With the support of the latest startup innovations, consumer products companies are thriving and exceeding consumer expectations in moments of opportunity, now detailed in a new report by SAP.
The consumer products industry has had to move quickly to respond to the various implications of the COVID-19 pandemic. The digital transformation of all industries has been accelerated due to challenges such as radical demand shifts, supply chain reconfiguration, seasonal workforce interruptions, and the repurposing of manufacturing capacity.
The cascade of new trends from within the consumer products industry, coupled with the need to rethink consumer engagement, strengthens the need for consumer products companies to cultivate innovation coming from startups and new technologies.
New Wave in Consumer Products
Five key trends are fueling a new wave of innovation in the consumer products industry.
- There has been an increase in venture capital funding for consumer products companies, where disruptive companies are entering the market at a rapid pace, leading established players to question old operating models.
- More and more consumers – specifically Millennials and Generation Z – are emphasizing the importance of reducing the environmental impact of their consumption habits and are willing to pay more for organic and all-natural products.
- There has been a shift in which types of companies are dominating the market. Whereas previous industry leaders were companies with the most resources and highest manufacturing capacity, today the companies with the most innovative ideas and talent are entering and leading the market at an unprecedented pace.
- There has been a sharp decline in the cost of resources in various categories, eliminating the cost-based barriers to market entry and allowing companies to scale like never before.
- Consumer products companies no longer think in terms of “moments of truth,” where there is a linear path to purchase with well-defined touch points to influence a purchase. Rather, in order to succeed, consumer products companies need to meet consumers in moments of opportunity, in which they can orchestrate an ecosystem to deliver personalized and unique experiences in service of achieving an outcome.