Challenge to Change: What do retailers need to successfully address today’s and tomorrow’s consumer?

Challenge to Change: What do retailers need to successfully address today’s and tomorrow’s consumer?

16 Nov 2021

Author:Gruppe Nymphenburg

"When the rate of change outside exceeds the rate of change inside, the end is in sight." – Jack Welch, General Electrics.

Living in a VUCA World
Today, the concept of the VUCA world is shaping not only governments and research, but also the economy in particular. Volatile, Uncertain, Complex and Ambiguous conditions pose particular challenges for business players. In today's globalized, interconnected and digital world, change processes have gained speed. Companies face the challenge of identifying and responding to the process of change in their very own corporate environment.

The Power of Megatrends
Change is driven by the enormously powerful megatrends, which influence the way we all go into the future (Megatrend-Map 2021, German Zukunftsinstitut). These megatrends are characterized by four different characteristics: durability, ubiquity, globalism and complexity. Megatrends can be seen as clusters of trends in which different movements (e.g. technological, social, economic) come together. They do not act in isolation, but influence and mutually reinforce each other. Thereby not only individual segments, but entire societies worldwide are transformed. Their duration is about 10-50 years. With these characteristics in mind, it is easy to see why companies need to address these trends. In the wake of the Corona pandemic, some trends have become even more pronounced and are developing even faster. Other trends, by contrast, have been slowed down or have been steered in new directions. People were once again made aware of how dynamically the world is evolving.

From Baby Boomers to Gen Alpha – Generational Differences
When it comes to adapting a trend in society, the characteristics of a generation have a significant influence on the extent to which the trend is adopted and how it is handled. The differences between generations can be seen in their imprint of time, their motivation and characteristics, and thus naturally in their purchasing and consumption behavior. While Gen Y (1981-1995) is more price-conscious and likes to compare prices online, Gen Z (1996-2009) is much more concerned with maximizing experiences, with prices often taking a back seat – just to name one big difference between the generations. These differences arise from profound psychological desires and needs. When companies look at trends and develop solutions for the consumer society, it is essential to take these often very subtle differences into account.

A Closer Look on Food
One of many areas of life influenced by megatrends is food and eating habits. The food trends that develop from this are unlike social megatrends not ubiquitous. They address different target groups and are supported by different actors. Thus, for example, urbanization and the accompanying restructuring of everyday life are reflected in the trend towards “snackification” and convenience. Everyday life is no longer structured around meals, but meals are adapted to the flow of everyday life. Meanwhile, the issue of sustainability is leading to an increasing number of vegans and vegetarians, care is taken to avoid packaging (e.g. unpackaged stores) or to use alternatives to plastic, regional foods and transperancy about the origin of a product gains importance. The pandemic in particular fueled the trends “health” as well as “cooking” or DYI. Among a lot of other trends, these reflect in a change of consumer behavior that must constantly be observed by retailers. In the wake of these trends, the food industry is constantly developing new innovations in the product and service areas. This also poses a particular challenge to traditional retailers. As eating habits change, so do consumer preferences. Retailers need to cater to these. The right assortment at the right location at the right time, reflecting the right message is more important than ever.

The Ability to Change

To ensure a long-term and sustainable success, companies have to address the challenges with innovative solutions - be it new products, processes or entirely new business models, new formats or cooperations. The particular difficulty here lies in identifying the significance of the trends for the respective industry and assessing the degree of maturity, as well as opportunities and risks. Innovations fields, which are either driven by developments in the market e.g. changing consumer needs, or by technological developments, must be derived, set into practice and be questioned consistently.

Interesting Sources:
German Zukunftsinstitut
Megatrend-Map 2021

Zukunftsinstitut, Food Trends: