With pandemic restrictions lifted and businesses reopening in physical places, there is cautious confidence that the world will return to anything more "normal" by 2023. Having said that, certain trends, such as remote work culture and ongoing eCommerce demand, are here to stay.
The same may be said for consumer packaged goods (CPG) brands. Changes brought about in the last two years in reaction to COVID-19, shifting demographics, supply chain disruptions, and other factors will be relevant well into 2023 and beyond, and new patterns emerge daily. Some of the CPG Industry Trends, according to Strategy Here, a secondary market research company, are as follows :
Consumers return to in-store shopping while embracing E-Commerce
Consumers are returning to in-store shopping as COVID-19 vaccines become more widely available and social distancing recommendations and masking regulations are gradually phased out. Forrester predicts that 72% of retail purchases in the United States would still take place in physical locations in 2024, owing to shoppers' need to test things in person and walk away with an item after purchasing.
However, according to a consumer market opportunity analysis survey, 83% of customers anticipate shopping online as much or more after the epidemic as they did before its peak. Furthermore, digital CPG sales are expected to account for nearly 10% of the US CPG market by 2023, growing from 4% to 5% in 2019.
Brands go green, but customers are wary of greenwashing
Consumers are more ecologically conscious than ever before, and their shopping habits are reflecting this. Over the last five years, according to various consumer market opportunity analysis, 85% of consumers worldwide report changing their purchasing habits to be more environmentally friendly. As a result, an increasing number of firms are aiming to invest in more sustainable practices, such as the elimination of single-use plastics and the development of circular supply chains.
While "becoming green" has undoubtedly become a major CPG trend with tremendous upside, it is critical for companies to avoid greenwashing. Greenwashing not only harms businesses' bottom lines; it has also been shown to mislead and create distrust among consumers, increasing their probability of avoiding and criticizing a brand's products.
Bringing the store right to the consumer’s doorstep with delivery services
Direct-to-consumer subscription services will continue to increase in popularity as work-from-home becomes the norm for many enterprises, with the so-called "subscription economy" predicted to reach $1.5 trillion by 2025. While consumers appreciate the ease of direct delivery services, marketers can:
Create predictable recurring revenue
Increase engagement by collecting first-party data and offering customized product selections
Improve customer interactions
Engage in constant product and service innovation
Try out limited-edition drops
One of the most difficult aspects of running a CPG company is inventory management. This is particularly true for marketers who must carefully balance marketing efforts with inventory levels. The last thing a client wants to see after they've decided to buy is an "out of stock" notification.
According to consumer market opportunity analysis, the number of firms producing limited-edition products has climbed by 12% since last year. More than half of all retailers now include limited-inventory drops as part of their strategy, with 40% of businesses doing so primarily to create a frenzy among customers.
Conclusion
The consumer packaged goods market is rapidly evolving. Every day, new CPG competitors emerge. Many incumbents are also trying to adapt to shifting markets, consumer behavior, and pricing methods. New technologies and consumer behaviors will continue to open up new prospects for both established companies and startups in 2023.
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