“Makers of consumer staples are resorting to aggressive discounts to overcome an unexpectedly persistent problem: Their industry is barely growing”, this is how a recent article in the WSJ started. Indeed growing sales at FMCG/CPG companies has never been so hard… According to Nielsen for the last three years unit sales of consumer products have been largely flat in the US. On the other hand Europe is not picking up, and many emerging markets have decreased their stellar growth of the last years…
Consumer spending squeezed by what seems to be a “never-ending crisis” and “need-more-money governments” is moving steadily towards cheaper retailer brands and as a result, the 2-5% yearly price increases that CPG manufacturers used to pass onto the consumer seem to be a reality of the past. (98 product categories, almost one third of total categories tracked by IRI in the USA recorded price decreases in 2013, up from 57 in 2012.)
Most retail and CPG CEOs believe there is an opportunity in e-Commerce to grow sales… In fact e-Commerce is projected to grow at 14% from 2012 to 2016 globally and e-Commerce sales will likely reach $ 1,4 trillion until 2016 according to Forrester Research. The digital opportunity is such that it may ensure comfortable market leadership, should current leaders tap into it, or otherwise may turnaround entire markets, should challenger companies be the first and the best to deal with e-Commerce.