CHICAGO -- The retail landscape is on turbo drive. The past few months have brought an onslaught of industry-changing events, such as the arrival of Amazon's frictionless stores, the emergence of robots and an election that may alter the future of fuel, wages, marijuana and more.
- Click here to read an original version of this story, which appeared in CSP's sister publication, Winsight Grocery Business.
In light of these events, full-service sales and marketing agency Acosta, Jacksonville, Fla., has revealed its top predictions that will mold the retail space in 2019.
Here are 11 trends that will shape retail next year, according to Acosta. ...
1. Rising prices
In the year ahead, price will be top of mind for both manufacturers and retailers, Acosta predicts, with rising transportation and commodity costs forcing manufacturers to increase their prices. In 2019, retail food-at-home prices are expected to rise between 1%-2%, according to the U.S. Department of Agriculture. Retailers will be fiercely analyzing price inflation to stay competitive in a fragmenting retail environment, Acosta said.
2. Frozen-food revival
After several years of decline due to the rising prominence of fresh foods, manufacturers are drawing shoppers back to the frozen food category with better-for-you, clean-label and higher-quality products that appeal to shoppers’ needs. With 99% household penetration, according to a Packaged Facts report, frozen foods are ample in opportunity, and new healthy and convenient innovations in exciting flavors and varieties are helping boost sales.
3. Expansion of e-commerce
Following Amazon’s acquisition of Whole Foods, grocery e-commerce has never been more crucial, and brick-and-mortar operators will continue to expand their services in an effort to catch up, Acosta said. Retailers are increasingly teaming up with third-party players such as GoPuff to broaden their reach and provide fast, convenient and affordable delivery, while Acosta predicts that online retailers will continue to strategically move into brick-and-mortar spaces or partner with established retailers to expand their brand’s reach. Click-and-collect will also continue to emerge as retailers refine their implementation, Acosta said.
4. In-store shopping experience
With the rise of e-commerce, retailers are striving to maintain foot traffic by reinventing the in-store shopping experience to be more personalized and interactive. Convenience, the ability to browse easily and sample products, and immediacy will continue to be the key draws, Acosta said. Take York, Pa.-based Rutter's, which earlier this year debuted wine-tasting and food pairings at various locations.
Other Acosta 2019 predictions for in-store shopping experience upgrades include:
- Prepared foods and dedicated eating spaces.
- Enhanced department services.
- Individualization of experience.
- Sampling, education and entertainment.
- Integration with smartphones, including deals, navigation, checkout and personalized offers.
- Possible advances in mobile play.
6. Demand for delivery
As home delivery expands to include prepared foods and complete meals, Acosta predicts consumers will be cooking from scratch less frequently, signaling the need for retailers to change the development of infrastructure of meal prep and additional delivery logistics, such as inventory optimization.
E-commerce and home delivery demands create challenges on trucking and delivery networks and the infrastructure they depend on, Acosta said, with cardboard and other packaging suppliers and packaging waste compounding those challenges.
7. Omnichannel experience
Retailers will increasingly focus on the omnichannel experience, according to Acosta, including physical store formats and digital experiences such as click-and-collect. Today’s omnichannel grocery landscape is valued at more than $1.01 trillion, according to recent data from Nielsen and Rakuten Intelligence, marking a 2.6% increase from a year ago and a 3.4% increase from this time in 2016. In a presentation to analysts and investors, Walmart recently revealed its sales momentum gained by optimizing its stores for e-commerce, including Grocery Pickup.
8. Natural wellness
Acosta also predicts that the better-for-you movement around naturally derived wellness additives will continue to grow in 2019. With functional foods one of the top health trends today, retailers and manufacturers are promoting natural remedies such as turmeric as ingredients that fix something that the body is lacking, according to Technomic, and the year ahead will see a new wave of ingredients that enhance something in the body.
Cannabidiols (CBDs)—which are known to combat anxiety, relieve pain and promote relaxation, among other benefits—will particularly rise in popularity, Acosta said, as the stigma of being related to cannabis continues to decline while marijuana legalization expands and recognition of its medicinal value grows.
9. Shift in shopping trip consumption
Stocking up and pantry loading could be a thing of the past, Acosta said. With more shopping options available now than ever before, shopping trip composition is changing with consumers shifting toward quick trips and pantry fill-ins. Convenience is key, as nearly half of consumers view shopping as a chore, according to a recent Nielsen report.
10. Return to premiumization
As the economic recession fades, consumers will increasingly return to premiumization, favoring quality, convenience and healthfulness over pure price, said Acosta. Premium products are driving growth across the store perimeter, particularly the chocolate sector, where the category’s convenience-store sales increased nearly 2% between August 2017 and August 2018, according to Chicago-based research firm IRI.
11. Expanded health services
Lastly, Acosta predicts that health services will continue to expand in retail. Retailers are increasingly enhancing their pharmacy services with new offerings such as full-time pharmacists, mobile apps and convenient refills. New over-the-counter medicines are also hitting the market as the FDA softens certain regulations for what can be purchased without a prescription.