Consumer goods industry is growing at a very fast pace. In just a decade’s time, the industry has evolved like never before and the credit goes to our growing economy too. According to the The Millennium Development Goals Report 2015, back in 2000s, about 30 percent of people in developing countries lived in extreme poverty, compared with less than 15 percent today. Only 12 percent of people owned a mobile phone. These and other developments have led to change in consumer’s live, think, and shop and the changes are only going to accelerate.
The upcoming trends in the industry can be divided into five categories — the changing face of the consumer, evolving geopolitical dynamics, new patterns of personal consumption, technological advancements, and structural industry shifts.
Changing face of the consumer
Middle Class explosion
As the income of middle class has gone up, their spending on their lifestyle have also risen. Indian household saving rates have also leapt. In the eight years from 2005 they virtually tripled as more were lifted out of poverty and found themselves with disposable income for the first time.
Milennials taking over
Many experts predicted that by 2020 millennials would become the target consumer to go after, with this generation spending an estimated USD 600 billion each year. The brands and retailers are connecting with millennials. In fact, millennials are forcing brands to start thinking differently about the ways they market to and communicate with this generation.
Shrinking household size
Shrinking household means rising living standards. The way we live, shop, eat, store and cook food all has changed.
New patterns of personal consumption
Focus on health and wellness
Consumer good industry have a huge opportunity to enrich consumer lives by supporting the health needs that influence their in-store purchasing. Many retailers across all channels have already seized the opportunity by using health and wellness as a growth strategy, focusing on initiatives like offering health foods in the center of the store and opening in-store retail clinics.
Demand for customization
As the demand for customization in consumer products is growing, the simple fact is that we’re no longer forced to buy an off-the-shelf product that isn’t quite right. Add to that the rise in e-commerce competition and peer-to-peer portals offering authentic, tailor-made experiences, and the future of retail is evolving.
Focus on shopping experience
Customer’s shopping experience has become quite pivotal. It is an area that needs constant nurturing and care and, with a greater focus on customer experience strategy, companies will realize a positive impact on customer loyalty, higher retention and increased revenue growth.
Evolving geopolitical dynamics
Rising labour and commodity costs
India is faced today with one of the most critical economic situations. At no other time did Indians witness the horrible phenomenon of spiraling prices. Inflationary pressures are doing plenty of mischief.
Now, many consumer goods companies are are working to lower their carbon emissions, prepare for the effects of global warming on their supply chain and respond to growing environmental consciousness among customers.
Advanced robotics systems will bring a change in the industrial operations. Compared with conventional robots, advanced robots have superior perception, integrability, adaptability, and mobility. These improvements permit faster setup, commissioning, and reconfiguration, as well as more efficient and stable operations.
AI’s potential for consumer products companies will Improve efficiency and enhance customer experience. Without it, it was hard to understate the impact of artificial intelligence (AI) on the consumer products industry. Never before could companies gain so much insight into their customers – and use that knowledge to create intelligent solutions.
Digital profiles are fundamentally giving a shape to both consumer demand and competitive dynamics again in the consumer products marketplace. At the same time, these digital innovations are restructuring how consumers shop for and buy products. In an era of fast-changing consumer profiles and behaviors, companies must strive for a thorough understanding of what consumers want and are willing to pay for, and systematically use those insights to inform the evolution of products and brands.
Structural Industry Shifts
This new trend in sales will offer significant opportunities for DTC retailers and wholesale brands to better control their supply chain operations by cutting out the middleman, or retailer.
*The writer is, Amrinder Singh, Director, Bonn Group of Industries.