Rapid periods of disruption and acceleration defined 2020 for many consumer products businesses. The ramifications of the COVID-19 pandemic, the racial justice movement, 2020 elections, and more spurred massive shifts in consumer behavior that will continue to ripple and grow into 2021 and the years to come.
The 2021 Consumer Products Trends Report addresses 8 consumer characteristics and trends with the greatest impact to the industry. Each inextricably links to the others, requiring that businesses take a holistic and cross-functional approach in order to effectively address them
TREND #1: Prioritize Health and Wellness
Holistic health remains a top priority for physical and mental wellness to support a healthy lifestyle.
For years, consumers have become increasingly discerning regarding the products they buy and use. More specifically, consumers are hyperfocused to the impacts that products – of any type or category – have on health and wellness. In fact, a study by advertising giant Ogilvy confirmed this, showing that 73% of consumers believe that wellness is an essential part of any brand’s strategy – regardless of the segment.
Addressing this trend in years past was relatively simpler. Today’s consumer is incredibly savvy and has a much more nuanced understanding of their wellness and how the products they use can impact it. The health concerns of the consumers of yesteryear were appeased with simpler tactics, e.g., lower calories, less cholesterol, etc. Today’s consumer, however, approaches health and wellness more holistically. They’re looking for brands that can drive improvements across nearly every dimension of wellness from gut health to mental health to their immune system and beyond.
In dozens of ways, this shift in consumer behavior was even further accelerated by 2020’s COVID-19 pandemic. As the pandemic ravaged the globe, consumers were inundated with health-related headlines and news alerts nearly constantly, feeding the growing health trend considerably. Widespread lockdowns have also led to more people cooking at home and experimenting with healthier ingredients. Plant-based protein, for instance, experienced a 231% increase in grocery sales from 2019 to 2020.
TREND #2: Seek Value and Convenience
Cost-conscious consumers are increasingly willing to buy private label & locally-sourced products.
With more frequency, consumers are weighing value and convenience as the chief drivers in purchasing decisions. Years of growing economic uncertainty and explosive growth in new digital channels have dovetailed, giving consumers the means to manage financial concerns by price shopping across brands via a variety of new channels.
Diminishing brand loyalty over the past decade has contributed to steady growth in private label. Private label accounted for 16% of the pre-COVID market and as a result of the pandemic, has experienced tremendous growth, outpacing national brands by about a third in both dollar and unit sales, according to Nielsen. Explosive COVID-driven demand caused supply issues for many national brands, inevitably driving consumers to purchase and try private-label products. Even as supply issues resolved, many consumers are continuing to purchase private label and will likely do so well into the future, owed largely to the highly accessible, low cost nature of private label products. Retailers are following suit and investing heavily in private label growth.
As COVID-19 has shaken the foundation of consumer confidence in the economy, the psychological impacts on consumer behavior will likely remain well into the future. Particularly as new generations rise in purchasing power – generations that are increasingly amenable to private label.