In the year and decade ahead, consumer goods companies must go beyond product to deliver services and experiences that are entirely relevant to the individual consumer when it really matters — while also contributing positively to the world.
With that in mind, here are three trends that are set to shape the consumer goods industry this year:
1. Convenience, redefined. Time-poor consumers will always need quick and easy food options that give them what they want instantly in the moment. For years, brands have been focusing on snacks to serve this consumer need. But for how much longer? With the focus increasingly on healthy eating, might 2020 be the year consumers hit the snacking saturation point?
Today’s technologies open up so many more possibilities to give consumers exactly what they need in the moment. Convenience today is about doing the small things well, focusing on the detail and using digital technologies to deliver something that’s "just right" for each individual when they need it. Home delivery services are already meeting this kind of growing need.
Convenience is just as important within the home. Look at innovations like the Drinkworks Home Bar. This smart drinks machine uses precision on-board chilling and carbonation systems to prepare expertly mixed cocktails, as well as beers and wines, at the touch of a button. By combining deep insights into user behavior with human-centered design and clever engineering, it’s a smart solution that provides next-level consumer convenience in the home.
This level of innovation will oftentimes need brands to look beyond their own four walls. We are seeing an increase in the number of companies looking to shake up the industry through collaborative innovation by developing partnerships and investing in entrepreneurial talent.
The modern approach to convenience requires highly attuned market sensing and adaptive manufacturing becoming more and more important. Of course, margins in some industries are notoriously low, meaning mass-market customization has always been difficult. But some brands are starting to make inroads.
For example, mymuesliallows its consumers to make a personalized blend of ingredients. Cereals, nuts, seeds, and berries — everything in the mix can be tailored to the personal taste of the customer, ordered at the click of a button, and manufactured and dispatched just for him.
There’s scope to go further here, too. Think about how precision nutrition could be combined with dark kitchens and autonomous drone technologies to deliver a personalized meal — of any size, hot or cold — designed specifically for the recipient’s unique needs within minutes of her requesting it. That’s convenience, but not as we know it.
2. Local goes hyper-local In 2020, more of us will be looking to slim down the intensity and environmental footprint of modern digital living. We’re seeking more sustainable, more hands-on, more tangible experiences wherever we can find them. That’s bringing food production ever closer to the home. Local is going hyper-local.
Thanks to huge advances in technology and pervasive digitalization, hyper-local precision horticulture is becoming a viable option for everyone, even on a micro scale. It opens up the possibility for everyone to grow food with reliable results, no matter how little outside space we have – or time to spare.
FarmBot, for instance, has created “humanity’s first open source CNC farming machine.” The horticultural startup’s unique combination of fully automated hardware and a digital platform allows customers to plan and grow their own food, in their own spaces, according to their own needs. Sowing, watering, weeding, harvesting — innovations like FarmBot offer the prospect of labor-free home farming for all.
Consider, too, how Infarmis bringing high-tech modular farming to food production. The indoor farming company created a cloud-based platform that learns, adjusts and continuously improves itself, so each plant grows better than the one before. It can re-create growing conditions from around the world, bringing plants that were previously too delicate, rare or expensive to consumers.
Hyper-local networks also present new opportunities for convenience and radical innovation. Take Alibaba-owned Ele.me(rough translation: “Are you hungry?”), which is leveraging China’s mobile-first economy to rapidly expand its local logistics services to deliver meals (and now other products) across the country. It’s a win-win for consumers, who get fast delivery to their door, and local restaurants, which get access to a larger, digital customer base.
For Alibaba, the aggregated data Ele.me provides is a potential goldmine of new insights into hyper-local patterns of consumer tastes and behaviors. It’s also a low-risk but super-agile way to test out new food concepts and ideas, using individual restaurants to explore which innovations work in one locality before scaling up nationally.
Coty's Magic Mirror
3. Tech takes the lead Technology is now the key accelerator for consumer goods companies looking to achieve hyper-relevance at scale. The ability to blend both physical and digital experiences in individually personalized solutions is a big trend to watch for.
Consider how beauty brand Cotyis changing the way it interacts with end-user consumers through augmented reality. Its Magic Mirror lets you try out different hair colors and find your preferred shade instantly. While the Magic Mirror is currently available only in professional hair salons, it won’t be long before this kind of innovation becomes the norm in retail stores or even at home.
As in many sectors, machine learning is another really vibrant space in beauty right now. Look at what L’Oreal is doing with its Modifaceacquisition. Using augmented reality and artificial intelligence, the company has trained an algorithm for three different groups of skin type in four different lighting conditions that smartphone owners can use to detect and evaluate the unique signs of facial aging.
That’s not only a great new way to leverage L’Oreal’s deep industry expertise and deliver a personalized service for customers, it’s also a highly valuable new source of insights for future product development. L’Oreal says Modiface has led to a new product launch every day and has delivered a 300% boost in conversion.
As the ground keeps moving underfoot in 2020, successful consumer goods companies will capture the value of rapidly evolving digital technologies and focus their efforts on building the capabilities needed to deliver relevance at scale. Getting that right will be the secret to future success and growth.
About the Author Laura Gurski is senior managing director, global lead for consumer goods & services at Accenture.