Consumer product trends
Consumer product companies face a confluence of rapidly evolving technologies, consumer demographic shifts, changing consumer preferences and economic uncertainty. How can they prepare for the challenges ahead?
The Deloitte Consumer Tracker shows outlook for consumer activity in the UK in 2016 remains largely positive with low inflation, low interest rates, rising wages and declining unemployment supporting consumer spending power. The UK consumer has so far shrugged of global issues such as the slowdown in China, the falling price of oil and an interest rate rise in the US. But what can consumer product companies do to capitalise on the opportunities created by the changing patterns of demand in the global marketplace and face the challenges that lay ahead? The report explore five undercurrents that may impact the consumer product industry in 2020.
The five undercurrents include:
- Undercurrent 1: Unfulfilled economic recovery for core consumer segments in the West where the middle class continue to be squeezed as opposed to the growth of the middle class in the emerging markets.
- Undercurrent 2: Health wellness and responsibility as the new basis of brand loyalty. Emotional ties to national brands will likely decline due to growing consumer discontent with large companies’ perceived values coupled with an increased consumer focus on personal health, the environment, and social impact.
- Undercurrent 3: Pervasive digitisation of the path to purchase. Concurrently new marketing channels to reach consumers, the convergence of sales and marketing environments, and the growth of disruptive retail models emerge. Traditional brick- and- mortar business models may be dismantled as consumers fully embrace digital.
- Undercurrent 4: Proliferation of customisation and personalisation. Consumer spending will likely shift toward customised products and experiences across a broad range of consumer products.
- Undercurrent 5: Continued resource shortages and commodity price volatility. The cost and cost volatility of key packaged goods inputs will likely continue to increase.
In the report we chart the course to success and explore client examples of how companies are already embracing and navigating through these challenges.The report builds on the research originally conducted in the US market – see Navigating 2020 by Deloitte University Press.
To help executives plan and act amid these undercurrents, five sets of specific steps have been developed to address each of the five potential uncertainties.
Navigation aid 1: Revisit product portfolio, pricing, promotions, and merchandising.
Navigation aid 2: Align offerings and engagement strategies around consumer interests and values.
Navigation aid 3: Create seamless experiences via technology and collaborations.
Navigation aid 4: Develop processes and business models to allow for customisation and consumer interaction.
Navigation aid 5: View commodity decisions with resource preservation and social impact in mind.