Consumers in 2020: 5 Trends to Watch
As a new decade begins, continued change is the only certainty. Buying habits, like resale and rental, are challenging the traditional consumption model, while consumers continue to expect the brands and retailers they buy from to deliver more—and increasingly, stand for more. Amidst these shifts, our Industry Advisors and analysts, experts in industries ranging from apparel to food, recently convened to discuss the trends they expect to take center stage in 2020. Read on to see the trends and explore how successful players will adapt to these shifts.
Old Favorites Will Make a Comeback
Social media buzz breathes new life to old products
From fanny packs to classic sneakers, beloved products of the past have made strong comebacks recently. Many consumers actively seek out retro-inspired products. Often, brands need to look no further than their past products for design inspiration. “Reissues help generate buzz and make a brand relevant, especially when paired with an exciting social media strategy, a tactic used by some successful watchmakers recently,” said Watches and Luxury Industry Analyst Reginald Brack.
In addition to product releases, consumer-born social media trends, like VSCO girls, continue to breed interest in retro-inspired products. For instance, VSCO girls have shown an affinity for instant-print cameras, similar to the Polaroid products of the 1970s, said Consumer Technology Industry Analyst Ben Arnold. As these trends play out, retailers and brands should be on the lookout for new ways to capitalize on older designs.
Promotion-creep Will Continue
Promotional behavior expands to more industries
Across industries, consumers continue to be "trained" to seek deals. Consider the off-price channel, where consumers report paying nearly 60% less for products compared to prices in traditional department stores. Apparel sales at off-price retail grew 3%, while total apparel declined 3%, in the 12 months ending November 2019, as shown by our Consumer Tracking Service information.
Consumers are even seeking deals in luxury industries, like prestige beauty—industries once considered immune to discounting. “In the makeup category, consumers are increasingly waiting for key retailer promotional sales and holiday focused promotional periods, like Black Friday, to buy products,” said Beauty Industry Advisor Larissa Jensen. Despite an increase in promotions, makeup category sales are in decline, a worrying sign, she added.
As discounts become the norm, consumers will come to expect them over the long-term. “You have to be one of the most unlucky people in America if you are paying full price for anything these days,” said Chief Industry Advisor Marshal Cohen in a recent New York Times article. Cohen added, “Promotional pricing to drive sales rather than just manage inventory is a dangerous precedent. Retailers and brands need to learn how to use promotional pricing responsibly, and not allow it to consume their industry.”
Video: Race to the Bottom
We can't drive ourselves to the lowest price. No one wins a race to the bottom.Vice President and Sports Industry Advisor, Matt Powell
Demand for Sustainable Alternatives Will Increase
Activists and consumers press businesses for greater action
As activists and consumers continue to push for greater social action, we expect businesses to face continued scrutiny over environmental practices in the coming year. For instance, once ubiquitous products, like the plastic straw, now face opposition. Seattle, Miami Beach, and other cities have recently instituted plastic straw bans, citing environmental concerns, while some restaurant chains have voluntarily eliminated plastic straws. Starbucks says it will eliminate their use globally by the end of the year.
With declining sales, activists are making tangible headway in the war against plastic straws. Although plastic straws account for a tiny fraction of total plastic production, there is hope that eliminating them will lead to “more significant behavioral changes"—a call for businesses to proactively consider eco-friendly solutions to the issues consumers care most about.
Need for Convenience Will Accelerate
As Millennials reach a new life stage, convenience becomes even more critical
In 2019, over 10% of consumers said convenience was the most important aspect of the foods they eat — a trend that's gained steam over the past several years. This is largely driven by increased responsibilities among a large Millennial population that has "grown up" and is now in peak career and family-formation life stage, said Food Industry Advisor David Portalatin. And as more Millennials reach a later life stage, manufacturers, retailers, and restaurant operators that offer time-saving solutions to busy consumers will be poised for success, he added.
As consumers look for convenient meal options, there are also opportunities for retailers and manufacturers in the smart home space to provide solutions in the kitchen. “We’re seeing a growing number of tech-enabled kitchen products hitting the market that facilitate a seamless meal preparation experience, resulting in increased consumer adoption. This affords retailers an opportunity to offer product expertise and home installation services as consumers look to understand which products will work well together in their homes and how to get them set-up quickly and easily,” said Technology Industry Advisor Stephen Baker.
Video: The Convenience of Online Grocery Shopping
You no longer have to leave the comfort of your couch to order your groceries…We have an opportunity to rethink the future of the grocery store in a true omnichannel experience for the consumer.
Ownership Will Transform
Resale and rental challenge the traditional retail model
No longer a function of financial necessity, resale clothing purchases have gone mainstream, especially among younger generations. 45% of Millennial apparel consumers have purchased used clothing on an online consignment retailer site, like Poshmark and The RealReal, as shown by our Future of Apparel report. Though less prominent than resale, rental is another popular retail model among millennial apparel consumers, with 36% of this group reporting that they've ever used online apparel rental services.
Retailers and brands may be hesitant to offer resale and rental goods out of fear of cannibalizing sales of new products. When asked if these models can be viable, however, Sports Industry Advisor Matt Powell responded, “They certainly can be. Rather than a one-off transaction, a retailer and brand can use these models as a way to service one customer across many instances, and many customers with the same product."
As young consumers continue to challenge traditional notions of ownership, we expect a rise in retail models that make use of resale and rental, offering shoppers additional avenues to interact with the products they enjoy.