The Rise of Ethical Shoppers

While often considered a trend led by younger generations, conscious consumerism is a sentiment shared across generational lines. In fact, older shoppers are the most likely to be strong advocates of reuse and recycling over younger cohorts (Figure 2).

As such, sustainability is a hot topic already, with 5p grocery bag legislation and retailers like H&M pledging to “close the fashion loop” by recycling used clothing in stores. But shoppers will demand more than £5 coupons and flashy marketing campaigns in the future. We are seeing this trend shift from a marketing platform to a total transformation in the business model as shoppers demand more transparency from brands and retailers. Iceland Foods provides a prime example of the drastic changes we expect to see in retail. It has already pledged to rid its private label products of plastic by 2023, showing environmentally conscious shoppers its commitment while putting pressure on other brands to do the same (Figure 3).

The Demand for Personalization and Brand Authenticity

Shoppers will increasingly demand transparency and authenticity from brands. Over half of all consumers say being able to personalize a brand or product to fit their needs is essential (Figure 4).

This authenticity is something that shoppers think is more prevalent in smaller, niche, or “challenger” brands. Instead of trying to be everything to everyone, these brands, which have experienced more growth recently at the expense of large multinationals, target a specific shopper with a USP: Think Graze boxes versus Walkers or Zara versus Debenhams.

This desire for authenticity is causing the retail industry to react with a slew of new business models developed to target specific shoppers (Figure 5). Subscription services and pop-ups are just the beginning of the retail model evolution with shoppers at the core.

The ‘Servicization’ of Retail

The rampant increase in services at stores will continue as shoppers demand more from retailers. Brands are now in hot competition with more than just their direct rivals for shoppers’ share of wallet as shoppers increasingly prioritize experiences over things (Figure 6).

Services will continue to increase at retail for two main reasons. First, services will help retailers and brands provide the personalized solutions that shoppers are demanding, creating a full-service solution rather than one-off product purchases. Second, providing services will help retailers regain sales dollars as shoppers shift toward more experiential retailing.

The Necessity for More Creative Brand and Retail Partnerships

As shoppers demand more from retail, brands will be hard-pressed to provide the right solutions for tomorrow’s shoppers with their current set of tools. They will need to develop, acquire, and, in many cases, find unlikely partners to serve shoppers more creatively. We have already seen some of these “strange bedfellow” partnerships, with Next opening a concession inside Tesco and Persil partnering with on-demand laundry app service Zipjet to foster awareness in new shopping channels (Figure 7).