the future of CPG growth- holiday edition

During the first year of the COVID-19 pandemic, CPG retailers found themselves quickly growing, achieving a higher growth period in 2020 than the four years prior combined. The more demand they received, the less supply chain there was, causing a sharp increase in material cost. E-commerce sales rose 43%, seeing an increase of $244.2 billion from the year prior. The fear of the unknown rooted a panic in consumers to feel the need to hoard what they felt to be essential at the time, causing for a long duration of out of stock items. Amazon’s profit grew nearly 200% during the pandemic, reaching over $6 billion, one of their most successful years in the market.

Adapting to shifting consumer behavior

The pandemic has had a significant impact on consumer behavior and market dynamics. As the world begins to recover, there are several trends and opportunities that are shaping the growth trajectory of the CPG industry post-pandemic.

• E-commerce: The pandemic has accelerated the shift towards e-commerce, with more consumers than ever before turning to online channels for their shopping needs. Companies that can effectively leverage e-commerce channels are likely to experience strong growth in the post-pandemic era.

• Health and wellness: The pandemic has heightened awareness of the importance of health and wellness, and consumers are increasingly seeking out products that support their health and well-being.

• Sustainability: Consumers are increasingly concerned about the impact of their purchases on the environment, and CPG companies that prioritize sustainability are likely to benefit from this trend. Companies that invest in sustainable sourcing, packaging, and production methods are likely to appeal to environmentally-conscious consumers.

• Innovation: The pandemic has created opportunities for CPG companies to innovate and introduce new products that meet the changing needs of consumers. Companies that can effectively innovate and adapt to changing consumer preferences are likely to experience growth.

• Personalization: Consumers are increasingly seeking out personalized products and experiences, and CPG companies that can offer customization and personalization are likely to appeal to these consumers.

Building brand loyalty during economic uncertainty

As the world pivots toward a new normal in the wake of the pandemic, a strong sense of economic uncertainty remains. Inflation has consumers opting for less expensive CPG items. With the growing popularity and convenience of online shopping, more consumers are turning to e-commerce platforms to purchase their everyday household products, groceries, personal care items, and more. The COVID-19 pandemic further accelerated this trend as people sought contactless shopping options and embraced the convenience of having essential items delivered to their doorsteps. Ensuring e-commerce strategies are in place for this accelerated growth and sustained demand must be top priority for CPG brands.

By investing in brand advertising, CPG companies can create a strong emotional connection with consumers that drives long-term growth and success. Especially during economic downturns, CPG marketers who continue to invest in brand advertising come out stronger often because they focus on gaining excess share of voice (ESOV). Consistently communicating their brand's message and values, CPG companies can create a sense of trust and loyalty with consumers. This can lead to repeat purchases and higher lifetime customer value.

In terms of digital advertising, it’s also important to consider device usage. The blurring of home and workspaces has allowed us to identify new strategies for prompting consumer engagement. Consider diversifying advertising efforts to reach consumers throughout the day whether they are on mobile phones, connected TV’s, laptops or tablets.

As it becomes harder to pass on production costs to cash-strapped consumers, doing more with less from a marketing perspective is essential. By accelerating the personalization of digital marketing across streaming and retail media networks, CPG brands can better target shoppers and boost the effectiveness of every marketing dollar spent.

Prepping for the holidays

It's never too early to start planning your digital marketing strategy for the holiday season. The holiday period is a critical time for brands to maximize their online presence, engage with customers, and boost sales. By starting your preparations well in advance, you can create a comprehensive and well-thought-out digital campaign that will stand out amidst the festive noise. Causal IQ combines the power of programmatic technology with the intelligence of experienced ecommerce advertising experts to give your brand an edge over the competition. We offer personalized brand experiences using an algorithmic approach to branding and performance marketing. To learn more, visit causaliQ.com.