IDC: ‘Mobile first’ looks like a smart strategy
Retailers who are focusing on mobile as a means of digitally engaging customers have some solid data backing up their approach.
According to a new study from the International Data Corporation (IDC), “How the World Uses the Internet,” more than 2 billion people globally will be using mobile devices to gain access to the Internet in 2016.
In total, IDC estimates that 3.2 billion people, or 44% of the world's population, will have access to the Internet in 2016. This means close to two-thirds of global web users will be mobile in the coming year.
The total number of mobile Internet users is forecast to rise at a pace of 2% annually through 2020, unless significant new methods of gaining access to the Internet are introduced. Efforts by Google, SpaceX, and Facebook among others to make the Internet available to the world’s remaining 4 billion people via high altitude planes, balloons, and satellites are underway. However, IDC advises it remains unclear how successful these endeavors will be and when they will be operational at scale.
In good news for retailers, IDC finds that more people than ever before are making purchases online across all channels. In 2015, more than $100 billion will be spent online on each of the following categories: travel, books, CDs and DVDs, downloading apps, and online classes. According to IDC, these purchases are enabled by online payment platforms that are making payments, online and off, easier and more secure.
Furthermore, IDC data indicates that as more people are spending more time and money online, increasingly through mobile devices, advertisers are shifting their spending accordingly. Almost all of the growth in advertising spending across all of its forms is attributable to the growth in mobile advertising and online video. Advertisers are able to direct ads to users based on their preferences as indicated by online behavior, which allows them to better understand how their content is being absorbed than ads on television and radio.
Consumer clash: Don’t call me ‘old,’ don’t call me ‘young’
Move over millennials, there are two demographics ready to shake up the consumer landscape and impact retail sales.
Based on the growing monikers used to describe the generation that follows millennials, they could be dubbed 'the multi names'. While dispute rages over parameters, the post-millennial generation are loosely defined as those born in the mid-90s to 2010. Sometimes referred to as iGens, digital natives or the conflict generation, the most widely used and globally recognised name is Generation Z (Gen Z).
While the name debate rages on, marketers, researchers and analysts agree that Gen Z is "first and foremost a population tsunami" with current estimates at 2 billion Gen Z-ers globally.
Euromonitor International's 2011 Strategy Briefing details record growth in both emerging and established economies: more than a quarter of the U.S. population belongs to Gen Z (25.9% compared with 24.5% millennials), and as of 2009, India and China counted the largest numbers of teens and tweens with 286 million and 215 million respectively.
Still questioning the market impact of this young consumer group? Current estimates by Fitch (a design and brand consultancy) suggests that Generation Z will grow to be the single largest group of consumers worldwide within the next five to seven years.
However, before we start chasing the fountain of youth, don’t discount boomers – this group spends big (in the U.S., this generation currently has more discretionary income than any other age group, controlling most of the net worth of American households and accounting for 40% of total consumer demand), and plays hard.
In recent years, the term 'baby boomers' has transitioned to 'super boomers', as this demographic becomes increasingly tech-savvy, trend-driven and culturally aware.
Add in dedication to health and wellness, an active approach to travel, and a new breed of fashion and social-media influencers, and the result is a mature demographic that is a force to be reckoned with.
Surprisingly, Gen-Z and Boomers have similar consumer priorities, which means retailers can engage both demographics with similar engagement strategies – as the cool kids say, #winning.
WGSN is tracking global best practices, a few of which are outlined below:
Gen-Z is maturing more quickly than previous generations with one study suggesting that modern childhood ends at age 12, making “tween” sound passé for the majority of Gen-Z.
For boomers, age labels are often associated with pre-existing stereotypes, so avoid terms like old, elderly and senior.
Boomers spend lavishly ($52 billion annually) on their children and grandchildren, and the addition of multi-generational visual merchandising (VM) and product displays yield great ROI with very little work.
Plan ‘reminder merchandising’ around key family events such as spring break and back-to-school; ahead of spring break, a Los Angeles Uniqlo store added multi-generational VM in high foot fall areas depicting a family at Disneyland.
A recent department store display Tom Dixon’s modern display of desks under a canopy of floating textbooks is a prime example of this retail strategy, as the subtle display is a great reminder for Boomers that school’s back in session.
Boomers and Gen-Z rule the internet. Boomers average 27 hours per week online (two hours longer than Millennials and Generation Xers) and are the largest growing demographic on Facebook. As the first generation raised on technology, Gen-Z is the ultimate consumer of bite-sized data and communication, averaging five screens while multi-tasking including a TV, smartphone, laptop, desktop and either a tablet or a gaming device.
Retailers need to create in-store environments that are easily shareable on social media. Outdoor Voices’s flagship store exterior is prime for Instagram pics and reminds us of a text message exchange. Once inside, the interior is a clean, curated environment; it’s bright and airy (no filter needed), and the tumblr inspired mood board changes weekly.
Another bonus? The center seating area ticks to important in-store boxes; Boomers can kick up their feet and Gen-Z can Snapchat away.
We know that seating areas extend dwell time in store, but for both generations, a communal space is key for retailers and we don’t just mean seating near fitting rooms.
Shelter is a new concept store in Auckland, New Zealand, which, alongside selling contemporary fashion, homeware and lifestyle products, has an indoor cafe and outdoor patio area with relaxed seating.
Hip, young fashion brand Mardou & Dean’s new boutique in Oslo incorporates a cafe, seating area, gallery space and a winter garden in a light setting. In the warmer months, the outdoor seating area becomes a meeting place where shoppers are served coffee while browsing newspapers and lifestyle magazines.
The newly opened YME concept store in Oslo features a cafe annex bookshop on its third floor, stocked with relevant books and magazines from across the globe, while the rooftop terrace offers a lush green getaway. Adding to the shopping experience are exhibitions, product launches, book signings and other events.
These communal retail spaces create a consumer call-to-action to return to the store as the experience steadily changes. In an era where customer poaching is the swipe of smartphone away, in addition to product offer, give your shoppers a reason to return.
Andrea Bell, Think Tank Director, WGSN
The future of food, NPD weighs in
Fresh, real and hot (as in spicy) are among the top trends food retailers can look to capitalize on in the new year, according to one of the nation’s foremost food authorities.
Supermarket operators and other retailers should pay attention to what NPD’s Bonnie Riggs has to say about trends for the coming year. She is the consumer insights firm’s restaurant industry analyst and from that vantage point she is able to glean information about diners’ preferences when eating out that have application for the in-store environment, where an increasing number of operators are focused on offering prepared foods that rival or in some cases exceed restaurant quality. Here’s what Rigg’s had to say in NPD’s 2016 Foodservice Outlook.
Keeping up with the latest health trends in the foodservice industry is an ongoing challenge. Fortunately for restaurant operators, consumers’ definition of healthy food has broadened. It’s less about removing negatives or adding positives, and more about simply eating real food.
This year will bring a continued focus on consumers modifying their eating habits, ranging from purchasing healthier options to clean eating and everything in between.
What will foodservice operators and manufacturers need to address to satisfy the growing demand for “real food?” Better for you options are not necessarily about fewer calories, low fat, lower sodium, etc. The trend is towards foods and beverages that are considered “wholesome and real”.
The influence of clean eaters on the restaurant industry is beginning to appear and it will become even more pronounced as a number of major chains announced plans to eliminate additives such as artificial ingredients or offer additive free proteins. To stay competitive and satisfy the growing demand for clean eating, many more chains are sure to follow suit.
Clean eaters tend to define clean eating by what isn’t in their food, such as chemicals, preservatives, pesticides, and additives. They are looking for removal of “artificial” ingredients and want to see more locally sourced, house-made, and vegetarian-based dishes on menus. This requires staying on top of this evolving trend as it will become even more important to consumers as their knowledge of “clean eating” increases.
Nowmore than ever, menu innovation is the key to confronting the challenges facing the foodservice industry as operators and their supplier partners seek to grow their business. Meeting the needs of today’s consumers with an ever increasing multicultural population is no small feat. New menu items with unique flavors and ingredients are becoming even more important in getting consumers to choose to visit your restaurant over the competition.
Looking back on 2015, it was a year of menu innovation which resulted in many operators being successful in driving sales and traffic. 2016 will bring even more innovation to meet consumers growing demand for something new and different. And, at the same, meet the growing demand for real food.
Fresh is becoming the mantra for healthier food choices when consumers go out to eat. Consumers want freshly prepared foods, quality foods made with real/fresh ingredients, sourced locally if possible. In the coming year, “fresh” will become even more prevalent on restaurant menus and portrayed in restaurant operators marketing campaigns.
This past year was filled with spicy sauces (Louisiana Hot Sauce, Sriracha, Ghost Peppers, etc.) used on everything from burgers to chicken sandwiches and wings to pizza and fries. When you use hot, spicy sauces and stronger flavor profiles, an operator can influence consumers’ willingness to try menu items with these enhancements. 2016 will bring even more creativity to menu innovation, expanding into other unique sauces and ethnic cuisines.
The list of foods thought of as comfort food is broad. But there is one thing almost everyone can agree on: everyone has at least one favorite comfort food dish. Some of the hottest chefs in America are taking these old favorites and infusing them with high-end, fresh ingredients. They are putting a new twist on old favorites and it’s resonating with consumers. We anticipate seeing more innovation in this area in the coming year, in part, due to the nostalgic memories associated with these menu offerings.
Value wars are once again on the horizon as McDonald’s announced that it will offer a 2-for-$2 menu at the beginning of the New Year.This offer follows on the heels of Wendy’s 4 for $4 meal with a junior bacon cheeseburger, four chicken nuggets, small fries and a small drink. Much to the chagrin of many restaurant operators, “value wars are back.” Many others will likely have to follow suit to compete in the battle for market share among value seekers, of which there are many.
It can be a challenge to keep up with consumers’ ever-changing needs and to demonstrate your competitive point of difference. This can be accomplished in a myriad of ways as noted in NPD’s 2016 outlook for the foodservice industry. As we move into the New Year, focusing on consumers’ evolving food and beverage choices will lead to success as was demonstrated by a number of major QSR chains in 2015. The ability to attract more customers in 2016 will ultimately come down to the food – it’s all about the food.
The forecast for traffic growth in 2016 is modest with a growth rate of 1 percent. However, if we take a look at where we are today and where we have been, we are beginning to see light at the end of tunnel. Yes, it has been a long slow recovery but, in 2016 we will have recovered nearly all of the steep traffic losses incurred after the recession began in 2008. QSRs will support the gain, while casual dining traffic is forecast to hold steady and midscale to decline by 1 percent.
With continued focus on consumers ever changing wants and needs, we can alter the current forecast of minimal growth. After all, forecasts are not cast in stone; they are to be used as a guideline and something to work against.