Unlike many of my blogging peers, I don’t do a post full of predictions for the coming year. The reason is that next year will probably be rather similar to this year. Predictions blogs need to be exciting, so they often end up full of hyperbole about revolution and change. Much of which might happen at some point, but little of which is actually going to revolutionize the world next year. However, the New Year is a good time to reflect, plan, and consider what will be different. Last year I asked the consumer goods community to be brave – how did that go in 2018? And in 2019, I’m going to suggest that focus is the best way to survive and thrive in the consumer goods industry.
The outlook for 2019 is bleak for many in the consumer goods industry
2019 will bring a year of continued pressure and challenge for many brands and retailers. A recent report from McKinsey showed the pressure that retailer’s profits have been under. There is little to suggest that this will change in 2019. And predictably, those retailers will in turn continue to put pressure on their suppliers. So far so glum. But the real question is about how companies might respond. Sure, both parties can continue to put pressure on costs, with negotiations focusing on reducing costs to one party at the expense of the other. But where does that path lead to? How much more cost can be stripped out? What is the cost to a supplier base continually being squeezed? At one point will the industry consider another path to success? Maybe 2019 is the year for companies to do that, before they have no choice?
The new retail reality is the cause of a lot of consumer goods pain in 2019
And the root cause of all this bleakness? Consumers and shoppers seem to want different things than they used to! At the very least, they have many more offers to choose from, and they seem to enjoy that choice. Consumers who used to cook at home, now buy ready to eat meals. Shoppers used to pick up the bulk of their groceries in regular stock up shops at hypermarkets and supermarkets – now many choose to go online, or buy less, more frequently, at discounters and convenience stores. Shoppers seem to love some categories, so that they are going to specialists even more. And in some categories, they’d rather have on than visit a store.
It’s all changing, it’s a new reality for the consumer goods industry. It would be crazy to think that the ways of working that worked in the past will work in this much-changed future, right?
The path to success in consumer goods in 2019
Those that embrace the new retail reality will be the ones that will see success, or at least will begin to see the glimmer of light at the end of the tunnel. But when I say this, I don’t mean ‘going digital’. I don’t mean investing in whatever retail tech is ‘the latest thing’. Don’t get me wrong – some of this tech will be great for some situations. But a lot of it is technology for the sake of technology.
I mean recognizing that consumers and shoppers are changing, their behavior is heterogeneous and diverse and likely to keep changing too. The path to success in 2019 will be recognizing that one solution won’t work for every consumer, every shopper and every shopper mission. We need to be consumer and shopper-centric like we’ve never been before!
The key to consumer goods success in 2019? Focus
The key to all of this, from every consulting project I’ve worked on, is focus. Unless you are shooting for 100% market share you don’t need to win with every consumer and every shopper every time. Target the consumers and shoppers, missions and occasions that will create most value for your brand or store. Develop a deep understanding of the consumer and shopper behind those missions and occasions. Understand what they want in terms of experience and deliver that.
Trying to please everyone all the time is a fool’s mission. It leads to average. It leads to generic. In the land of consumer goods retail, it leads to deals and discounts (because it’s the one thing that all shoppers like!) But that is cripplingly expensive, and most of the benefits of discounts and deals goes to consumers and shoppers that are low value (typically those that buy habitually on deal). If that excess and waste was possibly acceptable in the past, it isn’t viable in this tougher retail reality. We need to be sharper. We need to be focused.
How to make your consumer goods marketing efforts sharper in 2019
If you want your consumer marketing, shopper marketing and trade activation to be sharper, more focused, more effective, more cost effective in 2019, please get in touch. Let me show you exactly how we’ve helped countless organizations from across the consumer goods spectrum: food, beverage, consumer electronics, household, appliance, pharmacy and more. Let’s see how we can sharpen your team’s focus in preparation for a really challenging year. Or build awareness of the challenges at the very least: I can come and speak at your next meeting or planning event to get the conversation started, and begin building plans.
Because whatever else it will be, 2019 will be a year of challenge. But also, a year of opportunity. A year for marketers at both manufacturer and retailers to really challenge themselves to deliver better experiences. To become truly customer-centric. To stop talking brands and categories, and to talk shoppers and missions. I really hope we see more of that in 2019!
At the beginning of this post I said I don’t do predictions. But if I did, I would predict 2019 will be a year of massive contrasts: a division between those companies that aim to create massive value by delivering the consumer and shopper experience their customer want, and those that don’t. Which side do you want to be on? If you’d like to know more about how we help companies deliver against this promise, with bespoke training and consulting solutions, get in touch now. No obligation – I’m always happy to chat!
