7 global trends impacting FMCG locally – plus some trade secrets to boost sales in 2023 and beyond!
Consumers are increasingly discerning and empowered, and the market is more competitive than ever before. You need a finger on the pulse of the industry if you are to keep up and maintain your competitive edge. We’ve identified 7 key global trends impacting FMCG locally:
- Emerging markets account for 70% of the growth in the consumer goods market.
- Post-Covid Consumers remain price sensitive.
- Two-thirds of touch points in today’s buyer journeys are consumer-driven.
- Consumers put health on the shopping list.
- ‘The millennial effect’ – younger generations are experience-oriented, not product driven.
- Omnichannel shopping is the future of retail.
- Bang for your buck – marketing budgets remain constrained, but expectations of return are higher than ever.
1. Emerging markets account for 70% of the growth in the consumer goods market.
Mckinsey estimates that emerging markets will generate new consumer sales of $11tn by 2025. This makes emerging markets like South Africa attractive for global brand owners. As a result, we are likely to see continued brand and product diversification on our shelves.
This means more choice for consumers and more competition for marketers. However, it also presents opportunities to capture consumer attention through brand novelty and innovative product launches.
Big brands unfamiliar with emerging market consumer behaviour need reminding that e-commerce adoption is not what it is in developed markets. According to FNB Merchant Services statistics, e-commerce card purchases are at just 8% of the total card purchases in South Africa today. Fears of parcel theft, online fraud, high mobile data costs and challenges with last-mile delivery mean that, for the vast majority of South Africans, trips to the local supermarket remain a part of everyday life.
Failure to recognise the power of in-store promotions in emerging markets can mean failure to launch.
In-store promotions and physical brand activations remain valuable strategies in your arsenal in emerging markets like South Africa.
2. Post-Covid consumers remain price-sensitive
We continue to feel the aftereffects of the pandemic in our pockets. Household budgets remain constrained and we’ve seen consumers continue to base brand choices primarily on price.
Mckinsey reported recently that 32% of shoppers in South Africa substitute branded products with cheaper alternatives – either more affordable brands or private (no-name) labels – representing a 10% increase since the start of the pandemic.
The use of cleverly positioned in-store promotions are a great way to capture the attention of price-sensitive consumers. If they try a superior product on promotion, they will be more inclined to switch once financial constraints ease.
3. Two-thirds of touch points in today’s buyer journeys are consumer driven.
The way consumers make decisions to purchase has changed. It’s no longer a linear funnel led by sales and marketing in the driver’s seat. Instead, today’s consumer buyer journeys are ‘self-driven’.
Consumers research products, consult with peers and check brands out on social media when considering what to buy. In fact, research by Mckinsey found that two-thirds of touch points on today’s buyer journeys involve consumer-driven marketing activities, including online reviews, word-of-mouth recommendations and in-store interactions.
In this brave new world, FMCG marketers must facilitate the creation of consumer-driven marketing touch points in their brand and trade marketing repertoire. This means creating opportunities for consumers to engage with brands on their own terms.
In-store promotions are a great way to achieve this right where consumers act and transact. Done right, these activities can prove extremely effective. But, if you want scalability, brand activations that give consumers awesome and shareable experiences have the greatest potential for exponential reach, virality and influence.
Courtesy of Bizcommunity – read full article here.