By Robert I. Tomei
The market is experiencing unprecedented changes in the way people shop and engage with categories, brands and stores. If you are a consumer packaged goods manufacturer or retailer, the future is promising…that is, if you are paying close attention to the major U.S. market trends driving the changes we’re seeing in CPG and aligning your organizations to take advantage of these changes.
While none of us can predict the future, we do know that the 2020 shopper will be driven by multicultural growth.In just one decade, from 2000 to 2010, the number of Hispanics in the U.S. increased 43%, and 70% of all Hispanics today are younger than 40 years old. In 2020, Hispanics will account for over 50% of the U.S. population growth
. Hispanic households tend to be larger in size and while brand loyal, they also are value conscious. Having a strategy for this multicultural audience is one of the opportunities to capture growth in the CPG industry over the next few years.
Life stage changes are another important trend that is already impacting the CPG industry and will continue to do so going forward. Consumption patterns correlate with age and while the share of the age 60+ market is expected to increase slightly (+3 points) by 2020, the real focus in the industry is around the impact of millennials. The dollar share of CPG for millennials is going to increase significantly, from 17% today to 29% by 2020
. Also, almost 40% of millennials are multicultural which makes the combination of these two trends in the consumer and shopper landscape such a tremendous opportunity.
Then, there’s the revolutionary impact of digital, social and mobile media and communication platforms, which gives shoppers more options, more information and, yes, more control. More and more people are browsing online before shopping in the store and using their smart phones to compare products and prices when they are in-store. While the traditional path-to-purchase for consumer packaged goods is still relevant for some categories and certain segments of the population, you can bet that digital is already influencing and disrupting the traditional shopper journey and this will only accelerate over the next few years
. The new shopper journey with multiple touch points provides CPG marketers with an enormous opportunity to engage and influence their key consumers along this new path-to-purchase. This new engagement opportunity is right now!
It is important that both manufacturers and retailers fully understand their position among the rapidly emerging segments of the population (multicultural, millennials), fully understand the touch points of the new shopper journey, and develop strategies to ‘win the shopper’ in this dynamic and exciting new marketplace.
So, how can you better leverage the changing shopper journey and prepare for 2020?
- Adopt digital, social and mobile communication platforms to fully understand your key consumers and shoppers in order to better meet needs of convenience, speed, and savings throughout the path-to-purchase. Brick and mortar retailers are a powerful asset, especially as CPG e-commerce develops by offering shoppers the convenience of store pick-up and/or home delivery. At the same time, many shoppers still prefer to see and touch products, like to browse in-store, have a need that requires immediate fulfillment and/or are not interested in paying delivery costs. However, stores can be much more creative in how they leverage their relationships with their customers by using digital, social and mobile platforms to drive them into the store and stay connected with them after their store experience and/or usage of products.
- Keep it simple, relevant and moment-specific. There is no such thing as a
simple, one-size-fits-all marketing and sales strategy in today’s rapidly changing marketplace. CPG marketers must first understand their consumer and shoppers (particularly, those new segments that are emerging), and leverage digital, social and mobile media communication platforms to connect with them along all the touch points in the new shopper journey – and then develop strategies to ‘win the shopper’ in a direct and simple manner. Today’s consumers and shoppers want clear benefits and streamlined approaches in order to get what they need and when they need it. Make things quick and easy, and provide them with relevant information at all the different points in their shopping journey that is customized to their needs.
- Make retailer and differentiation a priority. CPG marketers that recognize these changes and align their companies to take advantage of all the information available, the multiple touch points (at home, on the go and in-store), and can directly engage their consumers and shoppers via digital, social and mobile communication platforms along the new shopper journey, will be organizations that win the marketplace.
The opportunity is now!