Retail recap 2020: The year nobody expected
The start of 2020, like the start of any new year, was full of hope and promise. The consumer packaged goods industry was gearing up for what would undoubtedly be a thriving year with vast opportunities, and the annual trade shows that were just around the corner were full of promise and potentially the Next Big Thing, the product that would take consumers by storm.
But that hope and promise quickly turned into concern and uncertainty as the COVID-19 and ensuing coronavirus pandemic started spreading like wildfire throughout the United States, and across the globe. As anxiety and unpredictability rose to the forefront of many retailers’ minds, the one thing that actually remained was opportunity.
When the pandemic hit, retailers had to pivot and set a course for the new and unknown. E-commerce became more important than ever as consumers sheltered in place. Between the first and second quarters of 2020, e-commerce skyrocketed 30% and US consumers spent $211.5 billion online in the second quarter of the year, compared to $160.3 billion in the first quarter of 2020.
And not only did retailers have to rethink how they sold their goods, they also had to look at the opportunities available and reconsider how they sourced their products, as they got hit with a double whammy of sourcing issues.
First, at the start of the pandemic, consumers panic-shopped and pantry-stocked, leading to an absence of products, from the infamous toilet paper shortage to canned goods to staples like flour and sugar. Not wanting store shelves to remain bare for too long and to prevent consumers from turning to competitors, retailers sought out new suppliers for products consumers wanted and needed. They banked on the notion that if a consumer couldn’t find their standby brand but really needed the product, they’d be willing to try a new brand.
Then, travel was almost instantaneously suspended when the pandemic hit, and along with it, the numerous trade shows that so many retailers, buyers, and suppliers rely on to find new and innovative products that meet consumers’ needs. At that point, online product sourcing was an opportunity that couldn’t be ignored, and evolved from a “nice-to-have” to a “must-have” in CPG. The entire CPG industry was pushed into a digital transformation, shifting to virtual events to meet their goals.
A digital plan became essential for retailers and brands alike, as it was still vital to make connections that could lead to new products. Some connected through digital trade events, taking what would normally happen in person, online. Other retailers, like Meijer, Fresh Thyme or Thrive Market, leveraged platforms to host online sourcing campaigns in place of in-person shows. Still, others worked with companies to host virtual face-to-face meetings, where suppliers had the opportunity to present products directly to category-specific buyers, all online.
Despite all of these challenges, retailers weathered the storm unleashed by the pandemic -- and thrived. CPG is an industry that is constantly moving forward no matter what’s happening in the world around it, which was proven tenfold in 2020. Out of all of the chaos, just like we’d see in a “normal” year, trends emerged that will undoubtedly change how retailers operate and what they’ll be sourcing in the year ahead. Based on data from RangeMe’s recently released annual Retail Recap, here are a few key trends from 2020 that will impact 2021 and beyond.
1. A new category for a new era
While so much of life came to a halt in 2020, some aspects couldn’t be kept down. In particular, product development. People were at home more than ever, working, schooling, living, eating, cleaning and more, and because of this, there was a good deal of product development to help consumers meet their needs in this “new normal” — especially when it came to cleaning and disinfecting. Thus, the personal virus protection category emerged in 2020. The brands that fell under this umbrella, like eOn Mist and Sani Vend, quickly became hot commodities to buyers.
2. Supplier diversity increases
Supplier diversity has seen a steady rise in recent years, and 2020 was no exception. Retail buyers sought out suppliers from diverse backgrounds to boost inclusivity, diversity and economic development and provide broader and more innovative offerings in the CPG industry. Many of the brands that caught buyers’ eyes featured one or more brand certifications such as Minority-Owned Enterprise, Small Business Administration, Certified WBENC, SBA Women-Owned Small Business, National LGBT Chamber of Commerce and more.
3. Sustainability sustains CPG
Over the past few years, products that marketed their sustainability grew 5.6 times faster than conventionally marketing products. That’s 3.3 times faster than the CPG market in general. These findings are a clear indicator of what consumers today value in brands, and retailers have been wise to stock sustainable and eco-conscious products in stores. In 2020, retail buyers leveraged RangeMe’s sustainability collections in their online product discovery, and most products featured in those collections carried at least one — if not more — sustainability certification like Non-GMO, Fairtrade America, Energy Star and Green Seal Certified.
Additionally, health-based certifications, such as USDA Organic or Certified Gluten-Free, saw an uptick in 2020 compared to 2019, mainly due to the COVID-19 virus which motivated retail buyers to search for more health-conscious products like vitamins and supplements to meet consumer demand for better-for-you products.
Though 2020 is behind us, the trends and opportunities it brought forward will undoubtedly help fill the pages of 2021. It’s an exciting year, one full of potential — for healing and for discovery, and, most important, potential to usher in a new era of CPG.
Brandon Leong is vice president of marketing & growth for RangeMe, the industry standard online sourcing platform that streamlines new product discovery between suppliers and retailers. Some 70% of the top 100 retailers in the US, as well as thousands of independent retailers, use RangeMe as an efficient way to discover innovative new products and manage the inbound product submission process.