Monday, May 30, 2016

2016 Retail and Consumer Products Trends

Trend #1: Brand entrants are more focused

New micro, digital-only companies are flooding the market, riding on mobile consumer channels and the proliferation of social media. These retailers distinguish themselves by their well-defined niches and clever, often rebellious, promotional strategies. For them, the product is less a commodity than an art form in which the customer participates.

Trend #2: Stores shrink

Foot traffic is on the decline in the U.S.: Retail store visits fell from 35 billion in 2009 to 17 billion in 2013, according to a PwC survey. According to the National Association of Realtors, at 47 square feet of retail space per capita, the U.S. has more retail square footage than any other country. Meanwhile, as sales per square foot continue to decline after decades of growth, retailers are reconsidering size in favor of productivity, measured by profit per square foot. More than likely, in the U.S. and around the world, this attention to productivity will increase as digital technologies enable more efficient use of square feet, as well as more consumer buying outside the store.

Trend #3: Giants personalize and localize

Few consumer products companies have a direct relationship with the purchasers of their products, even as robust data analytics allow personalization and localization, leading to ever more differentiated shopper segments. But bypassing their traditional retail partners — at least some of the time — in order to sell directly to consumers could produce hard-to-come-by growth for consumer packaged goods (CPG) companies.

Trend #4: “Frenemies” collaborate

Retail and consumer companies have always had a complicated relationship. They’ve partnered for decades, even as retailers have developed their own private-label brands to compete with manufacturers. Now that supply chains are more transparent, these “frenemies” are discovering more ways to benefit from growth opportunities together. The promise of margin improvements and cost cutting from supply chain efficiencies, for example, is behind the manufacturers’ and retailers’ recent efforts to share customer data, insights, and analysis. And performance-based trade promotions will become more routine as manufacturers ask retailers to help enhance the effectiveness of in-store product campaigns in return for sharing in gains from them.

Trend #5: Global brands embrace social issues

Of the top 20 brand leaders in 1999, only seven remain in the top 20 today, according to PwC’s Bonfire of the Brands, a 15-year survey of 200,000 consumers worldwide and their attitudes toward 6,700 global brands. Our 2016 CEO Survey also found that 52 percent of CEOs believe their customers choose brands not solely on price and features but also on the basis of social and environmental issues.
Orignal Article here

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