Back in 2010, Clarkston introduced our Speed & Agility Index, which identified that consumers are becoming hard to predict, making successful product innovations harder to anticipate and sales harder to forecast for consumer products (CP) companies. The speed with which companies are able to adapt had become the single most important enabler of success. As we fast forward to 2017, that premise about consumers holds true, as they are more educated, more connected, and more engaged than ever before.
Both consumer products manufacturers and retailers are being challenged by an unrelenting pace of change within the CP industry. These consumer dynamics are requiring that companies redefine tried and true business processes, channels of distribution, and strategies for growth. While consumers are still difficult to predict, the key competencies required to realize competitive advantage in the consumer products industry change every year.
In our 2017 Consumer Products Industry Perspective report we assess the changing face of the consumer, the evolution of growth, and the key competencies for a modern consumer products organization.
Changing Face of the Consumer
Shoppers and consumers are changing. Consider these statistics:
- Consumers over 60 years old make up 12% of the population and they are expected to reach 17% by 2030;
- Millennials account for 24% of the US population and have made a major impact on consumer behaviors;
- Generation Z accounts for another 24% of the US population and by 2020, this digitally savvy generation will represent 40% of all consumers; and
- 82% of shoppers consult their mobile device on purchases they are about to make in store.
The Evolution of Growth
By definition, consumer staples are considered to be non-cyclical, however the changing face of the consumer is causing disruption of growth, even for these consumer staples. Consider these quick facts:
- The CPG market grew by more than 4% over the last 12 months and there is a shift in market share from large to small and mid-sized companies;
- CPG e-commerce sales have risen 42% and is estimated to surpass $10 billion this year; and
- Over the last 12 months the consumer healthcare market has grown by 7%.
Key Competencies of a Modern Consumer Products Organization
Based on our conversations with our clients and industry experts, we see the following areas as critical investments for consumer products companies to deliver profitable growth in the years ahead.
- Strategic Innovation
- Sales & Marketing Alignment
- E-Commerce and Digitalization
- Integrated Planning
- Revenue Growth Management
- Actionable and Focused Analytics
- Quality and Regulatory Compliance
Download our PDF for the full 2017 Consumer Product Industry Trends report and find out more about the key statistics in this post.
To see more about these key competencies and why they are critical to the modern consumer product company, watch the video below.