From smart packaging to pop-up stores, technology allows consumer packaged goods (CPG) companies to engage with consumers in new and innovative ways. How else will digital capabilities shape the brand-consumer relationship in the year ahead? Deloitte, New York, released its 2019 Consumer Products Outlook report, which explores the biggest technology-driven trends in the industry.

The pursuit of customer centricity

Exciting advancements in technology are becoming increasingly entrenched in the consumer products (CP) industry, helping fuel growth and ensuring benefits to both companies and consumers. These developments are likely driven in part by CP companies’ continued commitment to a customer-centric approach to responding to marketplace trends, understanding consumer preferences and deepening one-on-one connections with customers and consumers.

As a growing number of consumers research, purchase and engage with brands digitally, it will likely become imperative for CP companies to adopt newer technologies, or risk being outdated.

Technology advancements, coupled with the continued pursuit of customer centricity, are at the heart of industry trends in 2019:

  • CP companies are developing proprietary technology to drive innovation and create a continuous and interconnected supply chain to drive operational efficiencies.
  • Technology is at the heart of industry and consumer trends, such as:
    • the growth of direct-to-consumer (DTC) brands;
    • the emergence of branded pop-up stores; and
    • online retailers developing a brick-and-mortar presence, while also investing in smart packaging and exploring newer trends in neuro-nutrition and biohacking.
  • Technology makes on-demand access to information possible, leading to full transparency in consumers’ interest in health and wellness, organic foods and sustainability.

How technology is shaping new CP strategies

Enabled by technology, many CP companies are engaging with their consumers in more innovative and direct ways. The continued growth of DTC brands, the re-emergence of pop-up stores and online retailers developing a brick-and-mortar presence are all accelerated by the deployment of disruptive technologies, creating more avenues for brands to have a dialogue with consumers.

Direct-to-consumer brands
The phenomenon of brands selling directly to consumers and skipping retailers altogether continues to grow in popularity. Apart from convenience and competitive product pricing, many consumers appreciate the personalized service they receive from these brands, and frequently develop a special bond with them, which also plays a vital role in nurturing brand loyalty.

In addition to DTCs likely realizing greater margins on sales of their own products, having direct access to their consumers allow these brands to collect valuable consumer data that typically had only been the property of retailers.

Pop-up stores
Another avenue allowing brands to more intimately engage their customers is through the re-emergence of pop-up stores. Creating an opportunity for brands to interact with their consumers without the need to visit a conventional store, pop-up stores can be a fun alternative to traditional distribution channels.

These temporary stores can also give brands the opportunity to collect customer information and better understand their preferences.

It’s ironic that after years of creating operational efficiencies and building online dominance, large e-retailers like Amazon are building a brick-and-mortar presence. This trend likely resulted from recognizing that consumers are interested in “experiencing” products in-store before purchasing them online. It also acknowledges the importance of engaging with consumers at the ground level to gain insight into their preferences.

E-retailer stores are also able to build upon the seamless online experiences they’ve created for their consumers powered by technologies such as the Internet of Things (IoT) and artificial intelligence.

Neuro-nutrition involves understanding how foods affect the brain. Proponents of neuro-nutrition believe that eating certain feel-good foods can stimulate the brain to be happy. This has led some companies to develop and market DNA test kits that will help consumers determine what foods provide the best path forward for health nutrition.

Connected supply chains
With remarkable growth in digital connectivity and technological advancements, the established model of a traditional supply chain—one that entails a sequential movement of materials, finished goods, capital and information through assets and from place to place—is often being disrupted. Many CP companies are choosing to move away from a set arrangement to a dynamic, interconnected system that can integrate consumer demand patterns and ecosystem partners conveniently.

This shift to a more open digital supply network is evolving traditional supply chain operations through:

  • Reducing latency and transaction costs
  • Creating innovation in production