highlighting the importance of social and environmental responsibility, ingraining it in their brand.
This coming year we will see more companies taking these matters seriously, or they may risk losing loyal customers. Nielsen’s survey also found that 73% of consumers would be willing to change their consumption habits to reduce environmental impact; 46% would be willing to forgo brands in preference of more eco-friendly products.
Although this isn’t a new idea, the subject has come to the forefront of many people’s consciousness. We’ve recently seen bans on single use plastics and who could forget the Iceland Rang-tan Christmas advert? It’s safe to expect that there will be plenty more to come around environmental issues in 2019.
A HEALTHY START
For many the new year means a post-Christmas diet, and for more people than ever that might mean taking part in Veganuary. 2018 saw records broken with over 160,000 people taking part to follow a vegan diet for the month, 2019 predictions expect to see that number almost doubled⁴.
Clean living is turning out to be more than a fad for millennials. Consumer data shows that the nation is pursuing healthier eating habits, which is influencing the FMCG industry. Recent Nielsen data⁵ found that meat-free products fuelled an extra £41.9m spend on chilled ready meals in 2018. Sales are also up in the dairy-free and veg categories. Meat volumes, on the other hand, were down 0.3%. A number of retailers have now introduced meat alternative ranges with more sure to follow. Premium retailer M&S are the latest to have launched a vegan range and considering their influence in the market, other retailers are sure to follow.
Sports nutrition was the fastest growing category by percentage last year, with many of our less healthy habits like smoking proving to be less popular. Rises in the soft drinks markets may well have been due to the soft drink levy introduced in April. With alcohol consumers are paying more attention to quality and experience over quantity. Which points towards the larger picture of prioritising experience and taste over things like the price.
So for brands in 2019 the shift certainly seems to be in favour of cutting out sugar and providing healthier options on the whole. When it comes to indulgence, it may less little and often, cheap and cheerful, but more of an occasional, high quality affair.
WHAT CAN WE EXPECT FOR 2019?
There may still be many unknown challenges to face for retailers and suppliers in 2019, but these trends look to be a mainstay for a while to come. With less spending power in uncertain times people are more aware of where their money is going, so getting the experience right, may be the key in brand loyalty for 2019.
One thing remains certain; the power is in the hands of the consumer. As we have learnt from spending habits last year, consumers are calling the shots, spending money on the products and lifestyle they care most about. Brands and retailers will do well to respond in kind.