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BW Businessworld

Future Trends of Consumer Goods Industry

This new trend in sales will offer significant opportunities for DTC retailers and wholesale brands to better control their supply chain operations by cutting out the middleman, or retailer.

Photo Credit : Ritesh Sharma


Consumer goods industry is growing at a very fast pace. In just a decade’s time, the industry has evolved like never before and the credit goes to our growing economy too. According to The Millennium Development Goals Report 2015, back in the 2000s, about 30 per cent of people in developing countries lived in extreme poverty, compared with less than 15 per cent today. Only 12 per cent of people owned a mobile phone. These and other developments have led to a change in consumer’s live, think, and shop and the changes are only going to accelerate. 

The upcoming trends in the industry can be divided into five categories -- the changing face of the consumer, evolving geopolitical dynamics, new patterns of personal consumption, technological advancements, and structural industry shifts. 

Changing the face of the consumer

Middle-Class explosion

As the income of the middle class has gone up, their spending on their lifestyle has also risen. Indian household saving rates have also leapt. In the eight years from 2005, they virtually tripled as more were lifted out of poverty and found themselves with disposable income for the first time.

Millennials taking over

Many experts predicted that by 2020 millennials would become the target consumer to go after, with this generation spending an estimated USD 600 billion each year. The brands and retailers are connecting with millennials. In fact, millennials are forcing brands to start thinking differently about the ways they market to and communicate with this generation.

Shrinking household size

Shrinking household means rising living standards. The way we live, shop, eat, store and cook food all has changed. 

New patterns of personal consumption 

Focus on health and wellness

Consumer good industry has a huge opportunity to enrich consumer lives by supporting the health needs that influence their in-store purchasing. Many retailers across all channels have already seized the opportunity by using health and wellness as a growth strategy, focusing on initiatives like offering healthy foods in the centre of the store and opening in-store retail clinics.

Demand for customization

As the demand for customization in consumer products is growing, the simple fact is that we’re no longer forced to buy an off-the-shelf product that isn’t quite right. Add to that the rise in e-commerce competition and peer-to-peer portals offering authentic, tailor-made experiences, and the future of retail is evolving.

Focus on shopping experience

Customer’s shopping experience has become quite pivotal. It is an area that needs constant nurturing and care and, with a greater focus on customer experience strategy, companies will realize a positive impact on customer loyalty, higher retention and increased revenue growth.

Evolving geopolitical dynamics 

Rising labour and commodity costs

India is faced today with one of the most critical economic situations. At no other time did Indians witness the horrible pheno­menon of spiralling prices. Inflationary pressures are doing plenty of mischiefs. 

Climate Change

Now, many consumer goods companies are working to lower their carbon emissions, prepare for the effects of global warming on their supply chain and respond to growing environmental consciousness among customers.

Technological Advancements 

Advanced Robotics

Advanced robotics systems will bring a change in industrial operations. Compared with conventional robots, advanced robots have a superior perception, integrability, adaptability, and mobility. These improvements permit faster setup, commissioning, and reconfiguration, as well as more efficient and stable operations.

Artificial Intelligence

AI's potential for consumer products companies will Improve efficiency and enhance the customer experience. Without it,  it was hard to understate the impact of artificial intelligence (AI) on the consumer products industry. Never before could companies gain so much insight into their customers – and use that knowledge to create intelligent solutions.

Digital Profiles

Digital profiles are fundamentally giving shape to both consumer demand and competitive dynamics again in the consumer products marketplace. At the same time, these digital innovations are restructuring how consumers shop for and buy products. In an era of fast-changing consumer profiles and behaviors, companies must strive for a thorough understanding of what consumers want and are willing to pay for, and systematically use those insights to inform the evolution of products and brands.

Structural Industry Shifts 

Direct-to-consumer models

This new trend in sales will offer significant opportunities for DTC retailers and wholesale brands to better control their supply chain operations by cutting out the middleman, or retailer.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Amrinder Singh

The author is Director, Bonn Group of Industries

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