The turbulence and unprecedented events of 2020 caused losses, supply chain shortages, and revenue upheaval for companies across every CPG sector. Forecasts and revenue expectations couldn't keep pace with the rapid changes in the economy, or where shifts in consumer demand would pivot. While 2021 still faces some of that turbulence, there are many signs that consumption and demand are back on the upswing. According to the National Retail Federation:
2021 retail sales – excluding automobile dealers, gasoline stations, and restaurants – will grow between 6.5% and 8.2% over 2020 to between $4.33 trillion and $4.4 trillion.
As retailers see consumer demand for more products, both in-store and online, brands and manufacturers are in a perfect position to rethink their revenue department’s outlook and strategy for a successful 2021 and beyond. In this article, we'll explore how to capitalize on recovering markets and seize new, unforeseen opportunities for CPG growth.
One of the largest areas of growth that emerged from 2020 was e-commerce. While e-commerce and online shopping had been steadily growing for years, travel restrictions and stay-at-home orders made shoppers turn to their computers more than ever before.
Companies that are able to position themselves to provide easy, convenient shopping experiences will be able to drastically increase their digital footprint this year. The digital consumer should be your top priority when developing your ideal customer profiles, personas, and customer-facing strategies.
New Competitive Lines in the Sand
However, it's not as simple as every retailer and manufacturer opening a virtual storefront. Because everyone is competing for consumers' virtual attention, marketing and competition have also evolved.
In traditional markets, larger brands have a clear advantage — they can afford premium shelf space and have the physical distribution channels needed to get in front of shoppers. While larger brands still have the competitive edge online, it's not as clear-cut. Much smaller brands with a great message and unique sales strategies are able to substantively compete with large and national brands more than ever before.
Demand for Variation
As part of the demand for variety (and the need to stay ahead of similar competitors), retailers and manufacturers should prioritize innovation. New products that meet new consumer needs, personalized products, and expanded product lines are all likely winners in 2021.
Customer Experience Is Key
Customer experience, while a priority in 2019 and earlier, became the central focus of successful businesses in 2020. In the realm of digital shopping, that translates to omnichannel marketing and omnichannel shopping. Your consumers want a seamless experience as they switch from device to device and channel to channel. But it also requires seamless integration with physical store locations in each shopper's area. If your virtual and brick-and-mortar stores don't cooperate, especially as restrictions start to loosen, you're competing against yourself.
Earlier, we discussed shelf space as a large factor in competitiveness. Online stores with direct-to-consumer supply lines and distribution channels have sidestepped the fight entirely. They don't need shelf space to get the attention of shoppers who are increasingly comfortable shopping online.
However, just like companies had to fight for space on shelves, e-commerce brands have to compete for time and attention. Companies that have unlocked the formula for reaching online shoppers and can scale quickly are in a position to become a national competitor.
How can smaller companies beat out major brands?
- Values: Small businesses that use value marketing and have a strong message resonate more deeply with audiences that align with their customer personas. Customers are no longer restricted to a small array of options, so they can turn to brands that suit their personalities, lifestyle, and core values.
- Personalization: Smaller businesses can't always compete on scale, so they focus on personalization and a personal customer experience.
How can medium businesses take the lead?
- Leverage innovative go-to-market (GTM) strategies: Established companies have data and understand their customers’ trends, demands, and shopping habits. Parlaying this knowledge with a revamped GTM can provide insights to know when and how to scale without taking as much of a risk.
How to Capitalize
Regardless of your company's size or experience with e-commerce, now is the right time to capitalize on market changes and refocus your revenue departments on the new shopping environment. Follow these steps:
1. Focus on the details in your marketing approaches.
Digital marketing allows you to create striated, specific strategies based on detailed insights. Invest in research to gauge market fit and to test new tactics and messaging. Dive into your website’s analytics to see where leads fall out of the sales funnel, and correct those gaps.
Most importantly, build a robust ideal customer profile (ICP) and buyer personas that include all the details of how your ideal customer shops, what their interests are, and what their evolving needs are.
2. Align your revenue departments instead of keeping them siloed.
COVID-19 and work-from-home made interdepartmental communication a challenge. Now, more than ever, it is time for companies to find ways to increase that communication. If there's a disconnect between marketing and sales, it will directly translate to your customers’ experience. Develop strong leadership to create cooperative go-to-market strategies that encompass unified sales tactics and marketing campaigns.
3. Focus on customer experience every step of the way.
An omnichannel marketing and sales approach allows customers to interact with your company at their convenience. Shoppers want to be able to use social media, chatbots, websites, and physical stores without missing a beat. Investigate different web platforms and CRMs that allow you to provide that cohesion.
4. Embrace new.
Some old-schools sales principles still work, but not without the integration of new-age. Set your revenue departments up for success with access to up-to-date tools, training resources, and incentives to stay ahead of the curve. Your revenue teams should feel comfortable testing out new strategies and creating new methods of selling and serving in 2021.
Don't Miss Out on 2021's Top Performing Trends — This Is the Year to Explore New and Online Markets
The trends you don't want to miss in 2021 are (i) consumers settling into online shopping and (ii) the combination of in-store and online shopping through omnichannel approaches.
Start now with a period of experimental marketing and a heavy focus on data collection so you can start to build ROI forecasts and ROA predictions you can trust. Jumping on board can be a tough transition, so make sure you have the insights, resources, and support you need. Contact House of Revenue today to get started.