Cultural Shifts Drive Consumer and Retail ChangeMay 1, 2017
The world’s population is changing—not just in numbers, but also in cultures, attitudes, values and behaviors. This evolution is being driven by multiple factors, including shifts in economic growth, population distribution and household composition. All combine to shape the four forces redefining retail and to spur the growth of new consumer markets that retailers and brands must account for in order to remain relevant.
To help retailers better understand these shifts, Daymon has identified a series of key microtrends that underlie the overarching need for differentiated retail strategies, including the redefinition of the modern family, the rise of urbanization and the cultural mosaic born out of our increasingly global society.
“There’s no one picture of a household anymore. What we call ‘the modern family’ reflects changing household compositions, such as roommates, same-sex couples, people with pets and multiple generations living together,” explains Dave Harvey, Vice President of Thought Leadership for Daymon.
These varied household compositions have a marked impact on how consumers buy and underscore the idea that one size no longer fits all. Leading retailers are diversifying their offerings to include a range of both individual and value-size offerings, and innovating around new constructs—for example, marketing to “pet parents” who, like parents of children, want to offer their furry wards the very best they can.
Rising urbanization is also affecting how and what shoppers buy. According to the World Bank, more than half of the world’s population now lives in urban areas—and nearly 70 percent are expected to by 2050. In response, “smaller footprints are overtaking hypermarkets, convenience is becoming more fresh and we’re seeing more demand for individual or smaller size products,” says Harvey.
Retailers in Asian and European markets are amongst the leaders in innovating for the growing urban population. For example, global grocery retailer Carrefour has been expanding its footprint of small-format stores in both China and France—offering a curated selection of fresh, ready-to-eat and household items in stores that average 2,500-3,500 square feet (less than a tenth the size of the typical supermarket). E-mart, South Korea’s largest retailer, has developed a line of single-serving, prewrapped fresh vegetables and is expanding its frozen offerings to provide convenience and longer shelf life for smaller households.
As more people live together in urban areas, populations are also becoming increasingly diverse, creating a cultural mosaic of experiences. One of the most notable results of this is the rise in the variety of cuisines consumers are eating. Once largely Asian eating styles such as cooking with fire and noodle bowls are showing up in more European and American restaurants—and new flavors are finding their way into mainstream products, such as Korean gochujang, a fermented chili paste touted as the next sriracha.
“The one thing that’s true for all consumers today is that they have different needs, and they’re demanding those needs be met,” says Nicole Peranick, Director of Culinary Thought Leadership for Daymon. “To remain competitive, retailers and brands must break away from traditional demographic and category definitions and shift their focus to lifestyle needs, developing products and services that solve for those needs as they’re emerging.”
Stay tuned throughout the year for more on the four forces that are shaping retail in 2017:
- Shopper Participation—Consumers increasingly desire to influence not only their own choices, but also broader positive change.
- Destination Retailing—Shoppers want tailored solutions that lead to experiences, not just transaction.
- Precision Wellness—Thanks to wearable activity trackers, personalized DNA profiling and other new wellness services, consumer self-knowledge is expanding dramatically.
- Redefinition of Convenience—In our increasingly digitized, urbanized and always-on world, the definition of “convenience” is rapidly changing.
For questions about retail trends identified by Daymon, contact Dave Harvey, Daymon Vice President of Thought Leadership at email@example.com.