As goes the world, so goes CPG trends. With COVID-19 continuing to perplex organizations around the globe, placing people in lockdowns, closing national borders, and disrupting supply chains, the consumer goods industry has adapted, re-imagining how they do business – in many cases collaborating with competitors to meet the essential needs of the populations that they serve.
Some trends are fads, while others turn into the building blocks of the future. Which is which when it comes to current CPG trends? Let’s explore.
CPG trends: COVID and consumer expectations make CX crucial to consumer goods industry
The CPG trends for 2020 have been drastically altered by the advent of COVID-19. Following are the top trends that we’re seeing across the consumer packaged goods industry:
- Becoming a brand with purpose
- Tracking real-time consumer behavior to adjust supply and demand
- Proactively analyzing evolving consumer preferences and choices
- Sharing insights with wholesale and distributor channels
- Reimagining CX in a world after COVID
In the current pandemic, utilizing customer insights and feedback is crucial to maintaining the operational agility that’s needed to endure the crisis — and to serve all customers well.
Why purpose matters to the CPG industry
For some brands, sacrificing short term gains to help society has meant repurposing production lines – manufacturing everything from medical equipment and specialist protective clothing for front-line healthcare workers, to cleaning products and hand sanitizing gel. Others have made donations to charities, hospitals, and communities.
Working together, they’ve demonstrated how the CPG industry can be a force for good, delivering practical and empathetic responses when needed most. But predicting what happens next — in the medium and long term — means that CPG manufacturers must keep track of rapidly changing customer preferences.
CPG trends driven by COVID will remain in a post-COVID world
Consumer behaviors are changing rapidly, and sometimes daily as a result of COVID-19.
What they buy, where they buy, how much they buy — and how often — is shifting at an unprecedented pace. As the immediate crisis unfolds, CPG manufacturers will need to keep pace with how consumer mindsets are changing to predict what the new normal will look like, once the immediate threat to public health subsides.
The impact of the crisis on consumer shopping behaviors has been immediate and includes:
- Panic buying and stockpiling of essential items and household goods – both in-store and online – led to stock-outs and overstocks of items suddenly viewed as non-essential — like beauty, haircare, and cosmetic lines.
- A significant uptick in online shopping with consumers scrambling to secure grocery and other goods, demand for tinned and frozen goods escalated, as did demand for pre-prepared meals, comfort foods, and treats to cope with social isolation.
- A return to known, trusted, or favorite brands and store cupboard ingredients, with consumers showing limited inclination to experiment with new product lines.
- An increase in demand for in-store pickups or home delivery services — with consumers heading direct to manufacturer websites to source product.
- Changes to the frequency and basket size of both online and brick and mortar shopping trips.
Initiating contingency plans in the response to these short-term changes is just the start. As manufacturers scramble to adapt product categories and inventory to deal with the immediate massive peaks and troughs in demand, they will simultaneously need to be preparing strategies to retain and support customers going forward.
Guessing isn’t an option: Leveraging data insights to predict future consumer behavior and make better business decisions is a CPG trend that will stay
Tracking how customer behaviors evolve will be key to ensuring that manufacturers can continue to serve customers in the months ahead. For some consumers, the move to shopping directly with brands online is becoming an established habit — so building capabilities and capacity to enable this will be key.
Once COVID-19 passes, the categories and products some consumers shop may revert to pre-crisis norms. For others, how, where, and frequency might change again, with more frequent trips to local shops taking precedence over shopping at supermarkets.
Brands need to proactively analyze evolving consumer preferences and choices to ensure everything is in place to meet customer expectations, because these insights will ultimately impact which products they manufacture, how they engage with customers — and in which channels.
With the stakes this high, guessing isn’t an option. Today’s forward-thinking CPG players are accelerating real-time pulse checks on changing customer preferences and fusing the experience (X) data with operational (O) data to track how consumers plan on shopping in the future. They’re gaining the granular insights needed to:
- Better direct supply chains
- Initiate new distribution and sourcing models
- Boost how — and where — they communicate with consumers
A helping hand: Consumer goods industry will need to assist wholesale and distributor channels
Wholesale and distribution partners are also facing significant commercial disruption, and providing support for those channel customers will be critical — everything from initiating online and phone ordering services, to creating new product assortments based on availability and current demands.
To protect the channel and speed up recovery strategies for businesses that are currently closed, CPG brands will need to test customer sentiment. Solutions might look like providing free inventory or co-collaborating at a local level to launch ideas supporting a bounce-back.
Sharing consumer insights and intelligence will be the key to building strong partnerships based on loyalty, respect, and a deep business understanding. By re-imaging CX, brands will be able to support these customers and build the capabilities needed to accelerate preparations for the future.
The CPG trends of today are the foundation of tomorrow
Utilizing customer insights and feedback will be required elements to maintain the operational agility that’s needed to endure the crisis and come out strong on the other side.
By harnessing this data, CPG brands will be in a great position to safeguard their business and to cope with evolving demand patterns while identifying future potential opportunities to build deeper relationships with customers in every channel and boost long term brand affinity.
Brands are dealing with the challenges of today, but must also start preparing for what the future holds.
Current CPG trends that focus on the customer first will not only help brands recover, they’ll also establish the foundations needed to be ready for the future that emerges.