In times of economic uncertainty, the Consumer Packaged Goods industry is typically the first and most heavily impacted sector. This market is particularly sensitive to any shifts in consumer preferences or behavior and can provide valuable insights into the state of the economy at large.
The past few years have witnessed a series of macroeconomic events that have sent shockwaves through the global economy, with the CPG market feeling the reverberations. The COVID-19 pandemic, international tensions, and turbulent domestic affairs have combined forces, leading to global supply chain shortages and contributing significantly to inflation.
As the prices of consumer goods continue to surge, many CPG companies find themselves navigating uncharted waters, striving to stay afloat without succumbing to the trade-down effect. The challenges are evident, with elevated costs in packaging, ingredients, and transportation, along with the persistent pressure of inflation directly affecting consumers.
Yet, amidst these turbulent times, some CPG companies are demonstrating the value of innovation and an openness to new approaches. They are not merely surviving but thriving.
For CPG companies today, it’s not just about adapting; it’s about staying ahead of the curve and understanding the evolving landscape of consumer behavior, market trends, and the competitive arena. The objective is to avoid information blind spots and mitigate the risk of falling behind.
5 Ongoing Trends CPG Brands Face in 2024 and Beyond
The proliferation of new apps, platforms, and services has been reshaping consumer shopping behavior for years. The pandemic accelerated the pace, fueled by critical trends, which are further substantiated by data:
Increased Digital Media Consumption and Commerce
Data indicates that this trend is expected to persist for the next 12 months, with consumers increasingly using new apps, websites, and social commerce to research and purchase CPG products online.
Greater Convenience Driving Online Purchase
Approximately 90% of consumers assert that convenience is a pivotal factor influencing their shopping decisions. This data-driven consumer behavior takes into account product availability, the ease of finding products, the checkout process, and timely and varied delivery options.
Increased Consumer Interest in Health and Sustainability
Data shows that products marketed as sustainable are growing nearly six times faster than conventionally marketed products.
Private Label Retail Brands on the Rise
Data supports the claim that nearly 70% of consumers believe retail-branded products are of equal quality to more familiar, comparable consumer brands.
Consumers Embracing D2C Brands and Business Models
Direct-to-consumer brands have gained traction as they satisfy the demand for unique, authentic products supported by engaging experiences. Subscription business models offer added convenience and have the data to back it up.
As we can observe, a common thread running through these trends is a growing demand for data transparency. Consumers want more detailed information about the products they purchase, including details about ingredients, origin, production methods, and the brands and companies behind them.
Addressing these needs necessitates more transparent consumer interactions and the provision of additional types of information that customers wish to access. To deliver on these expectations, brands require a centralized Master Data Management (MDM) foundation that offers accurate, trustworthy data to retail partners and consumers.
This must be combined with a stringent system for data privacy and governance. By capitalizing on the acceleration of these trends, many companies are reassessing their strategic and operational processes.
They are placing a strong focus on the role of data, recognizing that while most companies grasp the immediacy of the opportunity, a smaller number are confident in their ability to rise to the challenge. As we navigate the uncertain terrain of the Consumer Packaged Goods industry, it is vital for companies to not just react but to proactively shape their strategies.
The key lies in embracing data transparency, along with innovative methods to manage and deliver value from data across the entire business value chain. The ability to act with agility, access accurate information, optimize supply chains, and enhance customer experiences is the cornerstone of CPG’s success in 2023 and beyond.
This calls for a unified view of data and an investment in an integrated Master Data Management solution to eliminate data silos, improve data quality, and extract maximum value from the vast data landscape. The Consumer Packaged Goods industry is evolving, and those who recognize the pivotal role of data transparency will emerge as leaders in this dynamic landscape.
Five Pivotal Opportunities for CPG Success
Each of the discussed trends paves the way for corresponding opportunities for CPG brands. To harness these opportunities, CPG leaders must wholeheartedly embrace data transparency and seek innovative approaches to effectively manage and extract value from their data throughout the entire business value chain.
Accelerate Digital Transformation
While many CPG manufacturers have been on the digital transformation journey for years, the increasing reliance of consumers on digital channels underscores the need for an acceleration of this process. Access to accurate and up-to-date information, essential for supporting the latest innovative tools and technologies, is of paramount importance.
Enabling data transparency across the enterprise and with partners and customers becomes a critical component in delivering the engaging experiences that consumers not only demand but expect.
Leverage the Power of Supply Chain Data
This entails utilizing product-level data attribution to extract, validate, and share information related to environmental impact, sustainability, and product origin. Such practices enhance traceability and provide the ability to better measure and share data on corporate social responsibility, thereby reinforcing trust in your company, products, and brand.
Enhance Operational Efficiency
With CPG brands relying on an ever-evolving array of channels, utilizing them effectively and consistently results in a surge in the volume, variety, and complexity of data sources. Streamlining data processes and workflows through automation is the key to ensuring that teams work efficiently.
This, in turn, brings about benefits like improved collaboration and decision-making.
Increase Business Agility
As consumer behavior undergoes constant transformation, brands must be capable of responding proactively and adapting swiftly. The inability to efficiently manage and share data, and the absence of data transparency, hampers business agility.
It also renders the process of onboarding products, expanding assortments, and optimizing value from new digital channels more costly and challenging. A single, trusted source of data empowers businesses to efficiently share information with retailers and partners and meet their high expectations and deadlines.
Deliver Superior Customer Experiences
Adopting a singular, centralized approach to master data provides a 360° view of customers, enabling brands to disseminate accurate, relevant information and personalized offers. Leveraging such data transparency significantly enhances the customer experience (CX), driving higher levels of engagement, loyalty, and growth.
The consistent delivery of rich content to retail and distribution partners becomes an indispensable component of creating an engaging product/brand experience. Achieving this requires a proven solution that can extract value from data by connecting, enriching, governing, and syndicating it to reach anyone, anywhere, precisely when they need it.
By implementing an integrated solution for master data management, one can eliminate data silos, integrate data across systems and domains, and establish partnerships with third-party resources. The potential of master data management to address data challenges and lay the foundation for success may not be universally acknowledged, but it is an invaluable asset for those who recognize its significance.
How CPG Businesses Can Thrive in the Present and Beyond?
Here are practical guidelines for CPG businesses, offering insights into achieving success within this dynamic industry:
Efficient Information Sharing
Responding to individual requests for new items can be a laborious and complex task. One innovative solution is the introduction of a data catalog.
This streamlined approach expedites the process, allowing manufacturers to provide retailers with access to their complete product catalog. This empowers retailers to retrieve the product data and rich, accurate content they require precisely when they need it.
Enhancing and Evaluating Product Data Accuracy Across All Channels
Ensuring that consumers can easily find products on various retail platforms necessitates meticulous attention to keywords and product descriptions on every digital channel. With numerous listings and diverse retailers, maintaining visibility into how each item is listed can be challenging.
To address this, consider implementing a product comparison and scoring feature, facilitating an understanding of disparities between data listings and what is currently published on retail websites. This feature allows for updates where necessary, ensuring accuracy.
Effective Management of Complex Customer Relationships
Understanding the genuine value of customers, identifying and mitigating risks, and implementing successful sales strategies all require a comprehensive perspective of the entire customer ecosystem—both indirect and direct. Master Data Management (MDM) plays a pivotal role in creating this comprehensive understanding.
By consolidating organizational profiles, hierarchies, and relationships, MDM enables more informed decision-making, more cost-effective processes, and improved Business-to-Business Customer Experience (B2B CX).
Efficiently Handling the Expanding Volume and Variety of Data
A flexible, cloud-native solution, founded on a proven integrated platform conforming to industry standards, is an excellent starting point. Look for a user-friendly interface that facilitates rapid navigation for both business and technical users.
Features such as best-in-class search capabilities and the ability to establish a multidomain hub for centralized access to diverse data types ensure the scalability of the solution to meet the ever-growing demand.
Enhancing Process Efficiency and Data Quality and Value
A multidomain master data management solution coupled with an embedded analytics platform offers users the ability to seamlessly connect and integrate various data types. It does not need separate, intricate Business Intelligence (BI) tools or place additional burden on already stretched analytics teams.
The embedded analytics platform can identify unique and valuable insights, empowering better, quicker, and more confident decision-making. This, in turn, fuels overall business innovation and brand enhancement.
In summary, these guidelines offer a foundational understanding of the imminent trends and opportunities for CPG companies. Master Data Management emerges as a robust strategy for businesses aiming to seize these opportunities.
Importantly, this strategy is not merely pertinent to the present; it is equally critical for the coming decade. Therefore, selecting a master data management solution tailored to address your specific challenges and requirements is pivotal.
It is equally vital that the chosen solution provider possesses deep expertise in the CPG sector to ensure its relevance and effectiveness.
Credencys – A Trusted MDM Implementation Partner
At Credencys, we understand the critical role that data plays in the success of Consumer Packaged Goods (CPG) businesses. In an era where data transparency and Master Data Management (MDM) are pivotal, having a reliable partner can make all the difference.
As a leading technology solutions provider, Credencys has a proven track record of helping businesses in the Consumer Packaged Goods industry harness the power of data to drive growth, streamline operations, and enhance customer experiences. We specialize in MDM implementation, and our expertise extends to a wide range of industries, including CPG.
Why Choose Credencys as Your MDM Implementation Partner?
- Experience: With years of experience in MDM implementation, we have a deep understanding of the unique challenges and opportunities in the CPG sector.
- Proven Solutions: Our solutions are not just theoretical; they have been tested and proven to deliver results. We have successfully helped numerous CPG businesses optimize their data management processes.
- Tailored Solutions: We don’t believe in one-size-fits-all solutions. Our team works closely with you to understand your specific challenges and needs, and we tailor our MDM solutions to align with your business objectives.
- Cutting-Edge Technology: We stay at the forefront of technology trends, ensuring that our solutions are built using the latest tools and platforms for maximum efficiency and effectiveness.
- Dedicated Support: Our commitment to your success doesn’t end with implementation. We provide ongoing support and maintenance to ensure your MDM solution continues to deliver value.
If you are ready to unlock the full potential of data transparency and MDM for your CPG business, we invite you to reach out to our team. Let us be your trusted partner on the journey to success.