1. Focus on omnichannel strategies
Today’s shoppers expect smooth, seamless experiences across online and physical retail channels. CPG brands need a full view of consumer behavior to understand where to focus, gain shopper attention, and increase market share.
This will be especially important in 2023, as consumers return to physical stores in larger numbers, thanks in part to relaxed masking and social distancing restrictions.
Having data to track the nuances of consumers’ brand shifting behavior and how it’s impacting sales across channels will help brands create savvier strategies for capturing more of their buyers’ dollars.
Embracing omni strategies means providing smooth online user experience for consumers who are new to or continuing online shopping—with consistent branding, easily searchable product listings, etc.—and an equal focus on the fundamentals of the brick-and-mortar experience.
2. Provide value for consumers with more effective promotions and pricing
Consumers are actively searching for deals and product promotions in order to save, even from brands they wouldn’t normally purchase (including private labels). Most consumers (73%) report using multiple strategies to save money, including stocking up when items are on sale, using coupons, seeking out stores with lower prices, and buying store brands.
Retailers that successfully maintained shoppers in 2022 opted to absorb rising costs and adopt every-day-low-pricing strategies that matched prices with online and discount retailers for key products.
For manufacturers, getting granular with account-specific tactics—and monitoring their effectiveness with automated analytics tools—will go a long way in meeting consumer demand for value and driving sales in 2023. In 2022, winning manufacturers created focused pricing and promotion practices or teams to create pricing strategies at the global level, localize at the market level, and consistently monitor effectiveness.
3. Keep the innovation pipeline full
Research has shown time and again that innovation is a key driver of growth, and companies who hit the pause button during times of crisis risk getting left behind. It’s easy to see how it happens—in a retail environment challenged with supply chain issues, innovation takes a back seat to more immediate concerns like keeping core products on the shelf.
But companies that have continued to innovate during this challenging time are experiencing a greater share of growth, sales, and market share as compared with those who have not. There are concrete steps companies can take to fortify their innovation pipelines, whether they’re offering the next big thing, a new package size, use case, or occasion.
The bottom line: adapting quickly with innovation to meet consumer needs will be important for success in 2023.
4. Adjust assortment to accommodate store switching
Many consumers have continued to “shop shift” in 2022, changing stores as they change post-pandemic commuting habits or hunt for deals.
Consumers shopping closer to home or seeking lower prices in less-familiar locations will encounter layouts and product assortments that may be different from what they are used to. As in 2022, savvy brands can use this shop-shifting as an opportunity to reset assortment. Many of these shop-shifting consumers are actively seeking lower prices and could be willing to buck brand loyalty and buy a lower-priced alternative. Retailers can use data-backed shopper understanding to re-evaluate their range and store formats to address this shift.
5. Invest in data and automated analytics as strategic resources
With inflationary pressures mounting in 2022, it’s increasingly important that CPG manufacturers and retailers have data-backed insights to plan for and navigate 2023.
Though most companies are investing in data today, translating it into successful, concrete action plans is less common. But the right tools can help CPG manufacturers and retailers quickly analyze a volatile market and identify next steps to gain a competitive edge. Winning brands and retailers will tap into automated, digital analytics capabilities to observe shopper behavior, diagnose what’s happening, why it’s happening, and plan for what’s next.