Are You Ready for 2019?

Just writing the year “2019” scares me.  It seems like only yesterday we were in 1999, preparing for the new millennium.  (I know our IT department can’t wait to correct me.  Technically, the new millennium began in 2000.)   I got really scared and felt really old when I learned Prince released the album “1999” in 1982.  Time marches on whether we like it or not.

I’ll start with a recap of my 2018 trends which were posted January 3, 2018, and conclude with 2019 predictions.

  1. The return of inflation. Yes, I’ve thought this would happen for a while.  It took six years for label prices to go up.  I don’t know if there will be more increases this year but the overall trend for commodity prices is up.  Pay attention to oil.  If the Russians and OPEC are finally convinced that fracking is here to stay, they will restrict output and let prices rise.  While US producers will fill some of the gap, they will like the higher prices as well.  Don’t discount politics either.  We have a president that loves debt.  Debtors benefit in times of inflation. 2019 Comment: Not bad. Missed on oil but got inflation right.
  2. More consolidation in every industry. Technology and customer demands create advantages for those that scale.  That will continue to accelerate in 2018 and beyond.  I say this every year and it’s the one thing that I’ve been consistently right about! 2019 comment: I didn’t go out on a limb for this one.  The consolidation trend will continue. 
  3. Environmental concerns start to impact the packaging industry, especially in the U.S. The dramatic growth in internet retail has led to an explosion in packaging consumption.  If I were a bricks and mortar retailer, I’d be screaming about how environmentally unfriendly this trend is.  Prior to the recession, environmentally friendly packaging was a hot topic.  Once the recession hit, companies wanted to be environmentally friendly as long as it did not cost more money.  Smart companies will figure out how to make being environmentally friendly a strategic advantage.  Expect Amazon to announce a major environmental initiative. 2019 comment:  Do straws count?  The environment will remain a hot topic.  If your neighborhood is anything like mine, you saw the amount of packaging associated with e-commerce at the curb after Christmas.  https://www.nationalgeographic.com/environment/2018/07/news-plastic-drinking-straw-history-ban/

 2019 trends/predictions

  1. To state the obvious, after a relatively calm period, volatility returned to the financial markets in the last several weeks. It will continue and impact the economy.  Banks will begin to tighten credit standards.  Economic growth will surprise on the downside at some point during the year.  Overall, the US economy will grow but the growth rate will slow.  (This is a prediction I would love to be wrong about.)
  2. Expect volatility in your supply chain as shortages in raw material components (real or perceived) are possible. Top concerns are thermal transfer ribbons, release liners, and certain adhesive components.  As I’ve written in the past, price does not matter when you cannot get something.  Be prepared for longer lead times.
  3. The death of bricks and mortar retail continues to be greatly exaggerated. For environmental and cost reasons, direct to consumer shipping slows.  Merchants will encourage (translation: monetarily reward) consumers to pick up items ordered online at centralized locations.

The New Year is a great opportunity to reflect on what went right, what went wrong, and what you can do to change your future.  I hope you create the 2019 of your dreams.

 

 

 

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