A great digital experience and an even better price are high on the list for consumers.
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5 min read
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The consumer goods industry has historically been very volatile. Consumer tastes can change quickly, and fads come and go on a regular basis. Regardless of the industry they are in, it is important that companies stay abreast of market trends and make the necessary adjustments to keep their products in the focus of consumers.
2020 was a very dramatic year in several ways, and its specifics have had an impact on the consumer goods industry as well. Whether you are an investor or an entrepreneur, there are three trends to keep in mind as you shape your future business strategy.
1. Price sensitivity
A recent Deloitte report shows that while governments around the world have made efforts to stimulate their businesses from tax cuts to mail checks, the economy continues to be dire for most people – and the recovery is not was fast as we had hoped. As a result, people are now more price conscious, which means that companies need to prove beyond doubt the value of their products in order to get people to buy. The negative impact on luxury goods is also compounded by global travel restrictions. According to this McKinsey report, 20 to 30 percent of industry revenue comes from consumers who make luxury purchases outside of their home countries. Sales of luxury goods this year have fallen by up to 70 percent compared to 2019.
Yassine Lamari, CEO of Gentleman & # 39; s Guru, says there are several strategies open to companies selling luxury goods, but aggressive discounts to increase sales could be counterproductive in the long run. “Once prices have come down significantly, it can be difficult to raise them again. The better approach is to retool the marketing efforts to demonstrate the value of the products and make sure customers understand that, while the goods cost more, the quality makes them worth the price. "
2. Switch to digital
The transition to digital is not a new phenomenon, but it has accelerated at an unprecedented pace this year as physical visits to stores have become less practical or even impossible due to movement restrictions. In the U.S., e-commerce now represents a $ 155 billion market, an estimated 6 percent of total retail sales. In the UK, up to a third of adults say they regularly look for food online. The same applies to clothing in Germany. In China, the online retail market has more than doubled in each of the last three years.
Related: 5 Digital Strategies Every Business Should Implement Right Now
With the restrictions gradually being lifted, people are still reluctant to congregate as they did before, so it will likely take a long time for the traffic in the store to return to the levels it once was. For consumer products companies, this means they need to focus on the digital aspect of customer acquisition and retention to survive by optimizing their social media marketing and making the order and delivery process as seamless as possible.
3. Sustainability and health awareness
While people have always been concerned about their health and the environment, the attention paid to these issues has skyrocketed recently. Consumers are increasingly concentrating on buying items that are produced sustainably. Health and fitness have become major concerns for consumers. Businesses have begun to respond to consumer demands for greater responsibility in manufacturing, marketing, and other business aspects. According to this Deloitte survey, 98 percent of companies said they were reformulating at least part of their product portfolio to adapt to new health and wellness guidelines. In addition, 79 percent of companies said that 81 to 100 percent of their food and beverage products contain important nutritional information on packaging.
"People these days are much more aware of what they're putting into their bodies," says Rashad Hossain, CEO of RYZE Superfoods, a company that makes mushroom-based coffee as a healthier alternative to regular coffee. “This year's events have put the need for health and sustainable living into the focus of more people.” Rashad, a 2016 Harvard graduate, founded his company at the start of the pandemic and said, “Consumers are now more health conscious than ever previously, and we've seen this in the demand for healthier alternatives to staple foods for so long. "
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It is clear that in a few years time the consumer goods industry will be very different. The difference between the companies that will succeed and those that will fail is the ability to deliver a smooth, intuitive digital experience that enables customers to purchase goods that suit their needs, but also their ideals and this at prices that satisfy their needs in order to obtain good value for money.