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If you think that CPG is changing rapidly, be prepared. The incredible changes to CPG marketing and consumer behavior are unlikely to slow down any time soon. CPG marketer Cheryl Maduzia is in firm agreement, stating “the rate of change today is likely the slowest...for the remainder of our careers.” In other words, it’s going to be a very wild ride.
Marketers are well-aware what’s to blame for the current rate of industry disruption. Consumer adoption of mobile and social technology has changed the way people discover and connect with brands. Improvements in the quality of store brands and stagnant consumer spending have directed dollars from name brands to generic products. When coupled with demographic shifts, a new focus on health and wellness, and changes in retailers, it’s a recipe for rapid change.
While it may be relatively simple to determine why the industry is in a state of flux, determining what’s next is a bit more difficult. Even experts can only speculate at the emerging trends that matter most. However, foresight can certainly prove valuable for CPG brands who are continually working to refine and reposition their promotion methodologies. Join us as we review three trends to pay attention to.
Finding growth can be challenging for well-established CPG brands. ITC compares the current state of small brand disruption to “David taking on Goliath.” Major organizations who have struggled are putting an increased focus on innovation, to combat “local brands taking center stage.” This trend can be attributed to a number of driving factors in consumer behavior, including increased interest in local foods, growing distrust of major brands, and focus on health and wellness.
For brands of all sizes, deep customer knowledge and continual innovation are going to be key to successful growth hacking. Researcher Patrick Dolan believes that analytics will play a key role in this CPG trend. He writes that the companies who succeed will be those that have the “ability to leverage data to garner insights into customer trends, tastes, and buying patterns.”
In/Store and Digital Hybridization
Consumer interactions with brands don’t always originate on the grocery shelves. Today’s consumers can use a vast array of channels for product discovery, including recommendations from bloggers or vloggers, social media, forums, mobile applications, and more. This concept is known as “channel blur,” which refers to the increasingly fine lines between digital and in-store shopping experiences.
Brands must discover ways to increase their digital presence, and provide innovative digital experiences in-store in a way that’s convenient to modern consumers. Mobile food labeling is one example of this trend in action. By offering on-pack codes for shoppers to scan with their smartphones, brands can deliver innovative content on their products and recipes while the customer is still located in the shopping aisles. Cash back offers, complimentary product suggestions, and other factors could be key to winning customer loyalty.
Experts predict that grocery retailers could lose 10% of their sales to online food retailers over the next decade. Millennials may be most likely to use grocery delivery services in lieu of trips to the supermarket, due to a generational perception of grocery stores as “old school and unpleasant.”
Consultant Jeff Gell writes that CPG brands must strive to establish a presence on online shopping venues as quickly as possible. “You need to be present where consumers are buying online.” What’s less clear, however, is just how online shopping could impact CPG branding and marketing strategies. User-generated reviews and search rankings could be the new shelf placement.
Innovation and early adoption are going to be critical for brands to survive some of these emerging CPG trends. As brands of all sizes create channel blur and strive for faster innovation, there’s going to be no choice but to keep up. By working to create cross-platform digital experiences, develop a strong presence with online shopping retailers, and create new products in real-time, CPG brands can ensure these trends work to their benefit.