New Report on State of Consumer Products Industry in 2018: Globalization, Digitization are Key

Pivot International  |   April 17, 2018

Global consulting firm Deloitte recently released their 2018 Consumer Products Industry Outlook, a comprehensive look at the state of the global consumer products industry.

There are several takeaways from the report that are of special interest to any company working in the consumer products industry. Here’s a quick rundown.

Globalization is key to driving business growth

While the U.S. economy is slowly, but steadily, growing, many businesses are looking to emerging markets to achieve greater growth.

Emerging markets, or markets in developing countries, are expanding faster than those in developed countries, partly due to issues like market saturation in the developed world.

In addition, much of the population increase that is to come in the next 20-30 years will happen in developing countries. These countries already have greater proportions of Millennials (people under the age of 35) and of Generation Zers (people under the age of 21) than the U.S. As population growth in other countries continues to surpass our own, this trend will continue.

This, plus the rise of the global middle class, is creating ever-increasing demand for consumer products.

One important point the report makes is that expanding into these emerging markets doesn’t have to mean going it alone. Many Western companies are strategically partnering with local companies in the countries they’re moving into. These partnerships not only gives the expanding companies access to a new set of consumers – it can also be helpful in navigating regulations, establishing a supply chain, and more.

Digitization becoming increasingly important as differentiator

The Internet of Things isn’t just transforming the manufacturing industry. It’s also transforming – indeed, it already has transformed – the world of consumer products.

Consumers are coming to expect that their devices – whether that’s a fitness monitor like a FitBit, or an electronic toy that pulls data from the internet – be able to interact with each other and share data seamlessly. Companies developing products that include elements of digitization will do best to plan for more interconnectivity, not less.

But digitization isn’t only affecting final products. Consumers are using digital devices to learn about products they’re interested in, make purchases, and build ongoing relationships with brands. Consumer product companies must ensure that they’re offering consumers digital accessibility throughout the purchasing journey.

Innovation is bolder and faster

As we see game-changing technology like 3D printing, the IoT, and virtual reality become more and more mainstream, consumers are demanding better, faster innovation – and companies are having to get creative.

More product development companies are turning to new ways of harnessing innovation. Crowdsourcing is just one example. Some big brands are even scouting small startups and entrepreneurs to invest in and shepherd toward success.

Finally, many companies are revisiting some of their most successful products and revamping them for a new generation. This is something my company, Pivot International, does often in our work with consumer product brands.

The consumer product market is changing in expansive, exciting ways. Companies that want to stay relevant throughout these changes must become more agile, stay flexible, and embrace innovation to a degree they perhaps never have before. For more on this topic, read “3 Global Realities Every CEO Needs to be Aware of.”