Consumer Packaged Goods
Consumer Packaged Goods, a term that you may not be overly familiar with, but something that we, as consumers, are involved with on a daily basis.
What Exactly is CPG?
Consumer Packaged Goods or CPG for short, is the term used to describe items that consumers use on a daily basis. These items tend to need replenished on a more frequent basis as they have a shorter lifespan and are produced by manufacturers with the intent to be used within a short space of time.
CPG items are usually wrapped up nice and neat in stores for us consumers to touch and buy on the spot. There are massive companies which manufacture and sell such goods to the retailers themselves that make it easy for people to buy.
It’s common knowledge however that the way that people buy their products has changed dramatically over the last few years. Consumers have altered the way that CPG products are sold and will continue to shape this competitive market over the coming years.
So let’s look at how Consumer Packaged Goods has changed and what we can expect to see over the next few years.
Online Sales vs Offline Sales
There has been a massive surge of retailers taking their business online, with many retailers reporting higher online figures than their traditional brick and mortar stores.
With this in mind, it’s important to understand why many companies are now selling their products online. With convenience, value for money and a wider choice of products online, customers are spending more online than ever before. It has been reported that over half of Americans now buy their consumer packaged goods online rather than visiting the stores.
This trend is set to continue, with customers taking advantage of online deals, free delivery and click and collect services, convenience is key to success.
Customer Engagement – Online Chat
We’ve spoke about how convenience is vital, and customers value their time more than ever. That’s where customer engagement comes into play.
If you visit any online retailer or company, you are likely to see the option to chat live to someone from the company.
This is a great way to improve customer engagement, and therefore increase sales and profits from a business’ point of view.
Having a live chat feature or even an automatic bot available 24/7 means that customers can be notified at any time of the day when new products go on sale or if an item has suddenly come back into stock.
This has seen an increase in online sales with consumer packaged goods and is set to continue as the need for 24/7 customer support continues to grow.
Subscription Services give consumers to the chance to try a product and sign up to a weekly, monthly, or yearly service where they receive the company’s product each time.
These subscription services are often offered straight from the manufacturer rather than the product being sold to a retailer and then onto the customer, cutting out the middle man and any expenses in between.
This has seen a massive growth in recent times with subscriptions available for meat boxes, beer crates and even shaving equipment. Consumers are going crazy for these types of services, with some companies seeing a huge spike in sales year on year.
Consumers are more likely to continue to make purchases of this type, making selling consumer packaged products within a subscription service a very lucrative market.
This is something that is forecast to continue to grow over the next few years especially with the mass migration onto online retailing.
On the face of it, this doesn’t sound anything too unique, and quite often when the word data gets mentioned the topic can get quite debated.
Within the CPG industry, companies have taken advantage of consumer data in order to make significant changes to the way they operate.
This data can be anything from analysing buying habits to trawling through consumer feedback. Companies can use this useful information to be able to create a unique customer experience, being able to make a positive impact throughout the customer journey, and therefore increasing productivity, sales and profits.
There is likely to be an increased focus on collecting useful consumer data in order to battle with competition and be able to solidify any market share.
Mobile is the way forward
If you care to look back a couple of decades ago, you’d struggle to find anyone using a mobile phone. Nowadays everyone has one strapped to their hand, and now, more than ever, you can do everything you could do on your laptop or PC, on your mobile.
The increase of mobile phone usage is pushing CPG companies to differ the way they market to consumers. Now many people are targeted through social media sites or through app advertisements.
This is one of the most effective ways of marketing as consumers can be marketed to and directed to a sale within a matter of seconds.
Projections show an increase in the number of mobile phones used worldwide over the next 10 years. Consumer Packaged Goods will become readily available to at least 75% of people worldwide at the press of a button.
Why is this important?
CPG Logistics form a large part of the products that we all buy on a regular basis.
The way that people are shopping has radically changed the way that both manufacturers and retailers have marketed these types of products.
The massive shift to an online product base has slowly seen a decline in traditional CPG, with many products now only visible through a screen, unable to be touched before a sale is even made.
The way that we now shop could never have been predicted many years ago, so it’s important to look at the trends to be able to react positively to the ongoing shift in the consumer market.
Consumer Packaged Goods will always be available, it may just be the way they are available which is set to change.