Young people in the developing countries are turning into the main propelling force of the market. By 2030, 75% of the consumers in these marked will be aged 18-34. These buyers demonstrate a high level of readiness to purchase premium products. For example, young consumers in Asian and Middle Eastern countries spent up to three times more on premium products than their peers in developed countries.
Elderly consumers are also keeping up. Contrary to the popular belief, they actively purchase household items and spend money on traveling. In Western countries, 30% of elderly consumers have a high income exceeding $100,000 per year. This group more frequently purchases goods for house or garden.
The middle class, despite instability, continues to spend money on the goods beyond essential. Studies demonstrate that consumers with average income in Europe intend to increase their spending on leisure and travels.
All of this indicates that FMCG companies are forced to review traditional ideas about the purchasing power of various segments. This implies the necessity of a differentiated approach to different markets. In Europe, for example, it is the segment of household items adapted to the demands of wealthy elderly customers that requires attention. In the middle price segment, an effective strategy may involve adding premium characteristics while maintaining affordable prices: using environmentally friendly packaging for household chemicals, adding natural ingredients to homecare products, creation of unique flavors for snacks or beverages, or development of innovative packaging formats for traditional products.
What are the changes in the consumer behavior?
Brand loyalty is decreasing in all age groups. In developed countries, over a third of consumers have tried new brands, while 40% have changed stores in search of better prices and discounts. Inflation and economic uncertainty further amplify this trend.
Environmental friendliness of products, while remaining an important factor, is giving way to price availability. In Europe, the number of young consumers willing to pay more for ecological products has decreased by several percentage points from the beginning of 2024.
Wellness industry demonstrates stable growth. Global market of health and well-being goods is estimated as $1.8 trillion with an annual growth of 5-10%. In developing countries, consumers spent two to three times more for wellness products that the residents of developed countries.
Changes in the consumer behavior require FMCG companies to quickly adapt their product strategies. Reduced brand loyalty opens the possibilities for presenting new products and seizing a share of the market. Growing demand for wellness products allows developing new categories with high margins. At the same time, it is important to find balance between environmental friendliness and price affordability of products.
Where to find consumers?
In developed countries, the focus of sales is shifting towards the cities of the second tier, where the cost of life is lower, and the possibilities for remote work are wider. The situation in developing countries, where the growth of population continues in large cities, is completely opposite.
The success of FMCG brands depends more and more on the precise understanding of local specifics and adapting the sales channels to new geography of demand. Expansion to small and medium towns requires changes in the packaging and promotional activities in accordance with the distinctive features of local retail. The rate of distribution is becoming the key factor in the cities and towns of developing countries.
Social commerce, which involves sales through social platforms, is playing a more and more prominent part. Zoomers and millenials are the most active supporters of this growth: they use social media three times more often than other generations.
Despite active development of social commerce, physical stores remain a critical sales channel; that said, they require special attention to organization and efficiency of all processes. When goods are missing from the shelves, planograms are not followed, or price tags are incorrect, it creates a negative experience for the buyers. In the age of social media and the internet, it becomes even more dangerous: many unhappy customers share their experience online, which results in FMCG companies losing their reputation and buyers.
How to attract offline buyers? Answer: process automation
Traditional control of the display of goods through merchandisers and trade representatives has some serious limitations. Manual data collection requires a lot of time, is prone to mistakes, and cannot present a complete picture. As a result, the manufacturers have no idea how their products are actually represented in stores, whether their marketing activities and promotional materials work, and whether the agreements with retailers about the share of the shelves are complied with. All these factors have a direct effect on sales: according to our experience, correct display can boost their rate by 6-8%.
A solution to these problems is presented by merchandising automation. For example, computer vision-based service Goods Checker allows the manufacturers to control the situation on the shelf. A merchandiser simply takes a photo of the shelf, while the system automatically analyzes the correspondence between the display and the planogram, the availability of goods, the correctness of price tags and promotional materials.
As a result, the manufacturer receives accurate data on representation of their goods in each store. This allows for a quick response to the problems, optimization of the work of the field personnel, and a substantial dialogue with retailers. After introduction of Goods Checker, merchandisers draw up reports 70% faster, while the complete audit time is reduced in half. At the same time, the managers always have up-to-date information for decision-making, including violations of the display standards, absence of goods on shelves, and efficiency of promotional activities.
The implementation of merchandising automation systems becomes a necessary condition for successful operation of FMCG companies. It allows to optimize spending for field personnel, improve the representation of products in stores and acquire relevant data for decision-making.
Complexity of the consumer market
The consumer market is becoming more and more complex and fragmented. Technology solutions allow companies to adapt to these changes. Automation of merchandising through computer vision systems makes it possible to boost the efficiency of sales and quickly respond to changes in the consumer behavior.
The companies that implement modern technological solutions faster gain a significant competitive advantage. They understand their customer better, manage the range of products with greater efficiency, and ensure a high quality of service in all sales channels.
