As 2018 draws to a close, it offers the opportunity to reflect on key ideas and moments that have helped shape our year and may give insight into what’s next. Regardless of business type or size, the current challenge is how to adapt to the needs of the modern customer. And while technology undoubtedly plays a role, and topics like AI, data and digitisation are top of mind for many, we’re urged not to lose sight of good old-fashioned ways to surprise and delight customers and keep them coming back.

From Amazon to Afterpay, the emergence of Gen. Z, voice technology and ongoing Facebook controversy, these are some of this year’s most topical issues.

Facebook watershed

It’s been a year of controversy for Facebook with user trust at an all-time low after a series of data breaches beginning with the ongoing Cambridge Analytica scandal (revealing the company harvested personal data of millions of profiles without their owners’ consent for political purposes). Described as a watershed moment in the public understanding of personal data, it precipitated a massive fall in Facebook’s stock price, drop in advertising revenue and calls for tighter regulation. Despite this, the exodus of younger users and reportedly apocalyptic algorithms changes this year, Facebook still remains a relevant means to reach and engage audiences – so long as you don’t put all your eggs in one basket that’s ultimately owned by someone else.

Amazon, Afterpay and new retail

The dust has settled after the much-hyped launch in late 2017 and now one year later the e-commerce juggernaut has rolled out Amazon Prime, and in October started selling dry groceries, like specialty, health and organic foods. Honest to Goodness, Mayvers, Power Superfoods, Blue Dinosaur and Smoothie Bombs are some of those to embrace the platform.

More broadly, 2018 has seen Australian omni-channel and online retailers respond with sharper offerings, new players like Healthy Life enter the space, and retailers at the big and smaller end of town continue to discuss the best “new retail” strategies in the age of the connected consumer. The Afterpay effect has also dominated discussion, with a recent ASIC report indicating collectively Australian customers owe $903 million in buy now, pay later debts.

Emergence of Generation Z

While Millennials and their impact on the way we do business still dominate discussion, 2018 heralds the emergence of Gen Z. Gen Z is rapidly becoming Australia’s next purchasing superpower, representing 20 per cent of our population and 30 per cent globally. True digital natives, these younger siblings of Millennials are tech savvy, highly selective and will require new strategies to meet their needs. Read more about targeting Gen Z from James Purcell at Growth Tank Agency, a speaker at Naturally Good 2018.

Personalisation

Personalisation has been dubbed one of the biggest marketing trends of 2018. While the concept itself is far from new, major e-commerce and omni channel retailers like Amazon have helped raise the bar and, for today’s hyperconnected consumer, personalisation is key. According to 2018 research, 80 per cent of today’s consumers are more likely to do business with a brand if it offers some level of personalisation, and Deloitte says 25 per cent of us are prepared to pay more for it.

Access to personalised health data through the convergence of new technology and the science of nutrigenomics has helped facilitate trends like bio hacking [internal link to natural health trend article]. In FMCG, manufacturers are introducing ways to allow consumers to put their personal stamp on products with various DIY and ‘speed scratch options’, capitalising on intersecting consumer desires for personalisation, convenience, self-sufficiency and transparency.

Small is the next big thing

There’s been a buzz in Australia around small, craft and unique brands for some time, but 2018 has seen more retailers sit up and pay attention, seeking out independent and often premium, healthy brands to help differentiate and increase margin. According to Neilsen, small, niche and nimble is the key to unlocking growth for Australian retailers and manufacturers, and indeed many of these brands have been growing rapidly online selling direct to consumer with savvy digital marketing strategies.

Likewise, big consumer packed goods (CPG) companies have been snapping up smaller, independent natural, organic and healthy brands as part of innovation and customer acquisition strategies globally for years. This year’s significant news goes to two homegrown heroes: Coca-Cola Amatil acquired Organic and Raw Trading Co. earlier this year for its Mojo Kombucha brand. Coca-Cola Amatil then later took a 45 per cent stake in local beverage company Made Group, known for leading Australian brands including Cocobella, Rokeby Farms, Impressed and the company’s first brand, NutrientWater, which was launched from scratch in 2005.

Voice technology arrives

Voice commerce is being dubbed as the next big disruptive force in retail, with OC&C Strategy Consultants predicting sales to grow from $2 billion to $40 billion in America by 2022. Driven by an increase from 13 per cent to 55 per cent of homes using smart speakers, retailers and marketers are working on the role of voice and the opportunities it presents. In Australia uptake is still low, but Salmat research indicates half of Australians are willing to shop using voice.

Sustainability and social responsibility

Increasing awareness around ethical and environmental issues is driving the rise in mindful consumption with consumers increasingly making purchase decisions that match their values. This is especially true for millennials, the generation most likely to vote with their dollar. Prepared to pay more for brands and products that support their values and from retailers they trust, this generation is defined by their demand for transparency, and social and ethical responsibility.

Smart independent retailers are differentiating on their values with meaningful storytelling that positions purpose at the heart of their business, while larger retailers and consumer goods companies are developing responsibility practices and launching more ethical product lines.

Sustainable packaging is now a must with Australian government and industry leaders setting ambitious targets for 100 per cent sustainable packaging by 2025.

Trust

Australian institutions are among the world’s least-trusted according to this year’s global Edelman Trust Barometer, showing trust fell across all four of its pillars in Australia for the second year running, putting us just four percentage points above Russia. More recently, the Governance Institute of Australia’s annual Ethics Index also shows a drop since 2017 based on poor perceptions of the banking sector. Plain and simple, the key takeaway for all is just do the right thing by your customers, shareholders and staff.

China and South East Asia

Brand Australia is in demand in China and South East Asia, but it’s no longer enough to have clean and green credentials. China expert David Thomas says it’s baseline requirement for any product manufacturer or brand from any country looking to enter the China market and focus needs to shift to articulating the value proposition. Local small businesses succeeding in Asian markets include Aroma Baby and Koala Eco.

Were you aware of these trends in 2018? Keep up to date on the evolving world of the natural and organic industry and join us in 2019 to find out about the latest products and innovation, and listen out for business tips throughout our seminar program next year!

 

About the author

Lisa Crawford Jones is an award-winning journalist, editor of What’s New in Healthy Products and content manager to the Naturally Good Expo. She’s a health content specialist with two decades’ experience spanning senior positions in public health policy; media, communications and advertising; and both consumer and trade markets for healthy packaged goods.

About What’s New in Healthy Products

What’s New in Healthy Products delivers information on the latest product releases, consumer trends and insights in the Australian trade market for healthy packaged goods across food and drink, beauty and personal care, and natural health. For more articles like this, subscribe here.