The Future Will Be Different

By Al McClain

At the recent National Grocers Association's (NGA) Executive Conference, Andrew Zoli, who is futurist in-residence for Popular Science and American Demographics magazines, outlined a future full of opportunity and complexity. Here is a sample of some of the trends he sees that will affect the retailing industry:

Demographic Transformation

• While the world is on the road to a population of over 9+ billion, the rate of growth is slowing and population in parts of Europe and Russia is actually declining.
• Urbanization is increasing - soon more people will live in cities than in rural areas.
• In some developing countries, 70 percent of the population is under 30, while many developed countries have much older populations (e.g. Italy's average age is over 50).
• The U.S. will have the largest number of old people and young people in 2025. It will be hard for the smaller working population to provide resources to these groups
• There will be a huge number of products designed to help boomers live longer.

Choice, Commoditization & Experience

• Supermarkets are a sea of sameness, offering the "tyranny of choice" - 40,000+ SKU's (of which many are near-duplicates) while consumers can pay attention to only 160.
• Individual product choices and innovations often do not offer enough benefit to offset the time and trouble it takes consumers to figure out what the benefits are.
• The older a consumer is, the more satisfied they are with fewer choices.
• Companies need a chief "no" officer to simplify things, edit product choices, etc.
• Staples is an example of a retailer addressing these changes by reducing SKUs, developing an "Easy Rebate" program, and conducting an annual competition for best consumer innovations.

The Rise of Ambient Intelligence

• Technology will be embedded everywhere, such as "functional packaging" where a package of pills can actually email you to remind you to take your dose or another container to tell you how ripe the fruit is inside.

Green Goes Mainstream

• Environmental trends are moving from conservation to sustainability to "ecovation."
• LOHAS (Lifestyles of Health and Sustainability) products will sell a lot more in the future as older consumers embrace "green" and as they think about their legacy. Young people will embrace the trend, as well.
• LOHAS consumers are willing to pay a 20 percent premium.

During the Q & A, Mr. Zoli said that the trend will not necessarily be to smaller stores but that consumers want retailers to present a better-edited assortment and help guide them to the products they want via simplified signage and directories.

As part of a panel discussion that followed, Al Plamann of Unified Western Grocers suggested that changing consumer demographics might actually call for more products, not less.

Tom Zaucha of NGA said that he was taken with the magnitude of the change that Mr. Zoli forecast and sees opportunities for entrepreneurs in the industry that have a good understanding of what consumers want on store shelves.

Dick King of Associated Food Stores-Retail noted there are not enough skilled younger workers to accommodate the industry's needs and there will be a need to rely more on older generations.

Discussion Question: What do you see as key opportunities for retailers and manufacturers based on Mr. Zoli's outlook?