2015 State of the Industry: Consumer Products
- 2015 STATE OF THE INDUSTRY
- Executive Insights
Senior executives at consumer products companies face many critical strategic questions in 2015. Here, L.E.K. Consulting shares its views on the current state of the industry, as well as the biggest challenges and opportunities for consumer products companies.
What is the Current State of the U.S. Consumer Products Industry?
The industry will be in a major state of flux for the next five to 10 years and will look very different than it does today. The right strategies to help brands succeed along this path are still being defined. The millennial consumer is the strongest driver of many trends facing the industry. They are less connected with historical brands and more informed through the newest technologies. Millennials have created a “sharing culture” driven in part by social media that fosters information sharing in real time and puts a greater premium on consumer experiences. These changes create a challenge for established brands to avoid becoming outdated to an emerging, powerful buying group and to grow their customer base. Companies can also capitalize on opportunities to attract consumers who may switch to their brand by catering to specific needs of consumer segments (e.g., great value, engaging experiences, and differentiated products and services).
While we expect brands to be highly powerful as a general rule, we also see places where consumers are more confident in themselves and their choices where they do not need a brand badge (mostly in apparel and home furnishings). Recognizing where this is and isn’t happening creates both opportunities and threats for market participants.
Furthermore, with the continued evolution of technology and dramatic changes in how consumers shop and make decisions, the marketplace for consumer products is more competitive than ever. Consumers have more choices because it’s easier to learn about and compare brands and products against each other, price is highly transparent across brands and channels, and so on. In the end, this raises the bar for all consumer products businesses as they seek to grow.
Download the full Executive Insights' "State of the Industry" report to read more about the current state of the industry and burning issues that senior executives are facing: Full Report.