We built this city, on a sausage roll

Pro Ganguly Blog, Retail

The coveted No. 1 spot on the 2018 Christmas music charts was taken by YouTube sensation ‘LadBaby’ with his rendition of Starship’s 1985 chart topping hit “We built this city” titled “We built this city, on sausage rolls”. The song reached No 1 by beating chart toppers like Ariana Grande and Miley Cyrus.

Exactly a week after the Christmas No. 1 single was announced, HMV announced it was going into administration (again) despite accounting for 31% of all physical music sold in the UK in 2018 but with predictions that the market would fall by 17% during 2019. On the 3rd of January, Next, the clothing retailer announced that online sales rose 15.2% between 28 October and 29 December from a year earlier, while store sales fell 9.2%.

That same day, Greggs, the high street bakery chain announced that they have launched a vegan sausage roll! So how can LadBaby, HMV, Next and Greggs be linked and what does it tell us about the shape of retail in 2019 and beyond?

‘Scale doesn’t guarantee success

There is no doubt that the likes of Ariana Grande and Miley Cyrus, world-wide superstars with millions of followers both on and off social media and signed to major record labels would have had the luxury of a large PR team and seven figure sums to promote their songs to help them reach the No. 1 slot in the Christmas charts. Yet, they were pipped to the post by a 31 year old YouTube dad-blogger – Mark Hoyle from Hemel Hempstead! As of December 2018, LadBaby had 450,000 subscribers to his YouTube channel, 2.9m ‘Likes’ on his Facebook page and 270,000 followers on his Instagram page – a fraction of the combined total of Ariana and Miley’s followers across the various social media platforms. The reason LadBaby succeeded is because firstly, as Brits, we love to support an underdog and second, and perhaps more importantly, the purpose of his record struck a chord with the audience – all profits from his song were being donated towards a food bank charity. It was the same with Christmas TV ads – Iceland’s ‘banned’ advert highlighting the impact of palm oil production on orangutans was the most viewed ad for the Christmas 2018 season compared to the millions of pounds spent on ads by other retailers such as John Lewis Partnership, who reportedly paid Elton John £5m. The lesson for retailers here is that their scale or the size of their marketing budgets doesn’t necessarily guarantee them success – being in-tune with their customers is far more important.

The way we shop continues to change

Whether it’s music, DVDs or other products, the way customers shop continues to evolve. What’s fascinating about LadBaby’s Christmas single was that it was only released online and wasn’t available to buy as a physical media. The official charts website reported that 93% of the sales of the song were online downloads with the remaining coming through audio and video streams. Next’s revelation that its online sales growth outstripped sales of its physical stores will no doubt be echoed when other retailers announce their Christmas trading performance over the coming weeks. For retailers, having an omni-channel strategy is no longer an option – it’s a necessity for their survival.

The influence of social media on what we buy

The rise of social media influencers and the messages that they spread through the various social media platforms is continuing to shape what a lot of customers buy into – especially the millennial generation. Some of the influencers have millions of followers and big brands are utilising the impact that they have by getting them to endorse brands/products, earning the influencers, in some cases, millions of pounds. Retailers need to review how they are communicating with their customers and how relevant traditional forms of marketing such as TV, radio and press advertising really is for a generation whose main form of obtaining news and entertainment is through smart phones and tablets.

Adapt or be left behind

Retailers who fail to adapt and satisfy new trends will be left behind by those that do. Greggs launching a vegan sausage roll and McDonalds launching a vegetarian version of the children’s Happy Meal is a prime example of this. The ‘meat alternatives’ market is forecast to grow to a staggering $6.3 billion category globally by 2023. Driven by increased awareness of the negative impacts of meat production on our environment and the health benefits of switching to a meat free diet, this sector has continued to grow steadily over the past few years. In the UK alone, the charity Veganuary predicts that over 300,000 people have pledged to go meat free in January with the actual number likely to be several times higher. Mintel reported that in the year to June 2018, 14% of all UK supermarkets’ NPD was in the meat free category with this sector delivering the second highest value growth within grocery. Most major supermarkets are increasing the size of their meat free and vegan ranges with focus now shifting to developing and launching own brand products to grab a slice of the market share whilst satisfying customer trends. Retailers need to be a few steps ahead in predicting trends and being ready to satisfy what their customers want – those that don’t or are slow in reacting, will be the biggest losers.

Maybe Ladbaby needs to consider re-writing his song for this year’s attempt at the Christmas singles chart No 1 spot – “We built this city, we built this city on vegan sausage rolls”.