The COVID-19 pandemic has led to what is no ordinary economic downturn, upending the Consumer Goods and Services (CGS) industry. Core changes in consumer behavior, supply chains and routes to market have thrown many companies off balance, while few have emerged winners.
Consumer behavior over these past months has drastically changed, permanently impacting how, what and where to buy things, and substantially accelerating the structural changes shaping the industry. In such a volatile environment, it is impossible to forecast and analyze trends based solely on traditional benchmarks and historical data to manage business. Sub-segments such as beauty and alco-bev have been severely affected as home became the new hub and consumers shifted to core staples. With "Health and Hygiene" as the new priorities, the food and home care segments saw a significant growth in demand.
A clearer shift toward ecommerce, rise of the omnichannel and surge in the low-touch economy through digital payments and contactless deliveries have impacted channel and route-to-market (RTM) strategies across the industry. Organizations need to continuously reimagine services to meet evolving consumer needs quickly. For instance, several leading CGS organizations have rapidly developed the capability to manage omnichannel commerce and engagement or forged hyperlocal delivery options.
Additionally, resources and investments will need to be continually reallocated, and companies will need healthy ecosystem partners, not just as allies but also as sources of real-time data and information.
Moving from "now" to "next"
The rules have changed. It’s the beginning of a new era of business, creating opportunities for organizations with the courage and foresight to change more than what their immediate needs demand.
While organizations have repurposed themselves to respond in the Now, they must also spend time today identifying new growth paths. Lessons from the past two recessions suggest companies that balanced growth and cost management outperformed their competition in the aftermath.
This presents an opportunity—and a need—for many companies to build the competences they wish they’d invested in before: to be more digital, data-driven and move to cloud; to have more variable cost structures, agile operations and automated business processes; and to create stronger capabilities in ecommerce and security.