It’s no surprise that price is at the forefront of consumers’ minds when considering purchases within the Fast Moving Consumer Goods (FMCG) space. Elevated cart totals and empty shelves in stores have consumers revisiting their shopping behaviors, especially for routinely purchased products like household goods. Price sensitivity continues to shape purchasing behavior, too, as consumers work to make ends meet.
Furthermore, many CPG organizations are pursuing innovations related to subscription models, automation, and digital trade promotion management (TPM) to continue to reach consumers where they are. The consumer is also becoming better educated on their multitude of product options and to what extent a given manufacturer’s ethics align with their own. With all these complex factors at play, the key to success remains surprisingly straightforward: ensure your organization’s energy and investments remain deeply rooted in meeting consumers’ needs.
2023 FMCG Trends
Trend #1: Pricing to remain front and center as consumers cope with inflation
Consumers are looking for innovation in the face of increased price sensitivity. They seek value to inform their purchasing decisions and to regulate and maximize personal budgets. The household items category is a place where the consumer wants to secure small wins and feel confident they’re making the best financial choices. Naturally, inflation affects both the consumer and the manufacturer, as higher costs of goods erode increasingly tight margins. However, these tighter margins ultimately cannot cause added pain to the consumer. Due to price increases among the go-to labels, consumers are increasingly gravitating toward private-label products to further stretch their dollar.
Strategic investments in supply chain systems can ease this dynamic and can shepherd heightened efficiencies. Manufacturers that make the right investments to maximize these efficiencies will be able to pass the increased value directly to consumers.
Consumers are choosing products based on perceived value, shelf life, and usage efficiencies as well. Products marketed as having multiple functions are perceived to have a higher value in the mind of consumers—whose dollar needs to be stretched as far as possible. The “creation” of a multipurpose product does not necessarily require redesign either. Manufacturers can often harness influencers and shape marketing messages to draw consumer awareness to new, innovative product uses.
Trend #2: Consumers look to DTC subscription models for convenience and cost savings
Subscription models within Direct-to-Consumer (DTC) channels are emerging to be both consumer-conscious and operationally efficient. Subscription models have typically been reserved for food, apparel, or luxury goods, but many consumers will be interested in receiving their household goods directly to their homes, in alignment with their other consumer goods purchasing habits.
For the consumer, subscription models offer greater convenience for those who don’t wish to shop in person. There is also real value added in having the flexibility of getting your household goods delivered to you when it’s most convenient for you.
This subscription model could also continue to reduce consumer pain points related to pricing by passing along cost savings that occur from ordering household goods in bulk. Especially on non-perishable items, bulk ordering and delivery look to ease consumer anxieties related to empty shelves both at home and in-store. These fears began with toilet paper and hand sanitizer during the beginning of the COVID-19 pandemic but remain present amid ongoing supply chain disruptions. As such, catering DTC solutions to both meet consumer demand and deliver increased value will continue to be key for manufacturers in 2023.
Trend #3: Automation to continue enhancing operational efficiency
The next area that companies should pay attention to in 2023 is specifically driven by advancements in technology. It should be no surprise that technology is again a key element of consumer goods trends, but automation is specifically the key for the upcoming year.
Automation requires smart integration between all production devices throughout every stage of manufacturing, enabling better inventory visibility and eliminating waste resulting from human errors. This can aid in cost savings and provide a sense of control over a complex system. Further, with automated data reports that leverage artificial intelligence and machine learning, companies can improve their automated systems based on the actual usage data from their manufacturing lines. This is also a benefit for consumer goods companies and manufacturers that are facing labor shortages, as an automated, data-driven system can offer unmatched operational efficiencies.
A connected, automated enterprise also benefits the customer experience, and 93% of companies are reporting that automation can aid in the ability for customers to engage with the products they are ordering. Automation is typically seen in self-service interfaces like shipment tracking, but additional use cases are emerging in the fast moving consumer goods space. Some examples include the automation of loading and unloading trailers, product customization to account for seasonality, and real-time inventory counting. Continue reading by downloading the full report below.
Read last year’s FMCG Trends Report here.