Insights, trends, shopping experiences – what shaped the FMCG market and retail in 2022?
The year 2022 posed a number of challenges for manufacturers and retailers. The pandemic, war, inflation and supply chain disruptions have all changed the market and, consequently, the behavior of consumers. What were the most popular trends of 2022 drawing to a close and why?
The massive saturation of the FMCG market is making it increasingly difficult for brands to stand out on the store shelf. Manufacturers are doubling their efforts to attract customers’ attention, win their trust in the brand and make them finalize their purchases. This year was no different in this respect. What shopper trends were observed on our market in 2022?
The FMCG market is among the fastest-growing ones and yet resilient to all kinds of crises. So it is no surprise that during the pandemic (primarily in 2020) the FMCG industry recorded double-digit increases. The introduction of sanitary restrictions resulted in an increased value of the shopping basket, with a simultaneous decrease in the frequency of visits to shops. The year 2021 somewhat cooled pandemic trends, but at the same time became a testing ground for manufacturers and retail chains. On the one hand, previous consumer behavior adapted well to the new reality, but on the other, the “need of the moment” gave rise to new habits and preferences, so retailers had to redesign paths to store shelves and checkouts, because the customer – seeking convenience – wanted at the same time to pay for it as little as possible. The year 2022, in turn, was characterized by rampant inflation, which left a powerful mark on the value of the shopping basket. Besides the price, which is surely the most important shopping determinant for most Poles nowadays, there appeared (and still exist) other factors influencing consumers’ decisions. So what shopper trends could be observed in our market?
- Ecology and sustainable development.
- Localness.
- Convenience and positive shopping experience.
Below we discuss those trends that also drew the attention of manufacturers and retailers in Poland during the past year.
Eco-mmerce – shopping with the environment in mind
Disposable face masks, latex gloves and disinfectants in plastic bottles became a symbol of the time of the past pandemic. Despite the increase in the amount of plastic waste, more and more consumers are now paying attention to whether a given company supports green solutions.
A responsible approach to environmental protection contributes to building a positive customer experience. From a practical standpoint, this is also important since emotions strongly influence consumers’ purchasing decisions, and society is much more aware now than it was, say, 10 years ago. This can be confirmed, for example, by the survey we conducted during a Productive24 webinar with Maspex representatives. 95% of those surveyed stated that as consumers they were more likely to buy a product from an environmentally responsible company.
Source: Productive24
The intention of manufacturers and retailers in the battle for customers is to elicit the “wow” effect, as a result of which many innovative products emerge on the market. This topic also came up during the last edition of The Food Market & Retail Forum. According to experts in the field, the modern consumer is looking for “trusted” food – with few ingredients and a short shelf life, with clear information about its production method, without the use of fertilizers or preservatives. Consumers are now bold and unafraid to experiment and go for alternative solutions, e.g. by choosing vegan products, which are gaining in popularity year by year. What foods are manufacturers working on? For example, work is already in progress to create rice based on yellow pea protein, vegetable “tuna,” or to reuse recycled bread products (e.g. beer, oil, cosmetics). Such utilization of “second-hand” food helps to reduce the problem of overproduction and discarding of excess food (large bakeries waste up to a ton of bread a day!).
But ecology is not just about the product itself. This idea also applies to its entourage, and that too at the highest level. Paper bags and packaging are not enough for consumers. They expect broader, innovative measures. Trade marketing departments are well aware of this and start to rely on display units made of natural materials, such as wood or cardboard (for example Maspex and their points of sale with the FSC certificate), refill stations – mainly for cosmetics and household cleaning products (Yope and Carrefour), or stop issuing printed brochures (IKEA). Those who fail to go green now run the risk of being “left behind” soon, giving way to socially responsible brands.
An increasingly informed (large) part of society, especially those better educated with strong purchasing power, will not tolerate the disregard for the concept of sustainability, let alone the deliberate misleading and greenwashing by manufacturers (deliberate deception of the customer through creating a misleading impression that the company – usually a large corporation – offers products developed in the spirit of ecology and for motives other than solely to increase profits). Among entities staying one step ahead on environmental issues is, for example, Danone, a company which at the start of 2022 was awarded the B-Corp certificate, thereby joining the group of the “Best for the World brands”. In accordance with their mission: “One Planet, One Health”, the Danone Group have committed themselves to making all product packaging in their portfolio 100% recyclable by 2025, while the organization itself will achieve climate neutrality by 2050.
Local products – local prosperity
The local origin of products is nothing new to Poles (especially those who still remember the communist era). For many years they suffered the consequences of a closed market, so their purchasing decisions inevitably focused on products made in their own country. Today, the localness of a product does not only mean that it was manufactured in Poland – it should also come from producers located within a range of up to 50 kilometers from the place of sale.
OThe revival of love for local products is not only a result of pragmatism related to the climate crisis or supply chain woes, but also a yearning for the flavors of childhood. There are also other benefits associated with the localness trend:
- Healthy society – it is believed that local products are “more” natural and often free from preservatives, they have a short expiry date – so they do not linger long on the shelf,
- Local prosperity – as products come from local suppliers, the sales profits “stay in the country,”
- Clean environment – manufacturing without fertilizers and huge emissions from transportation.
Za ciekawy przykładOne interesting example of localness can be vertical farms, often called urban agriculture. They are an interesting alternative as they do not require large areas of land, 90% less water is used in their production and they do not require transportation.
Vertical farming – the activity of growing crops in many layers, one above the other, inside a building or under the ground, often in a specially controlled environment (source: Cambridge Dictionary).
One of the retail chains that have located plant-growing structures within its stores (mainly micro-leaves such as arugula) is Carrefour. This allows supermarket customers to put fresh produce grown right beside into their shopping basket during their daily round of shopping. In addition, knowing that plants grown in this way are environmentally friendly (they minimize the carbon footprint) and are produced all year round, it is predicted that customers will be increasingly eager to reach for them.
Convenience stores, aka quick shopping around the corner
Weekend family trips to the 0 are slowly becoming a thing of the past. This does not mean, however, that Poles have stopped shopping in discount stores. On the contrary – they still visit them but are becoming more positive about compact stores. For 82% of the surveyed, close distance from home is more important than the store format. This explains the growing interest in modern convenience chains such as Żabka. Convenient solutions, a broad package of additional services, long opening hours and a favorable location attract busy customers. Successive improvements and novelties make this store format even more attractive.
That was the case with Żabka – the arrival of a new format of self-service stores called Nano has met with great applause. Especially that some of them are designed in the store-in-store model and located at railway or subway stations or in shopping malls, where there are crowds and a big rush. With an innovative authorization method, a machine learning-based camera system that monitors the products put into the shopping basket, and automated payments, commerce is entering a new level supported by artificial intelligence. As a result, manufacturers must also take into account the expectations of express store customers, which manifests itself, for example, in the development of products with reduced weight (single-serve) – especially with this group of consumers in mind. Retailers, too, are launching new services to accelerate customer service, which is extremely important in on-the-go chains. A good example here is “Robbie,” a robot that prepares hot-dogs for Żabka customers, relieving the workload of store employees.
The introduction of breakfast foods or “fit” ready meals is a response to the growing demand of customers leading fast and active lives. Such products have found their way onto the shelves even in such places as gas stations (e.g. Orlen promoted them through influencers).
For many, a convenient shopping experience is also synonymous with no queues or interaction with a cashier, and fast payments. AI-powered self-service autonomous stores, while growing in popularity, still require the shopper to visit the point of sale. An alternative is q-commerce (quick commerce), an express sales model – the “successor” to the next-day-delivery (NDD) service. This is a response to the needs of those customers for whom the 1-2 day delivery time for online orders (even longer in large cities) was a strain on their patience. As a result, so-called dark stores started to appear in Poland as well – warehouses located in city centers from which orders are picked up directly by couriers and delivered into the hands of customers at lightning speed.
New technologies in trade marketing
Looking from the side (from the customer’s perspective), it might seem that trade marketing mainly operates through commercial promotions, free samples, testers and POS materials, and it is with these tools that it achieves its goals of raising brand awareness, increasing market share and developing specific categories. However, this branch of marketing does not miss out on technological innovations either. On the contrary, manufacturers are taking interesting initiatives to create the “wow” effect, such as equipping displays with multimedia or technologies supported by AR and VR. The traditional POS design has also evolved to create interactive stands. Such touchpoints (places of contact between the consumer and the brand) are still a rarity, designed to draw attention, make people curious and encourage them to get to know the product. In the process of creating stand designs, brands are also increasingly using elements of sensory marketing, enriching the customer’s experience at the point of sale with, for instance, olfactory or visual stimuli.
Even better purchasing processes
As new purchasing methods are being developed, it is equally important to continuously improve the shopping experience of customers. Almost every week we receive market reports about implementing or piloting new improvements to the shopping process execution, such as:
- scan&go – scanning product bar codes with a phone and application installed on the device, and mobile payment for purchases,
- click&connect – making online purchases with the “pick up in person” option at a selected point,
- drive-thru market – placing an order using a website, application or on the spot and picking up the order at the point-of-sale window, without getting out of the car.
Omnichannel – consistency of customer experience
Without doubt, customers are becoming more and more demanding, and their shopping behavior is constantly evolving. FMCG manufacturers are therefore faced with a tough nut to crack, as they must not only instantly respond to these changes, but often predict them as well. Today, in the battle for the customer, the synergy of online and offline channels can provide a decisive advantage.
Omnichannel is not only a sales policy strategy, but also a way to communicate with customers. It is based on a holistic approach to sales and promotional activities, ensuring consistency in the reception of addressed messages. Moreover, it improves the image and recognition of the brand, increases trust among customers and increases the volume of sales (omnichannel customers who buy using both online and offline channels generate twice as many sales as those who choose only physical stores). The advantage of the omnichannel is primarily the consistency of activities, which translates into a coherent consumer experience. In contrast to the multichannel strategy, where the objective is more to reach as many people as possible, omnichannel focuses on increasing customer retention, i.e. building customer loyalty towards the brand, by giving them the opportunity and freedom to finalize their purchase in any channel – where they find it most convenient – in accordance with the saying: “your customer is everywhere, so you have to be there with them, too”.
Besides, customers themselves recognize the need for such an approach, as evidenced clearly by a report from the Chamber of the Electronic Economy conducted by the Mobile Institute. The report reveals that:
- 96% have completed a shopping activity of any kind on their device,
- 87% find it important that the brand is available in multiple channels,
- 82% have observed advantages of multi-channel shopping,
- 63% have stated that information on the Internet encourages them to visit a land-based store,
- 61% buy the same products or brands through multiple channels.
Taking into account that omnichannel strategies enable customers to “freely” wander between sales channels and brand touchpoints, while minimizing their effort through the availability of the brand and product information “at an arm’s reach,” combining them into a single, integrated system that will work like a well-oiled machine is necessary from the perspective of building customer-brand relationships. Therefore, promotional and sales activities cannot be isolated from one another, or other areas, but on the contrary, they should create a symbiosis, ensuring that customers receive the best possible care regardless of the channel.
Year 2023: the world of BANI, resilience and agility
The VUCA concept describing the world as uncertain and unstable (due to the high dynamics of ongoing changes and the difficulty in predicting them), which has been circulating for the past 40 years, is gradually losing its relevance. All due to the pandemic, war, inflation or the limited availability of raw materials. Nevertheless, it has not been discarded altogether, but enriched with elements that have become more prominent over the past two years. What so far has been changeable and unstable in the world of VUCA, in the world defined as “BANI” (an acronym for the words brittle, anxious, non-linear, incomprehensible) is treated as fragile and somewhat unreliable. Uncertainty has now turned into social anxiety. The complexity of things and phenomena has upset the logic of cause and effect. What was previously seen as ambiguous has become incomprehensible and illogical. If in the VUCA world results were difficult to predict, then anticipating them in the BANI reality is virtually impossible.
Peter Drucker
The ability to quickly adapt to life in a complex and chaotic reality known as resilience becomes a weapon in this battle. It is based on self-regulation, mental toughness, empathy and flexibility. Such a set of qualities determines a growth of awareness in many spheres of life, but it also applies to business. Way back in the 20th century, Peter Drucker formulated the thesis that “the best way to predict the future is to create it,” which in a chaotic reality full of inconsistencies and uncertainties is still a valid observation. Companies therefore need to become agile so that they can cope with the dynamically changing business environment. This smart methodology is not (as it might seem) reserved solely for IT companies. Values such as openness, flexibility and continuous commitment to excellence will be a solid foundation for operation in the world of BANI.
