What does the emerging “next normal” look like for the CPG industry? In an uncertain world, it’s been difficult to determine, as the pandemic simultaneously accelerated digital transformation and forever changed consumer behavior. More than 18 months on, as the world moves into a post-pandemic phase, we’re seeing signs of changes to CPG demand patterns and consumer shopping habits.
If there has ever been a time when business intelligence will make a difference, this is it. Businesses need it to make better decisions, retain or reclaim competitive advantage, and tap into changing demand patterns to drive growth. This is where the performance analytics platform Line Item becomes a lifeline for CPG and e-commerce marketing managers. With Line Item, CPG brands can harness insights into shifts in demand and new trends in the market to be agile in response to ever-changing dynamics.
Changing they are. Let’s take a closer look at four key trends to watch in the second half of 2021.
Multi-channel purchases are on the rise
Consumers are resuming more active lifestyles as the pandemic recedes. According to data on US consumer mobility, at-home CPG demand will wane in the second half of 2021. As consumers become more comfortable with quick trips and in-store shopping, they will revert to multiple channels. Other consumers will continue buying online, meaning savvy omnichannel marketing will be critical to successful omnichannel sales.
Consumer demand remains idiosyncratic
Indicators suggest that many consumers are somewhere between pandemic at-home patterns and resuming pre-COVID consumption habits. Some of us will retain hybrid work schedules, and we’re still working on enhancing our home environments. This mix of new activities and old tendencies is driving idiosyncratic CPG demand. For example, demand for baking ingredients and home cleaning supplies will likely fall from peak, while cosmetics and clothing purchases are on the rise yet remain below pre-COVID sales levels. In such a volatile market, insights are essential to retaining or improving market share and meeting consumers where they are.
Price sensitivity is a factor
We’re getting ready to gather again—and holiday celebrations in 2021 are predicted to be larger than in 2020. At the same time, national brands are raising prices because of supply chain pressure and fluctuating demand. Store brands may have an opportunity to recover in the second half of 2021 as consumer price sensitivity continues. Understanding new trends in consumption and demand will be foundational to defending market share and maximizing growth going forward. So will key insight into pricing, the lever that ultimately drives profitability. Pricing too low cuts into profits, while pricing too high means your brand may lose out to competitors.
Digital opportunity abounds
Consumers are loyal to brand experiences, not brands. And many brand experiences begin in digital channels. In 2020, consumer loyalty softened as shoppers adapted to new ways of buying, new shortages, and new needs. In a world where brand loyalty matters in the digital realm as much or more than in-person, you must ensure digital content is seen. Research reveals that as much as 45% of content goes unseen by visitors—meaning there is a huge opportunity available to brands that can get it right. Identifying gaps that are keeping your content off page one in search results is a necessity.
How CPG marketers should respond
Given these emerging consumer trends, what can CPG marketers do to position brands for success? We suggest four key opportunities.
Closely monitor changes in buying behavior. First, CPG brand managers and marketers need business intelligence to dial into changes in consumer buying behavior. Line Item can track hundreds of items in each product category, helping marketers see which items are newly trending and monitor third-party and competitor activity. With insight into e-analytics across a product portfolio, Line Item can enable marketers to detect shifts in consumer preferences and demand.
Understand what’s driving value. In a market where consumer demand is less predictable than ever before, CPG brands need next-level business intelligence. Built for CPG and e-commerce, Line Item can capture all product attributes for insight into what is driving value—from flavors to sizes to packaging. Line Item also integrates data with AMZ Brand Analytics, Retail Link, Partnersonline and more for faster, better insight—so CPG marketers can understand how their marketing mix is performing and detect shifts in consumer mobility from in-home/online to out-of-home/in-person purchasing.
Track pricing. Actionable business intelligence on pricing is essential, but it can be a challenge. As significant shelf price changes loom, CPG marketers need granular information to manage their revenue strategies. Line Item makes crucial insight possible, including verification of item pricing, selling price, and list price across your portfolio and your selling platforms. This will help to price products correctly and monitor third-party and competitor activity to ensure you’re driving profitability.
Optimize your search results. Despite our new willingness to pop over to the store, online shopping will remain a force in the CPG market. Superior e-analytics insight at every level from portfolio to product attributes will help CPG marketers adjust their mix of online and in-store promotions. Monitoring whether brands are getting their share of page one search results also helps, including detailed insight into what may be keeping products off page one.
Though in many ways the world may be stabilizing in the second half of 2021, the CPG market is still an uncertain place. Brands need business intelligence to thrive. This is where Line Item is a lifeline as a single platform with insight into what’s driving sales and what’s shaping the consumer demand curve—so you can grow your sales and profitability across your portfolio.
