What 5 trends are shaping the consumer goods sector?
Just when everyone thought it would be back to normal after the COVID-19 pandemic, the Fast-Moving Consumer Goods (FMCG) industry remains beset by challenges. Higher fuel and energy prices, rising inflation and interest rates have taken their toll on consumer confidence – meaning industry players will have to stay agile to respond to their customers’ changing needs. We rounded up the five biggest trends shaping this sector right now.
By Vanessa Rogers and Katherine Graham on behalf of Executive Placements.
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Rise of omni-channel platforms
COVID-19 ensured that many technology-shy consumers happily made the shift to online shopping. South Africa’s biggest retailers invested heavily in their online-shopping platforms and saw a marked increase in online sales. However, not all retailers have managed to integrate their digital platforms with their physical in-store presence. This omnichannel approach is a good way to appeal to savvy customers who appreciate having the option of collecting in-store after purchasing online. It also means that your customer experience should be seamless across a range of channels, including social media avenues. Many customers who used to draw up shopping lists and hunt purposefully for specific products are now shopping passively online. They may be inspired to buy something by scrolling through your brand’s Instagram feed, for instance.
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Deterioration in brand loyalty
With the middle class taking strain, many consumers are no longer sticking to brand names. They are trading down by buying no-name brands and are extremely price-conscious, while eager to shop around and find the best deals. Many retailers are noticing that shoppers are now buying groceries monthly instead of weekly, with the busiest shopping periods being between the 25th of one month and the 7th of the next. Consumers are also delaying buying big-ticket items and are reprioritising their spending based on how much disposable income they have. This is evident in the slowing down of car, beer, wine and spirits sales, together with homewares as consumers cut down on self-care items and luxuries.
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Necessity of shopper-tainment
Just because consumers’ budgets are tight doesn’t mean they don’t want a first-rate experience when they walk into a store. As the jostling among online retailers is predicted to intensify after Amazon launches in South Africa next year, it’s essential that the in-store experience is magnified to differentiate each retailer from its competitors. Known as shopper-tainment, it’s all about making sure that your store is a destination shoppers are primed to visit.
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Why sustainability, health and wellness rank highly
Today’s shoppers are conscious of their impact on the environment. A recent global study showed that consumers are willing to pay up to 30 percent more for products that are rated as “sustainable”. Simultaneously, thanks to COVID-19, consumers are more focused on being proactive about their health and wellbeing. They’ve become disillusioned with the workaholic mindset and want to live increasingly balanced lives. To attract these customers, retailers will need to make their in-store shopping experience calmer and a lot more streamlined.
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Search for automation and data-integration skills
Data is the new gold for those in the FMCG sector. As digital processes replace manual ones, new niche FMCG jobs will open up for those who are able to analyse this data. Data-driven insights, from sales automation and field rep orders, make it easier for manufacturers to see how quickly their products are moving. Now more than ever, FMCG companies will need to embrace digital tools that allow them to access real-time data on shared platforms. Similarly, automating processes for consumers is also key. Online tools enable them to engage in their own self-service – by tracking shipments, getting answers to frequently asked questions and finding out about returns policies. These, in turn, elevate the customer experience and their ultimate perception of your brand.
Sources:
https://blog.usetada.com/en/what-will-the-fmcg-industry-trend-be-like-in-2022
https://businesstech.co.za/news/business/619097/south-africas-retailers-have-a-big-problem-a-declining-middle-class-under-pressure/
https://skynamo.com/industry-thermometer-2022/ https://retailbriefafrica.co.za/is-your-retail-business-ready-for-the-amazon-effect/
Consumers-Are-Willing-to-Pay-More-for-Sustainability-as-Demand-Grows-for-Environmentally-Friendly-Alternatives
https://www.salesforce.com/blog/consumer-goods-industry-trends/
