As another tumultuous year ends, we eagerly anticipate what’s to come in the following twelve months. Here are the top CPG and retail trends we predict will be top-of-mind for retailers, brands, and consumers in 2023:
1. Direct-to-consumer
Direct-to-consumer (DTC) is a retail model where brands sell directly to new customers, eliminating the need to join forces with big retail brands and brick-and-mortar stores. Consumer expectations and preference to buy from DTC brands are at an all-time high, with 23% of shoppers claiming DTC channels offer better quality products. And 61% of consumers also believe DTC companies provide the best personalized and engaging digital experiences compared to marketplaces and third-party channels.
A DTC brand takes complete ownership over its relationship with a consumer from sales, distribution, and marketing. For brand owners, DTC channels help increase profits by cutting distributor and middle-men costs, creating strong relationships with consumers, and forming a memorable brand personality. DTC brands also have the mobility to create personalized relationships with their shoppers, follow retail trends in a timely manner, and use their consumer data to their advantage.
2. Personalized experiences
Closely connected with the rise of DTC comes the trend of personalized shopping experiences. Personalizing a consumer’s shopping experience creates an emotional tie to your brand, building loyalty and retention.
The phenomenon of personalizing products and services continues to gain importance, especially among millennials and Gen Z, with 49% and 37% expressing a strong preference for products, services, or apps that leverage personal data to personalize their consumer experience. This isn’t limited to e-commerce businesses and the digital space. Large retailers like Target and Walmart are going through store remodelings to merge online and in-store offerings and add hands-on experiences such as AI or food and beverage options.
3. Value is a virtue
The rising costs of goods and record-setting inflation numbers are shifting consumers into being more value conscious as 2023 approaches. Amongst an uncertain economy comes a range of issues, including banks worldwide struggling to curb inflation, ongoing supply chain challenges, war across Eastern Europe, and a tightened job market.
The market research firm Innova Market Insights ranked value as the top trend heading into 2023, replacing sustainability as the top trend of 2022. Innova also predicts that more consumers will buy in bulk, shift to private label products, reduce spending on luxury items, cut out impulse purchases, and spend less altogether.
Private labels or store brands will continue to soar in popularity as their perk of low pricing becomes more of a need than a want for consumers. Shoppers have become more open to private label brands and often prefer these over established brands for many reasons. Without the marketing costs usually put behind branded products, private label brands have the potential to be on-trend, affordable, competitive, and rapidly adopted across major retailers. Private labels offer tight control over the retail supply chain for many retailers and suppliers and produce higher profit margins.
Do you have a private label brand you want to get in front of category managers? Check out ECRM’s several upcoming Private Label Sessions.
4. Supply chain resilience
Accelerated by COVID-19, disruptions such as shipping delays, scarcity of raw materials, changes in product demand, global wars and natural disasters, and talent availability will continue to be ongoing problems. Brands and retailers have begun strengthening their supply chains by identifying alternative ingredients, packaging, and distributors before any shortages or price increases may arise and are localizing their chains whenever possible. Establishing strong relationships is equally important to maintain trust and flexibility within your own supply system.
CPG brands can also build resilience by creating end-to-end transparency, investing in digitization, improving communication and collaboration, embracing e-commerce, and building talent, according to McKinsey & Company. Still, resilience may be only half of the puzzle. Staying relevant by keeping up with the latest trends and building strong loyalty may trump supply chain resilience.
Learn how a Giant Eagle buyer used RangeMe and ECRM to fill gaps in their assortment when faced with low inventory and supply chain issues here.
5. Wellness
Wellness has increasingly become a part of consumers’ everyday lives and shopping habits. Wellness products and services are expected to reach more than $ 450 billion in spending in the U.S. and a growth rate of more than 5% annually, even amidst rising costs and inflation.
The boundaries of wellness offerings are becoming less distinct as consumers seek products and services that can address needs across several dimensions, such as mental health, fitness, nutrition, and appearance. McKinsey’s latest survey identified several emerging wellness trends, including:
Natural and clean take a dip
The demand for clean and natural is slowing down, with consumers expressing a preference for efficacy across product categories. This decline is likely due to the desire for product credibility and overexposure to natural or clean ingredient claims, potentially perceived by consumers as greenwashing.
Beauty sleep is the next top priority
The range of products on the market for better sleep will continue to increase. Consumers can now track their sleep using wearables and phone apps and improve their cycle through supplements, smart mattresses, sleep coaching, and daily alarms.
Millennials will drive wellness spending
Millennials prioritize health and wellness more than other generations, followed by Gen X and Gen Z. This is reflected in their spending as well, with Millenials holding the highest average purchase rate of wellness products and services over the past year of any generation.
Black consumers need more inclusive products
The unmet needs of current wellness products are most prominent among Black consumers. About 47-55% of Black consumers said they needed more wellness products and services to meet their needs.
Do you have a wellness brand you want to get in front of category managers? Check out ECRM’s several upcoming Health & Wellness Sessions.
6. Social commerce
In today’s retail world, it is almost impossible to have a brand story without a social media presence.
Social apps like Facebook, Instagram, Pinterest, and TikTok now have built-in social commerce features so consumers can discover, research, and purchase products without leaving the app. Almost half of social media users between ages 14 and 34 have made at least one purchase through social media. Taking advantage of the digital platforms your audience is already using is a no-brainer and can widen your e-commerce reach. According to Hootsuite, “social commerce offers the chance to get specific, ready-to-buy products in front of specific people who would love them, in a way that traditional eCommerce and marketing cannot.”
Being on interactive platforms makes communicating with customers a breeze. Successful brands use social media to engage with customers in real-time, responding to comments and DM’s, lending customer support, and resharing content they’ve been tagged in. These platforms also come with great insights to track what your customers are most interested in so you can later customize your content to meet their preferences.
In 2023, omnichannel strategies will remain popular as consumers mix up in-store and online shopping, expecting a seamless experience from start to finish. With consumers already battling inflation, we also expect brands and retailers to continue finding new ways to drive down costs.
Stay on top of trends in 2023
It is no secret that the retail industry has been somewhat unpredictable over the past few years, but RangeMe and ECRM are here to support brands and buyers through the ever-changing CPG landscape. ECRM and RangeMe provide product discovery, sourcing, and purchasing solutions for retailers and product suppliers from around the world so they can discover, connect, transact, and grow their businesses with ease.
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The post Top CPG and Retail Trend Predictions to Watch in 2023 appeared first on The RangeMe Blog.