Blockbuster brands, effective branding and product innovations for the mass market had been the success formula for consumer-goods companies. Most recently, emerging markets in Asia accounted for three-quarters of revenue growth.
According to Nielsen, after a decline of 19% in the Jan-Mar quarter, the Consumer Goods industry displayed signs of recovery in Q3’20 with a 1.6% growth versus Q3, 2019. According to Kantar Worldpane, the Consumer Goods sector in India is expected to report a 4-5% volume growth in FY21, driven by rural areas that are expected to grow two percentage points ahead of the urban regions.
While other industries faced a decline last year the consumer goods industry managed to not only stay afloat but also succeed. How can the organisations in this industry sustain this success and capitalize on it further? What are the trends to watch out for that would impact the industry over the next 12 to 24 months?
Trend #1: The effect of the millennial consumer
As is with every industry with the advent of new technologies and newer ways of interaction there is a transformation in the way retail customers engage with consumer goods companies. Today’s consumer is more involved and better informed with a surfeit of options to choose from and the necessary resources to educate and make purchases on their own. Not only are they more informed, but their preferences have also rapidly evolved, gravitating towards the “wellness wave”, and demanding more convenience in getting their meals. CG companies have been quick to respond to these changes with most of them enhancing their product portfolio to include healthier alternatives and ready-to-eat meals.
Trend #2: Growing digitalization of the industry and consumers
In our past articles, we have discussed how new customer experiences are a hybrid of digital & human and how easy access to technology and social media are revolutionizing how consumers learn about and engage with brands. People are doing a lot more on their smartphones, they are discovering and reaching brands online. In 2021, digital acceleration in the industry is expected to keep up with the growing digitalization of consumer lives. Smartphones and social media are a part of consumer’s reality, and to emerge profitable in the next decade, the industry will have to find new ways of reaching & interacting with customers.
CPG companies today have to do more than just ‘talk’ to consumers. They need to re-imagine their go-to-market strategies and reimagine the customer experience. Selling to the consumers directly via the internet will be a top priority in the coming few years. This will not only help in boosting sales and online presence of the companies but will also help companies with highly valuable consumer data for shaping product offerings.
Trend #3: Big Data to predict the future preferences
With the shift to digital and online channels of marketing, technical skills—including digital expertise and data analytics have become increasingly important. Consumer-packaged goods players heavily rely on analytics to understand consumption patterns and create a more personalized approach to drive profitable sales. Big data is especially useful for experts to drive targeted promotions and other marketing activities for the consumers. Ample information is being generated regularly on the buying and spending patterns of consumers, which CPG companies can use to design and better optimize their product portfolios.
Also, with greater adoption of IoT devices underway, the always attached and connected sensors can provide large amounts of information to the CPG companies for developing new products and services by analyzing and processing the generated information. For instance for more precise stock management and to avoid wastage the data through IoT devices can help track assets and monitor resources in real-time and help in highlighting the areas that can be modified to suit the business goals.
Trend #4: The frontline factor
To successfully navigate through the trends mentioned above, consumer goods companies need to invest heavily in their salesforce productivity. A frontline sales rep in a CPG company performs several tasks daily including manual updating of tasks such as client’s purchase history, ordering frequency, payment history, inventory checking, basic merchandising, relationship building with the customer or retailer, etc. In such a scenario where frontline reps need to be updated with the right information at right time, sales leaders need to adopt more non-traditional approaches to hiring and upskilling/reskilling them. This will help CPG companies to not only generate new growth by quickly reacting to, but they can also take the opportunity to realign their strategic focus to successfully transition their business and salesforce into the next decade.
Sales enablement & utilization of digital learning in CPG Industry
CPG organisations continue to penetrate our lives in more ways than one; a drawback of this being a highly competitive and cut-throat industry in which they operate. With platforms like Amazon driving high consumer satisfaction, consumer goods companies have been forced to revaluate not only their product portfolios or marketing strategies but also the sales readiness of their frontline.
In addition to this, analyzing customer experience, employee satisfaction, and disruptive business models have become critical to retaining and growing market share in these markets. In all trends driving the industry in 2021, the frontline executive is the cog in the wheel. They not only determine how data on consumer preferences and patterns reach organisations but are also key to enhancing satisfaction and delivering a superior customer experience. The digitalization of consumer behavior requires a shift to the digitalization of the sales representatives enablement experience as well.
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