Four Fast-Moving Consumer Goods Trends Stocking the Shelves of 2022
While consumer goods move fast in a constant, never-ending stream worldwide, the fast-moving consumer goods (FMCG) industry is subject to major changes.
It is a landscape of endless shelves to be stocked and won against countless aisles of competitors lined up in the back.
FMCG is moving. And it is moving fast.
It is no secret that the FMCG environment is complex, with many products, brands, and channels to manage to engage consumers fully.
To thrive in the complexity, we have looked ahead to see which FMCG trends are stocking the shelves of 2022.
The industry has been generating reliable growth and returns for many years. However, it has been facing increasing pressure in recent years as consumer demography and behavior shift.
But these shifts are not the only key drivers out there. Structurally, 'within' FMCG, there are stronger forces at play that shouldn't be overlooked.
Explore four key trends for 2022:
FMCG Companies Enabling Retailers to Deliver Rich Omnichannel Experiences.
The Hunger to Meet Consumer Expectations and Improved Margins Push for Even More D2C
Brand Consolidations to Steal the Picture
Increased Product Lining
Let’s dive in!
FMCG Companies Enabling Retailers to Deliver Rich Omnichannel Experiences
In the last two years, COVID has been a significant catalyst for changes in global consumer habits, and it continues to leave its footprint today.
A footprint that has pushed the digital maturity of consumers several years into the future. Or pushed the future forward to the present day.
The development does not come without consequences for businesses. More digitally matured consumers mean different wants and needs.
It means the interaction with FMCG companies is not limited to an impulsive buying decision made with the retailer.
Instead, the buyer journey has changed and is no longer simply a simple retail touchpoint. The interactions with your brand increasingly happen across channels and formats.
Apart from the pandemic, a demographic shift and seniors adopting digital have raised the bar for digital maturity.
Millennials are no longer the only large consumer group with immense demand to businesses. Gen Z has entered the scene with a different way of consumption.
And mature seniors, who were 'simpler' in their expectations towards FMCGs, are now digitally mature.
They have adopted the way younger generations behave: engage with brands across channels instead of a simple retail interaction.
This implies a monumental challenge for businesses: Deliver personalized, consistent, and rich experiences for consumers across all those channels. The omnichannel way.
To have buyers shift seamlessly from one channel to another in a personal and enriching way.
No easy feat.
And to be honest, not one that we believe all retailers can lift today - let alone mastering.
A central element of our outlook for 2022 is FMCG companies' ability to enable retailers to better cater to customers' omnichannel expectations.
An enablement can happen by providing content in all shapes and sizes for relevant channels.
And we know FMCG companies can take it one step further by automating the push.
Imagine avoiding several intermediaries in the often tedious and slow processes of sharing and aligning content with retailers. Major time saver while enabling retailers to deliver better omnichannel experiences.
That is what a digital asset management platform allows to both the FMCG company and the retailer. A win-win situation.
To be sufficiently equipped in enabling retailers to go omnichannel, global food company Danish Crown Foods decided to implement the Digizuite DAM. They had to deliver up-to-date imagery and other formats of content to retailers across 80 countries while using a minimum number of resources doing it.
We even expect some FMCGs to go one step further and step up their direct-to-consumer (D2C) activities.
The Hunger to Meet Consumer Expectations and Improved Margins Push for Even More D2C
FMCGs are dependent on how retailers communicate, promote, and offer FMCG to consumers, as they act as the direct face to consumers.
As FMCGs distribute content (pack shots, point-of-sales, etc.) to retailers, they don't own the customer experience, when a middleman is involved.
It's problematic because consumers today expect a personalized, consistent, and rich experience when engaging with a brand, as we concluded earlier.
A way many leading FMCGs have tried to both improve margins, but also to get closer to consumers is through direct-to-consumer (D2C).
D2C allows FMCGs to own the entire customer relationship - and leverage customer (transactional) data to create the experiences consumers desire.
And the numbers to support venturing into D2C speaks volumes, as sales are going from physical to digital shelves:
2021 is supposed to end at an astonishing 19.2% growth in FMCG D2C sales following several years of double-digit growth. This is especially a strategic objective for FMCGs as the industry has experienced a slowdown in global consumer demand.
Yet, embarking on the D2C journey is a dangerous adventure for FMCGs. It's a promised land but, for many, also uncharted territory.
FMCGs going D2C experience a changing competitive landscape:
Retailers become both customers and competitors, supply chain, logistics, and storage need to be reconfigured, and new systems and platforms need to be in place and optimized on an ongoing basis.
A crucial challenge for FMCGs going D2C is realizing the full potential of profit margin improvements through effective content delivery and efficient content management.
First, FMCGs need to ensure that new or updated products are distributed correctly.
It sounds like a no-brainer; but we see products in e-commerce platforms with poor or wrong images and branded materials. Or missing entirely. Only damaging their brand, increasing the cost of product returns, and losing customers forever. Often, mistakes because of human-made errors.
Not only are e-commerce teams struggling to deliver good experiences, they spend too much time on various tasks, only negatively impacting the realization of improved margins:
Locate product-related content across various servers and file locations
Check and double-check identified products' descriptions (sometimes in different languages!)
Implement links to YouTube where they host instructional videos or how-to documents (which also needs to be found).
In short, FMCGs looking to go D2C must:
Leverage technology to develop and utilize deep consumer insights, leading to relevant, personalized products, services, experiences, and communication to drive increased sales, retention, and advocacy.
Enter digital asset management system.
We are not saying a digital asset management system is a one-stop solution for new D2C companies. However, it ensures the right content is presented, in the right places, at the right time, in the e-commerce platform.
But for FMCGs to build and manage an e-commerce platform, they need a martech stack that can integrate and has the capabilities to support e-commerce platforms and their requirement.
One thing is the e-commerce platform itself, but FMCGs need to ensure that their digital asset management can combine with CMS and PIM.
Not all digital asset management platforms can integrate seamlessly with other platforms. Hence FMCGs need to keep integration capabilities in mind when identifying potential digital asset management solutions.
An excellent way to identify platforms with good integration capabilities is to look for those with an open API, to the needed CMS and PIM.
Suppose FMCGs have such martech stack in place. In that case, they can rest assured that their product images, videos, 3D objects, and related product information will flow seamlessly and ultimately deliver the ideal e-commerce experience.
Beyond meeting consumers' needs and meeting their expectations, digital asset management platform allows FMCGs to manage content efficiently
Not only that, but it also gives them peace of mind as a DAM provides security capabilities, version control, and more.
Capabilities that are not always available in CMS systems.
Digizuite's digital asset management solution does exactly that. What's more, AI-based features allow e-commerce teams to deliver personalized content, as consumers so desire.
Brand Consolidations to Steal the Picture
Boston Consulting Group report that M&A activities in FMCG is up 30% compared to 2013, and the trend is projected to continue into the following year.
A deal that caught the public's eye was Unilever's $1 billion acquisition of Dollar Shave Club – a D2C startup positioned to compete against the shaving giant Gillette.
The acquisition not only gave Unilever's a place in the shaving industry, but it was also a move towards increased D2C.
This is just one in a series of M&As in recent years. But integrating brands such as the Dollar Shave Club or many others into the brand portfolio is a task marketing departments struggle deeply with.
Especially from a content perspective.
As FMCGs buy brands, the acquired brands' content, data, and systems are rarely seamlessly united. If not resolved early on, the problem persists and even multiplies, causing unmanageable manual content-reconciliation processes.
Not only that, but FMCGs also risk a damaged brand if data/content is used/delivered in the wrong way due to human-made errors.
Research from Deloitte reveals that most acquisition processes experience high delays related to brand consolidations.
Digital asset management is a key solution to ensure control and consolidation of content.
CommScope recently had to undertake a 3-to-1 brand consolidation in their brand portfolio. Three brands that included over +25,000 employees in 130 countries.
The conclusion was clear:
To avoid delays, inefficiencies, or content distribution in the wrong markets and channels, or to the wrong customers, digital assets had to be gathered 'under one roof'.
Put differently, if FMCG businesses are to benefit from brand consolidations, being very aware of the content put in front of customers during- and post-acquisition is imperative.
What digital asset management enables.
Beyond the heavy ramp-up in acquiring brands, FMCGs also look to grow organically, namely through product line expansion, which is leads us to trend number four.
Increased Product Lining
Product lining refers to how companies offer several related products individually – sometimes referred to as a 'variant strategy'.
Think about Coca-Cola. Most think about either the brand – or the product.
It has the same name. But the brand Coca-Cola has more products than Coca-Cola. Products such as Coca-Cola Light, Zero, Cherry, and Vanilla.
Many product brands allow FMCGs to target more of the total addressable market of consumers incrementally.
However, it does not come without demands for marketing departments.
The graphic below illustrates why that is:
As the number of products increase, so does the content management complexity. This manifests itself into four exponentially increasing issues.
4 exponentially increasing issues as the number of products increase
The volume of content required increases
The number of content varieties increase
More consumer end-points
And more stakeholders are involved (customer service, KAMs, etc.)
As a marketer responsible for creating, managing, and distributing content across brands, it becomes a "complexity nightmare".
The direction leading FMCGs take to solve this complexity is implementing a digital asset management system. It centralizes and creates a single source of truth for the large volumes of content and content varieties.
It does this while connecting to more consumer end-points and easy access (and access rights) towards involved stakeholders, be it customer service, sales, etc.
Leading FMCGs who need to deliver strong content and assets to a wide array of consumers combine data from product information management systems with content from a digital asset management system. Integrating the two platforms allows you to integrate product data with rich content.
While the two systems overlap in many ways, they have fundamental differences in what they aim to achieve. Aligning a PIM and a DAM allows FMCGs to create effective associates between their digital assets and products.
Are you ready for the FMCG trends in 2022?
The key trends in FMCG that we have identified and described are, to a large extend, structural.
And that is why they do not only require businesses to stock more shelves at a faster pace.
They also demand managing the increased complexity that the very trends bring.
Companies go omnichannel and aim to develop enriching personalized experiences for products in the FMCG category.
Want to learn about Digital Asset Management?
Contact us today for a free, personalized assessment of where you are today and we’ll be happy to share our expertise and insights on how you can help your business hit your 2022 growth goals.
