Five Big CPG and Retail Trends for 2020
If you think 2019 was an interesting and overwhelming year for CPG and retail, you ain’t seen nothin’ yet. The predicted trends for 2020 are far reaching, high tech, ambitious, and very diverse. Brands will have to really focus on their customers’ experience to know where to invest, because from here out it looks like microtargeting customers is only going to get more sophisticated.
Among the initiatives many companies are taking: an increase in direct-to-customer, more subscriptions, more sustainability moves, and delivering groceries with drones.
These days, customer experience is expected to be omnichannel–to exist everywhere your customer does, both offline and online. That means ensuring your website, app, and social media are all up-to-date and speaking directly to your consumer. A growing trend is to not only have a presence in your expected channel—brick-and-mortar or online—but to offer popups and increase your presence where you can build customer relationships.
One way to do this is, if you have a product, you create a service to support it and vice versa. P&G, for example, is in the process of opening Tide Cleaners cleaning services in retail establishments, universities, and residential complexes so that consumers can use an app—note the technology—to find a local cleaning service that will wash and fold laundry and notify the user when it’s ready to be picked up. Obviously, the cleaning services use only Tide products.
5G, robots, and drones
It’s predicted that fifth-generation cellular networks will transform the Internet of Things, creating seamless, instant connections. This will make a lot more things possible including the increased use of robots to conduct inventory, deploying self-driving carts, and getting creative with interactive media experiences like Virtual Reality and Augmented Reality tools for shoppers.
Any technologies that have to work together to let companies produce and deliver goods, for retailers to network their internal systems, and for companies to provide services for customers, will be strengthened by 5G. It will make tools like RW3’s in-store audit and field sales tools that much more efficient and effective. While the rollout is still in early stages in only a few places, it’s never too early to figure out how to incorporate the technology.
Some examples of how tech is already being used in fun ways include Giant Food Stores’ augmented reality (AR) that lets customers use smartphones to play the store’s Snowflake Search game; and Sam’s Club AR game that lets shoppers use the app to turn a shopping cart into a pirate ship or rocket. Albertson’s has positioned itself to be a leader in grocery gamification, hiring a chief customer and digital officer who used to be general manager of Microsoft’s Xbox business.
And speaking of technology, the FAA has finally given USPS approval for the use of drones for product delivery. First use cases are for health care and time-sensitive deliveries in controlled environments with fixed routes, pioneered by Walgreens. But drone-delivered groceries are coming. Retailers and manufacturers should add that to their list of omnichannel connections with customers. For many customers, just having the novelty of a product arriving by drone may inspire purchases.
Going really, really local
Buying local—as in stocking produce, meat, and dairy from local farms—has been a growing trend for a while. But it’s expected to explode in 2020 because of a combination of tariffs, a need for efficiencies in the supply chain, and more people paying attention to how farming and shipping impacts the environment. Kroger recently nabbed the competitive advantage by becoming super-local—as in growing food right in the store.
The retailer has teamed Infarm, a Berlin-based company, to create hydroponic modular living produce farms in-store. So, customers can pick their produce off the vine. Another example of a national-local partnership is Local Roots, a Los Angeles based vertical farm that provides produce to Walmart stores in California.
Companies have long recognized a growing interest in sustainability and the environment, but some responded with marketing campaigns that were called “greenwashing.” They focused on a green aspect of their company and concealed less environmentally sustainable practices.
That doesn’t work anymore. Consumers want to know how products are sourced and manufactured, right down to understanding the organizational culture of the manufacturer. Startups, which continue to disrupt giant corporations, often make transparency a part of their brand. For the big companies, being able to reveal their processes as part of building a relationship with customers may be a key to winning over the new generation of Millennial and Generation Z consumers.
Heineken sought customers’ help in developing sustainable bottling concepts. Nestlé has committed to making 100 percent of its packaging reusable and recyclable by 2025. And a New Zealand retailer introduced “Food in the Nude,” banning all plastic packaging in the produce department. The Sustainable Packaging movement made big leaps forward in 2019, so any company that’s not on the bandwagon for 2020 is about to be behind.
Where food is going
Food trends change all the time but the vegan movement is growing fast with Impossible Burgers and Beyond Meat. Many publications declared 2019 The Year of the Vegan. So while meat isn’t actually going away, it’s important to stock vegan favorites like oat milk, along with the faux meat. Other popular trends include Asian food, various drinkable vinegars and fermented foods, and all things Keto.
In all likelihood, the CPG and retail industries will be transformed over the next 12 months in many different ways. The important thing for brands is to figure out which of these big developments they need to focus on and then knock it out of the park. Happy New Year!
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