The last two years have been a roller coaster for consumer goods businesses. Shoppers demand more convenience and innovation but continue to be frustrated by higher prices and product shortages. The Great Resignation added more turbulence to an already fraught labor market. Add the ongoing supply chain crisis, and it’s pretty clear that this wild ride isn’t ending anytime soon.
So, how can you prepare for what’s next? Here, we’ll surface four emerging consumer goods industry trends and share what the savviest brands are doing to keep up.
Tighter margins drive commercial efficiency
Consumer goods (CG) margins were already tight before 2020. Today, higher prices for raw materials like aluminum and cardboard, plus skyrocketing shipping costs, are further threatening profits. Given predictions for even more price increases and volume declines in 2022, it’s never been more important for CG companies to maximize every budget dollar.
How can companies prioritize growth and drive commercial efficiency at the same time?
So, how can companies prioritize growth and drive commercial efficiency at the same time? By uniting B2B sales functions on a shared digital platform. With a single source of truth, companies can increase field rep productivity, cut the cost to acquire new customers, and shorten the selling cycle.
Labor shortages force new ways of working
CG companies are eager to deliver an excellent experience. In fact, 80% of business buyers say the experience they have is as important as the products they purchase. The challenge is that CG businesses are operating at an estimated 20% below capacity due to a labor shortage. With 79% of buyers saying they are willing to try new brands, the pressure is on CG companies to deliver unique and personalized experiences with fewer employees.
The right tools help employees stay focused, organized, and productive:
Enable collaboration from anywhere
Companies that rely on digital communication tools facilitate collaboration. That’s because a single platform keeps channels organized and secure while streamlining document-sharing — essential for newly-remote (or hybrid) workforces.
Automation empowers customers and saves you money
Automation improves the customer experience by facilitating self-service, say 93% of companies. Digital tools empower customers to do things like track shipments, get answers to frequently asked questions, and process returns — and that’s just the start.
Consolidate data from different systems to save time and money
Relying on others to run reports or log into systems isn’t just annoying; it wastes time. Making data from disparate sources visible on one screen gives your employees a seamless digital experience and drives insights-driven decision-making.
Modern trade promotion management drives growth
CG companies are counting on profitable promotions to grow revenue. The bad news is 72% of promotions won’t break even. The good news is optimizing trade spend drives higher top- and bottom-line growth. Given that 71% of CG companies still use spreadsheets to manage promotions — which are the second-biggest expense item after cost of goods sold — leaders are giving trade promotion management (TPM) a fresh look.
Approximately 80% of consumers are more likely to buy from brands that tailor experiences to customer preferences.
Companies that digitize TPM can easily optimize and analyze their promotions: Not only do they observe incremental revenue gains of 4%, they also see a 10% reduction in write-offs. That’s because automated ROI analysis enables employees to spot the most profitable programs at a glance and in real time (and scale or replicate them for impact later).
Personalization increases revenue
Approximately 80% of consumers are more likely to buy from brands that tailor experiences to customer preferences. The financial rewards are rich: Companies that get it right see a 50% increase in customer loyalty and a 52% increase in average order value. But to deliver on the promise of personalization, companies need to build their first-party information infrastructure, and they have to do it before the cookieless future begins. That’s why 82% of brand leaders are focused on gathering data like consumer email addresses, purchase history, and payment preferences.
Here’s why: Applying predictive analytics to data-rich customer profiles will help you spot trends and unearth insights that drive revenue. For example, data-driven marketing that segments audiences using strategies like A/B testing can increase net sales by 3% to 5%. These types of interactions also build a more engaged customer base. That’s important, because emotionally connected consumers are twice as valuable as highly satisfied consumers.
Keep up with consumer goods industry trends
Even the world’s fastest roller coaster can’t compete with the thrills of these once-in-a-generation market conditions. That might mean that CG companies have to buckle up and work harder than ever before. But by keeping a weather eye on these trends, they can win the hearts and the wallets of consumers for years to come.