The global consumer packaged goods market is booming. A report from Markets and Markets showed that international image recognition is the CPG industry is likely to reach $3.7 billion by 2025.
As the industry continues to grow, several trends are emerging. More consumers than ever are shopping online, making it difficult to survive for brick-and-mortar retailers. And now, with COVID-19 crippling offline businesses, online retail is set to skyrocket.
But here's the twist. People are still shopping offline, giving brands a hard time figuring out what the marketplace wants.
If you can relate, read along, as this post delves deep into the biggest CPG industry trends you're likely to witness in 2021 and beyond.

Location-Based Deals and Proximity Marketing
E-retail in the CPG industry is surging, and we'll come to that in a minute. But one sure thing is that brick-and-mortar retail is here to stay. Even though the COVID-19 pandemic has forced people to shop online, people are stepping out again.
But technology is playing a pivotal role, even in offline retail. Almost all customers carry mobile devices when shopping. This has given rise to the concept of proximity marketing.
Proximity marketing is a marketing technique in which you send targeted content and offers to customers when they're in the vicinity of your physical outlet. It utilizes beacon and QR code technologies.
Let's say you've installed a beacon device in your store that covers 100 meters radius. If a customer enters the range, the beacon will send a push notification with an offer that'll encourage the customer to step inside the store and make a purchase.
In addition to beacons, CPG providers are also using a QR code generator with logo to streamline their proximity marketing efforts. You can put up a QR code outside your store and encourage people to scan it in exchange for some rewards or benefits.

The Rise of QR Codes
We discussed in the previous point how CPG brands are using QR codes for proximity marketing. But the applications of QR codes don't end here.
CPG brands often put up a custom QR code on their product packages linking to useful information. The related information can be product ingredients, recipes, tips, tricks, or other information to improve the customer experience.
Many brands also use QR codes to promote their digital channels. In this era of digitization, all CPG brands are focusing on building a robust online presence. But with SEO and digital marketing being hyper-competitive, CPG brands are struggling to gain attention online. One solution to this problem is the use of QR codes to promote digital channels.
CPG brands are including QR codes on their packages that link to their website or social profiles. Customers can scan the codes and get directed to the brand's online store, website, and social media accounts. This way, CPG brands can bridge the gap between offline and online retail.

Direct-to-Customer Marketing
Currently, most CPG brands rely on intermediary marketplaces like Walmart and Amazon to sell their products. This model has two drawbacks. First, CPG brands have to compromise on profits, as the intermediaries take their share of the commission. Second, it impedes customer interaction and engagement. CPG brands can't engage with their customers and provide them with personalized experiences.
As we move into 2021, this seems to change. CPG brands are investing heavily in D2C marketing and selling to better connect with their consumers. One visible change is the rise of self-managed eCommerce stores. CPG brands are launching their eCommerce websites to sell online instead of solely listing their products on Amazon and Walmart sites.

Big Data and Predictive Analytics
Data is the new fuel for every industry. The more information a brand has, the more it can engage its audience. As CPG brands go online, Big Data and Predictive Analytics have become major trends. Retailers have made data collection and analysis a priority to find practical insights.
The relevance of data analytics is high because of the enormous flow of customer data. Prominent CPG brands, like PepsiCo, are utilizing Big Data to provide a targeted, personalized experience to their customers.
The unpredictability of customer behavior is another reason why Big Data and predictive analytics is gaining so much popularity in the CPG space. The COVID-19 pandemic has taught CPG retailers that anticipating what their customers are expecting is the key to staying afloat in times of crisis. Hence, CPG brands invest in predictive analytics to see the changes coming and prepare for them accordingly.

Artificial Intelligence and Machine Vision
Artificial Intelligence (AI) has made its way to the CPG retail industry, and the changes are visible. Machine vision is an application of AI that can analyze vast amounts of visual data.
CPG retail stores have hundreds of shelves and products, and machine vision makes their tracking and analysis easy. CPG brands can use machine vision technology to determine if their in-store shelving and displays are adequate or not.
AI also mingles with Big Data to provide actionable insights. Most CPG brands use AI to make informed business decisions. AI can enable fast data analysis and generate quick, accurate insights. Businesses can then use this information to understand their customers' requirements and predict future trends or developments.

The Rise of IoT Retail
The rise of online retail is arguably the most significant CPG trend of the decade. Over the past two to four years, online retail has increased exponentially. And now, with COVID-19 in hindsight, customers are shopping online for all kinds of products. As we step into 2021, digital retail will continue to increase as CPG brands are continuously moving online.
But the growth of online retail is not a new trend, as we've been witnessing it since the beginning of 2020. However, a significant trend that could revolutionize the CPG industry shortly is the rise of IoT retail.
You must've heard about how Amazon is providing cashier-less, staff-free, and self-service in-store experiences. Customers can walk into the store, pick the items they want, and then complete a purchase by paying on IoT-powered POS portals.
Experts consider this trend huge because, despite eCommerce growth and COVID-19, people aren't giving up physical retail. But they surely want to stay safe and avoid human contact.
Staff-less grab-and-go stores turn out to be an ideal solution to this problem. Many CPG brands are adopting this concept, and in the next couple of years, these stores could even outnumber regular retail stores.

Developments in Omnichannel Retail
As discussed, people are shopping online. But they're not giving up physical retail either. What does that imply?
In a nutshell, customers want brands to sell both online and offline. On cold and chilly days, they want to stay at home and order stuff online. And on bright and sunny days, they want to step out and shop from physical stores. As a CPG brand, it'd be a decision to make whether you should sell online or offline.
However, most CPG retailers are adopting omnichannel marketing and selling. They're selling on both offline and online channels to provide their customers with a unified experience. If you want to survive in this vying market, you'll also need to embrace omnichannel retail.

Increasing Brand Loyalty
Customers want to stick to brands they can trust. This leads to two trends. One, things will be difficult for new players as customer acquisition will become more challenging. Customers are not willing to give up the brands they trust to try out new products.
Second, existing CPG brands will have a significant advantage. If you already have a loyal customer base, you'll have an unparalleled competitive advantage.
However, you'll need to take the measures necessary to earn and sustain customer loyalty. This means investing in customer service, providing personalized experiences, and making customer satisfaction a priority. If you continue to care for your customers, they'll stay loyal to you.

Wrapping Up – Where’s the CPG Industry Headed?
If you're a CPG brand, you might be trapped in turmoil. The CPG industry is witnessing a large-scale transition, where brands are moving from traditional online and offline selling tactics to proximity marketing and omnichannel retail.
Simultaneously, the market has become hyper-competitive and saturated, with bleak scope for new entrants. But there's still a big void, as many brands are still struggling to figure out their customers’ needs.

Author's Bio: 

Apoorva Hegde is a Content Marketer at MobStac.