5 consumer product trends that innovative leaders should watch
The next wave of consumer product trends is already here. According to the Financial Post, firms are facing weak growth due to high unemployment, flat incomes, increasing market share for deep discounters and the growing popularity of low-cost solutions. They are under immense pressure to demonstrate their unique value and build stronger relationships with consumers.
The Boston Consulting Group says the evolving digital landscape can help consumer packaged goods (CPG) brands discover, reach, engage and retain target audiences on a personal, rather than a mass-market, level. Here are five consumer product trends that every corporate innovator must watch:
Millennials will spend $65 billion on consumer packaged goods over the next decade, according to a white paper by WPP subsidiary Geometry Global featured in MediaPost. This demographic is research-driven, often looking up products ahead of time and using mobile apps in stores. For them, shopping is a highly individualized process. That's where data enters the picture. CPG brands are amassing a wealth of information about their millennial customers via social media, search, mobile apps, point-of-sale systems, loyalty programs and paid advertising channels. One of the biggest consumer product trends comes from the opportunity to reinvest this data.
2. Investment in first-party data
Thanks to techniques like programmatic advertising, CPG brands are well-positioned to reach audiences and influence brand perceptions at scale. First-party data can be used to ensure that experiences remain relevant and custom-tailored to individual shopping experiences. Clorox is an example of a brand that is capitalizing on this opportunity. "The opportunities for layering on the data to understand who is interacting with our brands and when is not only helping us reach our targets, but redefining them," said Erika Lamoreaux, associate director of digital media strategy at Clorox, in an interview with eMarketer. "That will lead to opportunities to do more with the creative — to have more tailored messaging in a real-time media environment."
3. New consumers in emerging markets
According to McKinsey, the global middle class will add 1.4 billion people by 2020, 85 percent of which will be in the Asia Pacific region. Emerging countries such as China, India and Indonesia are expected to increase their growth share from 18 to 30 percent in the next decade. CPG leaders can prepare for these trends by analyzing patterns in each market's unique ecosystem. The William Wrigley Jr. Company, famed chewing gum producer, for instance, has already achieved a 40 percent market share in China. The company regularly launches products that are specific to Chinese consumers, develops presences in markets where these consumers regularly shop and provides extensive education regarding chewing gum's health benefits.
4. The need for speed
With time becoming an increasingly scarce resource, today's consumers are driven by faster, better and more efficient solutions. According to a recent consumer trends survey from Datamonitor, millennial consumers are more likely to make purchase decisions based on quick results than their boomer counterparts. These consumer product trends can influence two key areas: packaging and positioning. A decision as simple as creating a spray bottle, for instance, could amplify sales.
5. Direct-to-consumer sales
Thanks to digital channels, CPG brands have a means to build direct sales channels with target audiences. As of 2013, 52 percent of consumers were already buying directly online from brands that they trust, a PwC study reported in RetailWire found. Procter and Gamble, for example, has been at the forefront of these direct-to-consumer channels through its e-store, pop-up stores and engagements with third-party platforms. Moreover, these direct-to-consumer channels give CPG brands an opportunity to test new products before distributing them to store shelves on a national level. This opportunity can mitigate potential risks of overproduction, packaging errors and lackluster product-market fit.
The next wave of consumer product trends are opening doors for experimentation, innovation and growth. As a result, corporate innovators are often facing more questions than answers. Data can help kickstart the exploration process. Brands should look no further than their user behavior data.
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