consumer products industry trends
She has extensive global experience, having implemented transformation programs in 17 countries. Fashion/home. By highlighting these uncertainties, we hope to not only provoke leadership team discussion, but also bring about action. Further, it lays the foundation for many new trends that will become increasingly important in the near f… Other last-mile delivery services are also emerging in the grocery and general retail space.10 Of note to consumer product companies is that some retailers have reported incremental sales through the online delivery channel.11 Preparing for this undercurrent is important: Recent research suggests that many packaged goods companies may be less prepared to capitalize on digital commerce than they should be—or than many consumer product executives would like to be.12 In a 2013 study comparing consumers’ and CPG executives’ views on e-commerce, 92 percent of CPG executive respondents agreed with the statement, “The e-commerce channel is a strategic sales channel for CPG companies.” Yet only 43 percent of these same executives thought that their company had a clear, well-understood digital commerce strategy, indicating a substantial gap between e-commerce’s perceived importance and consumer product companies’ readiness to execute. With more than 3,600 professionals in the Consumer Products practice, Deloitte delivers insights on the latest consumer product issues, effective practices, technology, and operating procedures, serving companies across multiple categories including food and beverage, apparel and footwear, personal care, and household products. The undercurrents in play place stress on the consumer product company’s traditional sources of competitive advantage—scale, brand loyalty, and retail relationships—and the operating model that many of these companies are built on. The rapid pace of change necessitates companies to move quickly and completely in a coordinated way. The remaining 120 executives worked in other consumer-focused industries, including commercial banking, travel, hospitality, automotive, and consumer electronics. As we look towards the next decade, the consumer products industry will continue to feel the impact of an evolving global economy, a shifting geopolitical landscape, and changing consumer demographics and expectations. Companies may undergo a major shift in their brand management approaches, their relationships with suppliers and retailers, and their business practices along the entire value chain. Partner, Consumer Products Industry Leader Email Twitter LinkedIn. Ltd). For instance, in 2012, the company met its goal to improve operational water use efficiency by more than 20 percent per unit of production over 2006 levels. See something interesting? In 2014 alone, there were eight weather and climate disaster events across the United States.16. Organizations can focus on these consumer goods industry trends to plan for uncertain times. Consumer product companies should consider taking steps to guard against being thrown off their charted course by these undercurrents—or they may find themselves capsized by a future that takes them by surprise. Nidal Haddad, "The intuitive enterprise: Enterprise-wide change is necessary to leapfrog to an intuitive enterprise," Deloitte, http://www2.deloitte.com/us/en/pages/consulting/articles/the-intuitive-enterprise.html, accessed June 22, 2015. Discover Deloitte and learn more about our people and culture. Social login not available on Microsoft Edge browser at this time. Technology can also allow consumer product companies to pursue greater collaboration with retailers, shopping-related application providers, and payment companies. The economy will likely continue to stagnate, and may give rise to increased income bifurcation, middling level of consumer confidence, and a struggling middle class. The research described in this article is based on 14 case studies conducted between June and December 2014, an executive survey conducted in August–September 2013, consumer surveys conducted in January 2014 and January 2015, and seven executive interviews conducted between July and November 2014.3 The executive survey polled 205 US executives and senior managers; the consumer surveys, over 4,000 adult US consumers. Challenge to current model: The value of mass-production economies of scale is undercut by new business models based on customization and delivery of individual units. These potential undercurrents are not mutually exclusive. Liquid Hand Soap Market 2020-2024- Featuring Colgate-Palmolive Co., GlaxoSmithKline Plc, Godrej Consumer Products Ltd., Among Others to Contribute to the Market Growth | Industry … While the future of retail and consumer products holds great uncertainty, a thorough look at data and macro forces reveals some important themes for the industry. The downward trend in profitability for both big and small players suggests the need to revisit the relevance of traditional R&D and innovation models. Measured by return on assets (ROA), the consumer product industry’s median profitability has trended downward over the past 30 years (from 5.8 percent in 1980 versus 3.7 percent in 2013).1 While the bottom quartile of consumer product companies has suffered the most (1.9 percent ROA to a negative ROA of -5.6 percent), top performers are also slightly less profitable than they were before: Top-quartile ROA performers’ ROA fell from 9.2 percent to 8.1 percent.2 In other words: Collectively, the industry has lost steam. Consumer Products Insights From product innovation to retail consolidation, Bain Insights provide fresh analysis on this changing market. In this rapidly evolving, low-growth, and margin-compressed environment, clear strategic direction and coordinated efforts are not all that should be pursued. Executive and senior manager respondents’ roles and titles reflected a broad range of experience in operations, finance, sales, information technology, marketing, and general management. Almost half of US consumers have stronger preferences for brands and products aligned with the shifting value drivers of health and wellness, safety, corporate citizenship, and transparency, and the data suggest that this preference is not isolated to Millennials and high-income segments.7 Some consumers are becoming increasingly aware of corporate values and placing more emphasis on the role of the company within the community. “The ad-hoc and relatively uncoordinated commodity strategies of the past have left us underprepared for the higher uncertainty we face.”—Packaged goods finance executive The fifth uncertainty posits commodity cost increases and higher cost volatility for key food and beverage inputs. Yet preparing for an uncertain future in 2020 is particularly difficult. Second, retailers seemed more focused on technology-related areas, such as social influence and digital marketing, than the consumer product respondents were. Do not delete! If changes are not made in the near term to enhance and fully scale up the capabilities of both your organization and your people, you may reach a point where both your ship and your crew will be irrelevant—precluding the possibility of smooth sailing into 2020 and beyond. Also, 50 percent of consumers were willing to pay more for a brand if it communicates its commitment and efforts to improve food safety. The digital transformation of all industries has been accelerated due to challenges such as radical demand shifts, supply chain reconfiguration, seasonal workforce interruptions, and the repurposing of manufacturing capacity. Speed of execution and completeness of action are just as important, if not more important, to consider. One major trend we are seeing right now with consumer technology is the demand for now and more. . Consumer 3D Sensing Products Market 2020 – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2019 – 2027. Because no one knows exactly how marketplace dynamics will eventually play out over the next five years, consumer product companies should be prepared to operate amid uncertainty. Explore BCG’s latest thought leadership on consumer products to plan your company’s next move. The consumer segments that were more likely to associate natural and organic with food safety include individuals or households with allergies, families with children, and 21–29-year-olds. Decisive action along the lines we have discussed could be key to helping your organization meet the challenges it may face in the journey to 2020 and beyond. Her clients span the food & beverage, personal care/household goods, agriculture, and white goods segments. Consumer Electronics Market size valued at USD 1,100 billion and is expected to register over 3% growth between 2017 and 2024. Increasing penetration of smartphones across the globe is expected to drive the market growth. Kim Porter, Additionally, recent social media listening research indicated that when consumers talk about food safety in the United States, only 14 percent of the discussion is about basic food safety, while the rest is about a broader set of topics, such as health and wellness.43 Within the health and wellness and food safety discussions, a significant number of posts were about transparency (8 million posts) and sustainability (2 million posts). The likely consequence: More frequent shortages of natural resources, including water, will cause more supply chain disruptions. Evolving environment, key trends powering growth in a broader sense about in! Retail, consumer demographic shifts, changing consumer preferences, and white goods segments expected among groups... 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