It’s not news that this past year has had an impact on consumer habits in myriad ways, big and small. Not unpredictably, many people have attempted to offset feelings of uncertainty by seeking out stability, security, and reliability. Things they can count on. Brands they can trust. And it is showing across the industry.
“Trust is now the make or break difference for brands,” touts a recent Edelman report, which noted a 12-point rise in the percentage of people who say they trust most of the brands on their shopping list. In fact, trust is now second only to price when deciding whether to switch to a new brand. All of which is good news for makers of consumer packaged goods (CPG), the companies we all depend on to make sure we have access to the essentials, in good times and bad. In fact, a recent Consumer Brands Association survey reports that 47% of consumers in the U.S. trust CPG companies more now than they did before the pandemic.
But what exactly does the concept of trust entail in relation to the CPG industry? The 2020 Gustavson Brand Trust Index identifies several elements that factor into the equation, among them a positive customer experience, responsiveness, ongoing innovation and product availability. Let’s take a closer look at these.
Customer experience: a happy customer is a repeat customer
With more choices than ever at the click of a button, and an ever-growing, population-wide propensity to shop online, consumers are no longer tied down to any one brand from one purchase to the next. Yet, if they are offered a positive experience and leave a transaction feeling appreciated and valued, the likelihood of their returning to the same brand the next time is greater. This is where the power of advanced analytics to personalize and optimize the customer journey from start to finish comes into play. And knowing that repeat customers spend more and bring in more business, CPG companies are best advised to do everything in their power to boost customer retention—and this begins and ends with trust.
Better offers through accelerated responsiveness
Better consumer segmentation powered by advanced AI solutions that leverage company datasets as well as social media and search engine information is key to developing more accurate profiles of customers. These in turn can be used by CPG companies to build offers in tune with their needs and forecast demand with higher accuracy and agility, getting them one step closer to a goal every business has: knowing what customers want before they themselves know they want it.
Innovation itself is key to keeping pace with new operating rhythms
If necessity is the mother of invention, innovation must be the child of uncertainty. The past year has seen a wave of novel initiatives emerge in the CPG industry in response to sudden shifts in consumer demand, seen in new direct to consumer models and the rise of new eMarketplaces. And as the situation continues to evolve, an ongoing focus on improving existing products and developing better ones more suited to consumer lifestyles in the short and medium term will be key to weathering the storm. Not only that but, over the longer term, it will afford an opportunity for CPG companies to set themselves apart from the competition and make meaningful changes that will drive their growth in the future.
A stronger supply chain will prevail
Optimizing inventory, warehousing, logistics and distribution is a perpetual priority for any CPG company, especially when demand is unpredictable. The power of advanced analytics and AI can be harnessed to make substantial improvements at every point of the supply chain to streamline the product path from plant to shelf, be it in preventing stock shortages, minimizing inventory costs, improving delivery methods, or optimizing fleet maintenance. There has never been a better time to invest in supply chain operations, especially given that product availability has been one of the key drivers of new brand purchases in the past year, according to a recent McKinsey & Company study on changing shopping behaviors in the U.S. in 2020.
In the fiercely competitive CPG landscape and a world where the only constant seems to be change, making gains in any or all of these categories can be the key to enhancing consumer trust now and in the future. With increased trust comes greater loyalty, engagement and advocacy, all of which the CPG market can—and must—leverage to enhance their resilience and strengthen their bottom line.
If you’d like to understand how our SaaS AI business platform Kepler can improve data-driven decision-making in your organization, don’t hesitate to contact us.