If you’ve been following RangeMe’s ongoing coverage of the Coronavirus’s effect on the consumer packaged goods (CPG) industry, you’ll know that problems are emerging. With these issues arising, a need for a digital strategy is necessary to keep the retail industry moving forward, and this solution should become a common practice in CPG.
Currently, the CPG/retail industry faces the following issues:
- Disruptions to the supply chain: Retailers and suppliers are struggling to bring their products into the United States as many factories operate in China, the epicenter of the coronavirus and where mass quarantines have been implemented. For countries that have been affected heavily by the coronavirus as well as for the large number of companies that are urging employees to stay home, production and shipping of goods have hit a low point, resulting in the need for new ways to source products from different countries.
- Pandemic pantries and aggressive shopping: Not only are retailers facing disruption in their supply chains, they are also facing a decrease in casual shopping as consumers are stocking up on groceries and health-related CPG items such as sanitizers, disinfectants, gloves, and more. As a result, products are leaving the shelf quicker than they can be restocked to the point where retailers like Target and Kroger are limiting the number of products customers can purchase.
- Avoiding brick-and-mortar stores: With such uncertainty, not only are customers stockpiling essentials in case of shortages, they are also limiting their trips to brick-and-mortar stores in efforts to limit their exposure to crowded places. By taking to e-commerce retailers like Amazon to purchase necessities, foot traffic is decreasing in places like shopping malls.
There’s no denying the CPG industry has been disrupted in more ways than one. From trade shows to the aforementioned points, players behind the scenes need to make adjustments to how they do business digitally.
For retail buyers and suppliers in CPG
Many retailers are making the decision to limit their employees’ possible exposure to coronavirus. That means they’re canceling travel, avoiding trade shows, limiting large gatherings, and temporarily closing some brick-and-mortar stores. And suppliers are doing alike.
For suppliers, trade shows are used as an opportunity to get in front of retailers. But as we discussed in our post about building a well-rounded strategy, it’s important for a brand to diversify their marketing strategy by intertwining in-person tactics with technology.
For buyers, trade shows are an important part of their product discovery strategy. While travel restrictions continue to be put in place and trade shows are postponed or canceled, buyers are turning to source products online.
Virtual face-to-face opportunities, such as ECRM ESI’s, are a growing solution to the number of trade show and event cancelations. This virtual meeting is an opportunity for suppliers to get their products in front of buyers, and for buyers to learn more about new brands and products for their stores.
Tying product discovery together
The retail landscape is changing, whether it wants to or not, and taking things digital is a huge part of that. Consumer habits are shifting in regards to what products are being bought, the quantity, and how they’re purchased during this time of uncertainty. Both retailers and suppliers are realizing the importance of having digital business practices become a common practice. Stay tuned for our next post where we will take a deeper look into how retail buyers are tackling product sourcing disruptions with technology.