Sales trends in the CPG industry have been slowly evolving over the past five years, and we are going to see the effects of those changes in 2020.
We outline six of the biggest sales trends CPG brands will be seeing this year and what they can do to adapt their business plan template accordingly.
Transparency
Going into 2020, CPG brands will have to make transparency a priority on two fronts. A number of brands are already moving towards making physical packaging transparent, so customers can see the product within its packaging environment.
Brands are also going to have to become more transparent in their business dealings, their future plans, and their sustainability efforts (more on that in the next point). Major brands like Nestle are taking their customers’ suggestions into account and changing their products entirely by creating healthy versions of their chocolates.
To adapt to sales trends in 2020, CPG brands will have to recognize that customers are now more aware of the goings-on in the industry. Consumers are demanding socially and environmentally-conscious decisions from the brands they choose to associate with, and the brands that answer that call will see improving sales in the coming years.
Sustainability
In the vein of brand transparency, sustainability must become a key focus for CPG brands. Customers want to know that the products they are buying are good for the environment, good for their health, and are ethically made. The CPG brands that are going to win in 2020 are the ones who will make a lasting commitment to sustainability, thus boosting their brand reputation. Savvy shoppers will be holding brands to their promises, and are no longer afraid to call them out on social media.
Major brands such as Olay are leading the way in terms of incorporating sustainability in their sales models. Olay created refillable packages for their moisturizers, which appeals to consumers concerned about the environment. Through 2020 and beyond, we will continue to see brands finding ways to reduce waste and boost sustainability through innovative packaging, responsible sourcing, and efficient manufacturing.
Value Addition
The sale of products on their own may have been enough to see brands through over the past few years. But by the time 2020 comes around, CPG brands will be expected to do more. To ensure that consumers have a long-lasting relationship with your brand, products need to be sold with post-sale services.
Consumers are looking for brands that offer some value addition—and major international brands are already paving the way in terms of these services. Tide has implemented a laundry and dry cleaning service in select locations that uses only Tide products. Customers are encouraged to utilize the service and thus continue their relationship with the brand beyond purchasing the laundry detergent.
In a similar vein, Adidas has begun designing custom insoles for their shoes which they hand deliver to customers within hours of purchase. The inclusion of value added services not only progresses the relationship between customers and brands, but it shows customers that they are the top priority for brands.
Consumer Sentiment
As we have outlined in the previous point, in 2020 CPG brands are going to be expected to look beyond product sales as an end goal. While highlighting brand elements like voice, tone, colors, and fonts will continue to be an important exercise, CPG businesses should also be tapping into consumer sentiment.
Dove has exemplified how to use the sentiment model to boost sales — their recent advertising campaigns have all been about uplifting the people who use their products rather than simply giving reasons to buy them. Unsurprisingly, this has correlated to increased interest from consumers and improving sales. We’ve also seen similar campaigns across the CPG landscape and it is fair to say this trend is here to stay.
Digital Sales
The world has become digital in a myriad of ways, and this gives CPG brands an opportunity to change the way they reach customers.
Major brands like Wayfair, Home Depot, and Walmart have gone further than their brick and mortar stores by implementing dynamic mobile apps. Walmart has even begun optimizing their products for voice search and facial recognition.
Augmented reality (AR) is another area that is boosting digital sales,according to the latest mobile marketing trends. A number of CPG brands are offering AR try-before-you-buy options that have become very appealing to consumers.
Sales Subscriptions
A major disruption in the CPG industry can be seen in the popularity of sales subscriptions and membership programs. While consumers are still willing to experiment with one-time purchases, they are also actively purchasing subscriptions for longer-lasting partnerships with brands they’ve come to know and trust.
The subscription model was originally popularized by meal-kit companies like Blue Apron and HelloFresh, but has spread into the CPG space via direct-to-consumer brands such as Dollar Shave Club as well as through third party services that distribute products from multiple different brands such as Birchbox. With customers that rarely have a need to only buy a product once, the subscription model is a great way to turn customers into brand loyalists or to introduce products to someone who may have never heard of them before. This means that even smaller brands who may not have the infrastructure for their own DTC model can partner with existing subscription services to benefit from this trend.
Summing Up
2020 is going to see a number of major changes taking place in sales models for CPG brands. We have outlined the six most impactful sales trends that brands will have to take note of:
- Being transparent in their business dealings and in their physical packaging
- Committing to sustainability efforts and implementing them
- Selling products with value adding services
- Understanding consumer sentiment when creating and marketing products
- Optimizing the brand’s digital sales presence
- Exploring subscription models to encourage repeat customers and reach new audiences
Following these trends will make it easier for CPG brands to meet their 2020 goals and see them through the next five years of innovation.
