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Private Label Premiumisation Tops IGD Retail Trends 2018

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Private Label Premiumisation Tops IGD Retail Trends 2018

Premium private label ranges will become one of the most crucial retail trends of 2018, according to forecasts by international grocery research organisation IGD.

The organisation says that retailers are investing increasingly in premium private label brands, with 75% of UK shoppers believing the quality of those products has improved over the last couple of years.

“Private label ranges are a key area in which retailers can differentiate themselves and stand out in an increasingly complex and competitive retail market,” said Toby Pickard, IGD’s innovations and trends analyst.

“For own label manufacturers this could provide additional volume but more pressure on costs. For brands, they will have to ensure their products are superior to justify the price. They are likely to achieve this through showcasing heritage and new products.”

Additionally, IGD predicts four other trends as part of its prediction for the major developments in retail for 2018.

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The organisation forecasts that hyperlocal produce, convenience, health and wellness, as well as blending online and offline retail will be next year’s crucial focal points for retailers around the world.

Hyperlocal, Convenient

IGD notes that shoppers have a strong desire to feel a link to their local region by buying local products. Retailers will thus be selling produce that will be available for a shorter period of time due to seasonality of the supply.

While this will prove more complex for the supply chain, shoppers are set to benefit from greater variation and uniqueness, according to IGD.

“To achieve a hyperlocal offering, retailers will need to support small and medium-sized producers,” said Pickard. “This will be positively perceived by shoppers, as it helps them sustain their community and allows them to feel special, to be part of something unique."

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"The industry will need to ensure that the products sold truly reflect the local communities’ tastes and desires, which will require in-depth local insights. Retailers could tie up with local events and traditions to mirror shoppers’ beliefs and values to help build loyalty.”

However, to succeed, retailers must not compromise on convenience, says IGD. Shoppers’ expectations continually increase for retailers to deliver goods they want in a quick and easy way.

Retailers will aim to utilise the data and insights into shoppers’ purchasing behaviours to understand and potentially anticipate what shoppers want, when they want and where they want their goods, before shoppers even know themselves, according to IGD.

“If shoppers continue to value innovations that offer convenience and time-saving solutions they will have less and less direct interaction with retailers and brands,” Pickard said.

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“Gathering more customer data and using it to achieve long-term shopper loyalty will be critical for retailers and brands going forward. This will likely take the form of artificial intelligence utilising customer information to predict and fulfil shopper demand using automated delivery.

“Retailers may need to create value beyond convenience to differentiate themselves from their competitors, while also keeping fulfilment and delivery costs down,” he added.

Lifestyle And 'Omnichannel'

As has been the case over the last years, health and wellness will continue to grow in importance in 2018. Almost two in three shoppers said the clarity of nutritional information on packaging is important to them, according to IGD.

The retail industry will benefit from playing a greater role in health-conscious lifestyles by expanding their ranges for vegetarian, flexitarian, free-from, and clean living customers.

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“Retailers and brands will need to stay very close to evolving food trends to ensure they are meeting the needs of increasingly diverse and demanding shoppers,” said Pickard. “The winners in this area will be those that are able to predict, create or respond very quickly to the next food lifestyle trend.”

IGD also says that physical stores will need to blend online and offline and big data to reinvent retail and cater for the ‘omnichannel shopper’.

As e-commerce transforms the grocery shopping experience, there will be an increasing number of innovations that will showcase exciting produce, fulfil online orders in less time and offer more in-store shopper engagement, according to IGD.

“Retailers will be looking to enhance the physical store through showcasing exciting produce, while also offering practical solutions to meet the needs of shoppers who want to use a number of different channels,” said Pickard.

“Brands should look to help retailers enhance the store experience for shoppers, while also being able to meet online fulfilment requirements.”

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Kevin Duggan. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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