The Future of FMCG: 7 Trends to Watch

Stuart Elmes

 Technology has changed the ways people shop for books, flights, music, hotels and clothes. Now, it’s about to change the way we buy our groceries. Here are 7 FMCG/CPG trends that could up-end the industry in the coming months and years...

1. Digital Assistants and Voice Shopping

If you’ve been following our blog of late, you’re already aware of the drastic impact we believe voice shopping, AI, and digital assistants like Amazon’s Alexa will have on the future of ecommerce. If you haven’t been reading us, just know that industry watchers predict that voice shopping will generate over $40 billion dollars in UK and US revenue alone within the next four years, and that financial analysts at RBC have pegged Alexa as “a potential mega-hit… a product/service that has the potential to materially increase the frequency and intensity of Amazon’s relationship with its customers.” Brands can find a way to use this relationship, and the convenience offered by voice shopping to forge closer relationships with their customers, or they can watch their customers become Amazon’s.

2. Brands Finding Their Voice

As more and more consumers shift to voice shopping, brands will scramble to build an identity in the world of voice shopping, relying on audio signatures rather than visual content to send their message. In 2017, over 20% of online searches were made with voice. By 2020, it’s expected that half of all web searches will be conducted with voice. Last year Google snuck an ad into the daily morning update of its Google Home device, and received immediate backlash from its users. They put audio ads on the shelf shortly after, but rest assured that Amazon and Google will find ways to target consumers with them in the future.

3. Shoppable Advertising and Influencer Marketing Meet Recipes

Shoppable content has been a well-documented hit with both brands and consumers. Removing a complicated mass of clicks, forms, and information that stands between content and commerce is clearly a win-win. Meanwhile, influencer marketing has been growing rapidly, with Adweek noting that 63% of marketers increased their budgets for influencer marketing in 2017. The two trends are quickly merging, as consumers can now click links on social media content and immediately make an impulse purchase. What will this mean for the FMCG industry? We predict that recipes will unite these two trends and have a massive impact on consumer behavior. A viral video of Jamie Oliver whipping up some tacos, if shoppable, could lead a consumer to buy all of the ingredients needed from Amazon or Tesco with just one click. If the recipe is favourited, a family of four might purchase those same ingredients every week for years! Brands that leverage this opportunity could become staples of a family’s diet, while those that don’t sit sadly on the shelves of a supermarket that consumers may not even enter anymore.

4. The Shaving Revolution Moves to Other Industries

If you’ve ever listened to a podcast, you’ve surely heard an ad for Dollar Shave Club or Harry’s. These are two specialized shaving companies that saw that a lot of consumers were sick of waiting for a supermarket clerk to unlock a display case full of overpriced, overcomplicated Gilette razor blades. They used the internet to market simple, high quality razor blades that would conveniently be delivered to your door as needed at a fraction of the price of their competitor. The Dollar Shave Club’s revenue grew from $4 million in 2012 to $240 million in 2016, at which point they were sold to Unilever for $1 billion. Online and social media marketing will continue to give specialized upstarts the opportunity to challenge brands that previously seemed invincible, as they can reach consumers directly with targeted ads and offers, and ship their products extremely quickly. Customized soaps and shampoos, coffee and tea direct from farmers, or any number of products tailored to the unique desires of individual consumers could be the next billion dollar companies.

5. Dramatically Improved Shipping Speeds Will Change the Nature of Online Shopping

In the days of 4-6 week shipping times, customers would only buy non-perishable, non-essential goods online. Things like books, toys and outdoor equipment were the most common purchases made online. As Amazon and others create unimaginably fast logistics networks, consumers will adapt to buying far more FMCGs online. Amazon has already begun offering 2-hour delivery in a number of US cities and is actively promoting FMCGs to those with PrimeNow membership. As customers get used to the idea of having ice cream delivered to their doors before it melts, we feel it’s safe to assume that fewer and fewer of them will be willing to drive to their local supermarket to shop. Other entrepreneurs are creating similar concepts, like Robomart, an autonomous, app-controlled car that drives around a city delivering groceries and prepared food from the retailers who lease it. While a novel idea, we feel 2 hour delivery with an unlimited selection of products is more likely to catch on than waiting for the robot car to come around the corner with whatever stock it happens to have at the moment.

6. Goodbye, Checkouts!

You hate the checkout line. I hate the checkout line. And self-checkout, which once seemed to promise greater ease and convenience, is loathed by consumers. In 2016 Amazon opened the AmazonGo store in Seattle which offers the promise of a better way. I’ll let USA Today explain how it works: “Customers tap their cellphones on a turnstile as they walk into the store, which logs them into the store’s network and connects to their Amazon account through an app. The service is called Amazon Go. It uses machine learning, sensors and artificial intelligence to track items customers pick up. These are then added to the virtual cart on their app. If they pick up an item they later decide they don’t want, putting it back on the shelf removes it from their cart.” Sounds better than flipping through Hello! Magazine surrounded by screaming toddlers, or waiting for a spotty, overworked 19 year old to greenlight your bottle of Chianti, doesn’t it?

7. Amazon is Shaping the Future of FMCG Consumption, Whether you Like it or Not

If you’ve been paying attention, you’ll notice that the trends and technologies that we are expecting to shape the future of the FMCG industry are being driven by one large, impossibly ambitious, innovative, and ruthless company. Amazon has found ways to make grocery shopping easier, faster and less frustrating. It will use these trends to push its own products and platforms, and if you can’t offer your consumers the same convenience, we don’t expect them to be your customers for much longer. If you don’t know how to keep up, that’s where Adimo comes in. Our products and solutions like AdimoVoice can allow you to offer the consumer a seamless, stress-free ecommerce experience.