6 Trends Shaping the Consumer Packaged Goods & Retail Industry in 2017

January 25, 2017

By Brian Carboni

Competition between brick-and-mortar retailers and online companies seems to be as robust as ever.  Looking forward to 2017, here are six trends shaping the Consumer Packaged Goods & Retail Industry:

1. The Wired Consumer:  The era of the connected consumer is in full swing.  With the ability to access product data and go shopping with the swipe of a finger, the shopping trip as we knew it has changed forever.  Both online and brick-and-mortar retailers will need to consider how to keep pace with this consumer.  Understand how these consumers want to shop will be absolutely critical.  We expect designing the shopping experience around the connected consumer will be the standard moving forward.  As such, leveraging technology to help design store experiences will be critical.
2. The Shift from ‘Wealth to Health’:  There has been a global shift to products and services that aim to help consumers live a healthier and smarter lifestyle.  From fitness trackers to gluten free foods, consumers are more invested emotionally and intellectually with the brands they buy.  With finger-tip access to an incredible amount of ‘big data’, opinions, and reviews, consumers have likely formed a data-based opinion on your store or your product before ever coming into physical contact with it.  Demonstrating to the consumer how your products can help them live a more sustainable life…they are willing to pay more for your transparency.
3. Built-for-Me:  Customization is all the rage.  Just look at the success of Coca-Cola’s ‘name on the bottle’ promotion as example A.  Or soda fountain dispensers where consumers can dial up their own customized mix of flavors.  Or being able to quickly select the gluten-free option for a snack.  Consumers now fully expect a brand experience that matches their particular tastes and preferences.  In fact, brands that offer personalized experiences enjoy a 50% higher loyalty rate.
4. Supply Chain Agility:  The winds of consumer trends are blowing very swiftly.  To keep pace, companies will need supply chains that are agile and flexible enough to deliver innovation the meets the high bar on quality, while moving fast and keeping costs down.  Forecasts will also swing as consumer preferences shift, and your supply chain will need to solve complex planning puzzles in real-time.   As the innovation in Private Label brands continues to increase, brands will need to accelerate their own innovation to defend both shelf space and premium costs.  And don’t forget that today’s consumer is likely to dictate when and where they receive their product, so solving the ‘last mile of distribution‘ will also be critical to delivering improved value.
5. Globalization and Regulatory:  Two forces are at play here.  On the one hand, you have the pressure to seek topline sales, which leads many companies to race to launch in more emerging markets around the globe.  BUT, each region tends to have very different regulations for products.  An ingredient in a formula in Western Europe may not be allowed in India.  A claim made on packaging in the U.S. that is compliant with FSMA rules, may be invalid due to regulations in Australia.  CPG Brand manufacturers will need to manage all the regulatory complexity around the world as they accelerate launches to grab market share and meet fast-moving consumer trends.
6. Sustainability:  Plain and simple, consumers care about sustainability.  In fact, they are willing to vote with their wallets on products they feel deliver on sustainability.  One key area this will affect is packaging. Brands will need to invest in innovative packaging options in order to deliver the types of materials and convenience desired by today’s consumer.  One way to find a sweet spot between the amount of material used, durability and cost will be the in silico testing of materials before any costly prototypes ever need to be developed.

The consumer packaged goods and retail Industry never seems to sit still, which continues to make it interesting, challenging and rewarding.  2017 should be another year of change as the expectations of the consumer continue to rise and the pressure to innovate within the industry continues.