The five top trends for ’09 and how they impact on business
Around the world, people have been shaken into uncertainty by the economic crisis, but there have been reasons for optimism and hope in recent weeks. Looking ahead to 2009, market and consumer intelligence firm Mintel believes consumers will adapt and make the best of the coming year in five major ways.
As a backlash against the fast pace of the modern world, people will try to take greater control of their lives and find pleasure in the simple things. Faced with financial insecurity, shoppers will seek out businesses and products they feel they can trust. And, although they will cut back on spending, people will continue to treat themselves to small luxuries and guilty indulgences, according to Mintel.
“People around the world are feeling insecure and are already looking to re-establish a sense of stability in their lives,” Joan Holleran, director of research at Mintel, advised. “In the coming year, it will be more important than ever for businesses to respond quickly and creatively to changing consumer needs and desires, as we all become more selective in how we spend our money.”
1. Consumers are in control
Over the years, people have become more confident and demanding about how they live their lives and spend their money. Even as a recession hits, they will want to stay in control of their choices, wherever they can.
Consumers will seek out products and services that give them exactly what they want and when they want it, especially as their budgets tighten and the convenience trend continues to gather momentum. And the Internet will be key. It shows people every option available and gives them the power to demand more, while also allowing them to influence others through user reviews and feedback.
What it means for businesses: Manufacturers will have to further update their value offering and respond with products that suit people’s specific needs and lifestyles. “Those companies that give consumers precisely what they want or give them the freedom to customise their purchases will do well. Companies that fail to do this will see consumers walk away,” Joan Holleran said.
In addition, Baby Boomers will be of particular interest to businesses. Companies will move beyond traditional “old age” products and services to ones that embrace the active, healthy lifestyles of many older consumers.
Earlier this year, Australian Food News reported on a trend seen in Europe of ‘pensioner-friendly’ supermarkets, which have been well received by customers at Kaiser’s in Germany. Tesco, the UK’s largest retailer, recently sent some customers over to test the German format and appears likely to trial Britain’s first pensioner-friendly supermarket. Such initiatives are indicative of the growing business interest in attracting the lucrative Baby Boomer demographic, and likely to be a sign of things to come.
2. Simplify and purify
Faced with fast-paced modern life, many people will continue to look for convenience and simplicity. And as people take control of their everyday lives, they will also demand that companies communicate with them honestly and openly. From understandable ingredients to clear company practices, consumers will want complete transparency when it comes to the products they buy. Nostalgic skills such as cooking at home, sewing and gardening will become increasingly popular, Mintel suggests. As an added benefit, these home-based activities will also help people stretch their budgets further.
What it means for businesses: As consumers look for more authentic, easy-to-understand products, companies will market their brands in a simpler, more direct way. Fresh, clean and pure will become essential values, as manufacturers focus on clear ingredient labels and product positioning. “Simplicity and convenience are the ultimate goals. Brands that can communicate what they really stand for and show how they can make life easier will earn consumers’ trust and loyalty,” Ms Holleran noted.
Additionally, with more people “cocooning” in their homes to save money, companies are provided with an opportunity to create better products for dining, relaxing and entertaining at home. For manufacturers this may mean updating the product range, while for supermarkets it could dictate an improved array of options for the consumer to choose from. There is also the potential for manufacturers and retailers to work together to come up with an area within the store that showcases the excitement and taste a home-cooked meal can produce.
3. Rebuilding trust
Today’s consumers have high standards and will demand value for money, as well as consistently high levels of quality, safety and service. Crumbling economic markets and food safety fears have fuelled an era of doubt and insecurity. And so, in the coming year, people will seek out trusting, open relationships wherever they can. People will increasingly want to know more about the products they buy – from where they were sourced to how they were manufactured. Because of this, people will cling to the long-standing, nostalgic brands they know and love, looking for products with a real sense of familiarity.
What it means for businesses: For many companies, especially those in the finance sector and any food companies that have been liked to food safety scandals, the road to rebuilding trust with consumers will be long and difficult. But it will be a priority.
Manufacturers will need to back up their words with actions and conduct business in a more open, honest way. Reassuring consumers that they are acting in the customers’ best interest should become a primary concern for businesses, if it is not already. Also, as companies see shoppers sticking to already-familiar products, long-standing brands will move into new markets to exploit their position as trustworthy companies, according to Mintel.
4. Trading down (but a little trading up too)
As purse strings tighten, consumers will look for every possible way to make their money stretch further. For example, people might trade down to cheaper own label brands, eat out less or simply choose not to update their wardrobes. But everyone will still crave a little treat now and again. The result? Shoppers will mostly trade down to budget-friendly solutions to save money. But occasionally, they will also need to indulge in small, affordable luxuries, like premium chocolate.
What it means for businesses: As consumers split between the low and high end of the market, manufacturers will invariably follow suit. Many companies will start to focus on value brands, but there will still be room for products that bring a little luxury to the everyday. A number of food manufacturers have this year reported that a focus on value premium products has served them well, while some of the best performed brands over the past year had benefitted from premiumisation.
“The middle market will increasingly be squeezed and is going to have to prove its worth, when faced with competition from newly improved basic lines,” Ms Holleran said. Beyond this, many companies will position their products as a more affordable alternative to going out. For example, Mintel anticipates an increased number of premium ready meals that give a restaurant experience at home.
5. Playfulness, lightening the mood
In tougher times, people not only crave life’s little luxuries, they also need to enjoy themselves. Small playful distractions such as fun-to-eat food or interactive shops will become increasingly popular as people look to let their hair down and have some fun.
What it means for businesses: Companies will focus on products and experiences that are light-hearted, and those that offer real entertainment will have a significant competitive advantage. Beyond this, manufacturers will launch products specifically designed to enhance people’s moods in unique ways. From food and beauty to household cleaners, Mintel expects to see a widening range of products that soothe, energise or simply lift the spirits.
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