COVID-19 accelerated every industry as people quickly adapted to meet health and safety requirements. Consumers already embracing e-commerce jumped onto the internet in greater numbers, purchasing groceries s online. Also, changes in the way we work, shop, and live have become ingrained. Many months after, we see the future of consumer markets more clearly. This article will highlight 5 significant trends and outline a strategy for overcoming them.
The world after COVID-19
Changes in the e-commerce field occur to be powerful – the share of e-commerce sales is expected to increase from 13.9% in 2019 to 22.4% by 2023, according to data from Statista. Moreover,, fundamental shifts already occurring in consumer markets accelerated with the onset of the pandemic. The changes are about::
- Stores – Future stores will be omnichannel and experience-rich, and they will blend the physical and digital worlds.
- Brand relevance – Consumers will continue to demand brands that align with their values and trust.
- Supply Chain – The future supply chain will function autonomously, making ‘smart’ decisions to self-regulate.
- Food – Consumer demand for healthier products is expected to rise and expectations of greater transparency and sustainability in the food value chain.
- Environmental, social and corporate governance – Regulators and boardrooms will continue to place increasing emphasis on ESG.
What stores will look like in the future
As technology revolutionizes retail, rapid change is inevitable. Customers expect frictionless, technology-enabled experiences. You’ll have to meet them where they are, whether through a website, on a smartphone, or on Instagram. Companies that can’t reimagine in-store products and services will be left behind.
The customer journey becomes increasingly online, including comprehensive product information and feedback from reviews and influencers. In addition, the use of mobile phones and smartphones to shop continues to grow rapidly.
The expectation of frictionless retail is another trend affecting the future store. Providing omnichannel service, enabling technologies, and contact-free delivery options will help you create a hassle-free transaction experience. Example? The largest bank in Russia, Sberbank, has partnered with supermarket chain Azbuka Vkusa to introduce biometric payment services throughout the country, and retailers such as Carrefour are experimenting with using facial recognition to ease payments.
Moreover, the migration to digital and the influence of modern retailing giants. Additionally, manufacturers have long tried to leapfrog their retail partners. Now that digital tools are ubiquitous, they will have more opportunities than ever to market directly to consumers, bypassing physical and digital stores. PepsiCo and Procter & Gamble are leading the way in this regard.
Interestingly, consumers expect transparency around order status and delivery, and some want near-instant fulfillment. This experience is fast becoming a key differentiator, one that’s closely tied to perceptions of service and quality. For example, 42% of global respondents said fast and reliable delivery is among the top three most important attributes when shopping online.
Keeping your brand relevant
Consumers are looking for brands they can trust that align with their values. However, pandemics have broadened consumers’ concerns. In addition, people’s purchasing decisions have suddenly become more influenced by paying suppliers in time, honoring pension obligations, and giving employees COVID-related sick leave. So, as socially conscious consumerism continues to grow, you will have an opportunity to strengthen or clarify your brand proposition and its relevance.
Consumers and employees value companies that place people before profits. People will lose trust in a brand if it puts profit before people. Brand trust is increasingly on par with other essential purchase considerations such as quality, value and convenience. Also, consumers and employees want brands to engage and advocate on issues that affect them. According to the Edelman survey, 80% of global respondents want brands to “solve society’s problems.”
Global consumer survey about value sustainability
Source: PwC’s Global Consumer Insights Pulse Survey, March 2021
Brand relevance is increasingly being shaped by the online world, where friends, other consumers, and social media influencers hold sway. This trend is here to stay for the foreseeable future.
New supply chain
As consumer behavior and expectations change, supply chains are under pressure, and trends such as omnichannel shopping and multiple fulfillment points make predicting and shaping demand more difficult. What’s more, supply chains will continue to face complex issues after the pandemic and related crises end.
As a result of this context of uncertainty, end-to-end visibility will be the key to effective supply chain management. You’ll need a clear understanding of inventory location and status and how inventory moves, as well as a clear understanding of customer demand. AI and other analytical tools will form the foundation for a high-functioning digital supply chain.
Companies reap benefits from investments in advanced supply chain capabilities
Source: “Connected and autonomous supply chain ecosystems 2025,” PwC, 2020
The digital supply chain will continue to integrate all relevant internal functions – such as merchandising, category management, store operations, finance and tax – and integrate supply chain partners, such as suppliers, logistics providers, customers, and innovation partners. AI will also enable the digital supply chain of the future to sense and link demand and supply, making it more customer-centric. Rather than pushing products at consumers, you’ll be able to gather more fluid data on consumer demand through various tech touchpoints and use this information to inform and power your supply chain. As a result, consumers, not manufacturers, will determine what happens in the supply chain in almost real-time in the future.
Food in the future
Even before the pandemic, consumers demanded healthier and more sustainable wellness and food products, restricting certain food groups and taking supplements. As a result, more than half of the global respondents said they were eating more plant-based foods more sustainably. This trend is expected to continue. Also, consumers demand accountability on a range of ESG issues in the food industry, such as reducing packaging waste and transparent supply chains. All participants in the food value chain will have to meet these unrelenting expectations if they want to stay in the game.
Food features consumers are willing to pay more for
Source: PwC’s Global Consumer Insights Pulse Survey, March 2021
Locally sourced products will also appeal to many consumers, mainly because of their perceived value and sustainability. Food will also be characterized by increased personalization — even hyper-personalization — and the ambivalence it inspires in some consumers because of how it’s achieved through data collection and tracking.
ESG ascendance
As much as it depends on financial productivity, value creation now relies on resilience and your company’s contribution to the well-being of society. In addition to shareholders, corporations have an extended circle of stakeholders, including employees, customers, suppliers, and the communities where they operate.
While leading companies aren’t waiting for government regulation to bring them into compliance, it is possible that the pandemic could lead to additional rules about sustainability or other ESG matters in consumer markets. For example, in light of the importance of the grocery supply chain, governments and regulators might start to view it as a public infrastructure that needs further scrutiny and regulation. If so, supply chains built on cheap, temporary labor, offshoring, and zero-hour contracts are likely targets for reform. Embracing ESG as a business imperative, not a second-tier initiative, would be a wise move if you haven’t already done so. To achieve this, you must be authentic in your commitment to responsible practices, incorporating ESG goals and ideals into your culture and day-to-day operations.
Restructuring the business
Crises often reveal shortcomings in business strategy and execution. Make sure you address these issues. For example, to strengthen your analytics capabilities across your enterprise, you may need to adopt new technology. Also, trust-building activities with employees and customers must be accelerated. Take care of your employees, and they will look after your customers. Now might be a great time to focus on improving employee communication, engagement, and empowerment, since the battle to acquire and retain customers will only intensify.
You should consider your brand portfolio carefully so that it appeals to today’s more health-conscious consumers. Focusing on fewer brands might be a better strategy since consumers will likely concentrate on need-based buying soon. Keeping up with e-commerce will also require you to develop better fulfillment methods and plans, particularly for solving some of the logistical challenges associated with last-mile delivery. The supply chain must be digitally enabled. Alternatives include crowdsourcing vehicles and delivery personnel to aggregate and improve delivery flows or partnering with third-party delivery services.
Building innovative software solutions is becoming easier. To allow consumers to try products virtually, retailers may need to invest in augmented reality and virtual reality technologies. To gain the visibility and integration necessary for future supply chains, AI and other digital tools may be required. The supply chain should also be examined for risks and inefficiencies under a deglobalizing and nationalistic context. The channel strategy should also be upgraded. When channel lines are blurring, CPG companies might need to develop direct-to-consumer platforms to reach people who will buy online rather than in stores.
To sum up
Changing business models are reshaping all industries. To compete, you’ll have to innovate, too. The pandemic provided an inflection point for many macro trends that had already gained traction. As these trends intensified and accelerated, others, such as experiential retail and globalization, took a back seat. You will find many insights in this report on The future of consumer markets if you wish to learn more!
