CEO & Co-Founder of aforzaa global leader in cloud computing, transforming consumer goods companies to sell more and grow faster.
The return to “business as usual” that many have been expecting after the pandemic is not something we will see anytime soon. With the global impact of the health crisis still causing waves, now coupled with complex geopolitical events, consumer goods companies are feeling the instability of this new normal. Inflation is now a defining feature. In the United States, inflation has a High in 40 years of 7.9% and remains poised to rise even further.
The consumer goods industry provides for the basic necessities of life for everyone. The impact will be felt globally as demand increases and supply struggles to keep up.
With this cloud hanging over the economy, consumer goods companies must be prepared to adapt their business strategies and processes. Here are some key areas where critical wins can be achieved to drive profits and efficiency and effectively manage necessary investments.
1. Serve the price-conscious consumer.
It’s now more important than ever to determine where your resources are best placed. When inflation rises, the cost of living rises and consumer spending falls. So instead of being a niche part of the market, price-conscious consumers will become key players in deciding which companies can hold their positions.
One of the most direct ways to appeal to this consumer segment is through promotions. By running relevant promotions, you show your customers that you are not passing on cost increases to them, which helps to push the product.
It’s also important to be able to respond in real time to know how effectively your promotions are working and to make changes if necessary. Do not react in the next cycle; change and adapt to consumer preferences.
Another way to appeal to the price-conscious consumer is to re-evaluate your packaging. When the cost of living rises, minimizing waste becomes a huge factor in saving. Think of a single-person household. Since most consumer goods products target 2-4 people, there is: a huge opportunity to reduce the size and target these individual buyers.
Just because it’s always been done a certain way doesn’t mean it can’t adapt in the future.
2. Responding to changes in demand together with retailers.
Fighting inflation doesn’t have to be a solo event. When the entire industry is affected, manufacturers and retailers need to be in it together. The retailer is the point of contact for the consumer and a valuable asset to have by your side. Therefore, communication and cooperation between the two should increase.
Leading companies build productive, long-term partnerships with retailers based on trust. They create joint business plans that help the economy of both suppliers and retailers.
3. Put your people where they need to be.
Your employees are your most valuable asset, so it’s important to deploy them in the most efficient way. As much as you need to get your products to the right consumers, you need to get your people to the right place to maximize their impact.
As companies experience more problems with: staff shortageseach employee must maximize their skills in the right locations.
These are, frankly, unknown waters for the consumer goods industry. Under the influence of major socio-economic and geopolitical events, companies cannot afford to be passive. As inflation and food prices in the UK market only are expected to reach levels not seen for generationsindustry needs to take action and reallocate resources to the areas mapped here.
Remember that relationships with suppliers, employees, and customers are the most valuable assets businesses will have in the future, so be proactive to make sure they’re in the best shape possible.