CHICAGO -- The consumer packaged goods (CPG) industry has been searching for growth for the past several years due to the challenging economy and conservative shopper spending. Last year was no exception.
Driving growth continued to be a challenge for the consumer packaged goods (CPG) industry in 2015, according to IRI’s latest Times & Trends report, Taking Stock of CPG Past & Future: Gear Up Now for a Year of Growth. Volume sales continued to slide, and dollar sales growth was fed largely by inflationary pricing trends.
Click here for IRI’s 2015 CPG Year in Review.
Consumers will remain entrenched in their conservative purchase behaviors in 2016 even though one-third of Americans feel their financial situation will improve this year; 57% of consumers will make their purchase decisions before they enter the retail store, so marketers must continue their efforts to engage shoppers early in the planning process.
One-third of shoppers will choose brands based on coupons they have at home, and 29% will base purchase decisions on shopper loyalty card discounts. Of course, they will leverage several Internet-based tools, such as smartphone apps and online advertising and promotions, to keep their grocery budgets in check in 2016.
IRI research and analysis uncovered the following top 10 trends that will offer growth opportunities for 2016 and beyond:
- Circle the Wagons: Omnichannel retail is turning the CPG industry on its ear. Harness in-depth insights about how consumers travel online to understand the new path to purchase and drive in-store growth.
- Melting Pot Gets Hotter: The growth and transformation of U.S. households are altering shopper attitudes and behaviors. Keep a finger on the pulse of increasing ethnic diversity and the explosion of non-traditional families.
- Doing More with Less: Consumers are constantly barraged with marketing messages. Cut through the noise in the marketplace and focus on quality versus quantity.
- Lean & Mean Growing Machine: Manufacturer consolidation will continue as CPGs look for new revenue streams. Consider specialized acquisitions to fill white-space growth opportunities.
- Big Opportunity in Small Packages: The urbanization of America will drive growth of smaller-footprint stores. Meet urban shopper needs with localized specialty outlets.
- On the Highway to Health: Consumers are embracing a wide variety of healthier-living strategies. Look across CPG aisles for new ways to deliver healthier options for shoppers and the environment.
- Get Real: Consumers want to know what they’re putting into and onto their bodies, what they’re feeding their pets and exactly what is making their houses cleaner. Answer consumers’ thirst for transparency and authenticity.
- Snack Attack: On-the-go lifestyles continue to have a profound impact on consumer eating behavior. Tap into grazing, the new sit-down meal.
- Go Smart or Go Home: The focus on big data is rapidly giving way to smart data that will drive smart growth. Marry big data with technology and analytic know-how to pave the way to growth.
- Growth Comes from Within: There is no shortage of retail outlet options, so driving growth by adding stores is an ineffective strategy. Find growth by improving efficiency and productivity from within current stores.
“Despite challenging market conditions, CPG marketers really do have reason for optimism in 2016,” said Susan Viamari, vice president of thought leadership for IRI. “Advancing technology has really given retailers and manufacturers a distinct advantage during these times of rapid and widespread change. By investing to understand how best to leverage new advances to really tap into the change, marketers throughout the CPG industry will identify exciting new ways to create real and lasting market advantages.”
Chicago-based IRI is a leading provider of data, predictive analytics and insights that help CPG, over-the-counter (OTC) healthcare organizations, retailers and media companies grow their businesses. With the largest repository of purchase, media, social, causal and loyalty data, all integrated on an on-demand cloud-based technology platform, IRI helps to guide its more than 5,000 clients around the world to remain relevant, capture market share, connect with consumers and deliver market-leading growth.
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