Top Challenges Facing the Consumer Products Industry in 2022 (And How ABW Can Help)
Undoubtedly, the U.S. supply chain took a massive hit during the 2020 COVID-19 pandemic. National and international lockdowns and social distancing measures reduced global capacity for both trade and production to an almost standstill. Business shutdowns, job losses, and significant economic disruptions sent shockwaves across the supply chain ecosystem.
The worldwide lack of goods and items, followed by the inability of the supply chain to keep up with renewed demand following lifted restrictions, has significantly impacted consumer behavior and eroded consumer confidence in brands’ ability to stock the store shelves. Businesses, particularly consumer packaged goods (CPG) companies, need to make strategic changes to regain consumers’ confidence in 2022 and beyond to remain agile and competitive in a post-COVID landscape.
This blog looks at the long-term effects of the pandemic on consumer behavior, what the Deloitte 2022 Consumer Products Industry Outlook proposes we do about it, and, more importantly, how Atlanta Bonded Warehouse can help.
The COVID-19 Pandemic & Its Impact on Consumer Behavior
Extended periods of lockdown and global supply chain disruptions caused by the COVID-19 pandemic have led to rapid changes in consumer behavior, business processes, and the established nature of the U.S. economy as we know it.
It’s unsurprising that anxiety and uncertainty around the availability of regular supplies in traditional brick-and-mortar stores in 2020, coupled with restrictions of movement during lockdowns, saw consumers quickly pivoting to available eCommerce options. Those brands agile enough to start offering rapid delivery options from store to door were naturally favored.
Research from the U.S. Bureau of Labor and Statistics (BLS) predicted that the shift to online shopping would only continue throughout the pandemic’s evolution and beyond. While this may sound good for eCommerce, the pandemic accelerated the trend to ecommerce and away from traditional retail outlets.
Multiple factors contributed to the struggle of manufacturers, warehousing partners, freight forwarders, carriers, and other 3PL companies to keep up. Still, once trade and production could resume, ‘business as normal,’ products did not move as they did before the pandemic. Backlogs at every point in the supply network led to stock shortages, delayed deliveries, rising prices, and growing consumer frustrations.
It is clear that it is much easier to shut down a supply process than it is to re-start it
It’s now almost 2023, more than two years since the onset of the 2020 pandemic and the resultant supply chain crisis. Have we recovered? While strides have been made in certain areas, the consensus is that the supply network has not had a chance to rebound and revert to its pre-2020 state. There continues to be a shortage of goods, and the rollout of deliveries and shipping remains staggered, thanks to port crises, a lack of shipping containers, personnel shortages, shortage of raw materials, lack of available manufacturing/processing line time, and backed-up orders that remain in the pipeline.
Considering the above challenges, it’s little wonder that consumers and clients have either developed “contingency plans” for their preferred purchases or have discovered or are actively looking for substitutes.
So, where do we go from here?
Findings from The Deloitte 2022 Consumer Products Industry Outlook
In their 2022 Consumer Products Industry Outlook, Deloitte highlighted one of the top challenges for CPGs in 2022 was winning back and rebuilding consumer trust. According to their findings, companies have started investing significantly in initiatives to restore consumer confidence. They have utilized three pillars on which to build these trust redevelopment strategies:
- Transparency. Consumers expect more transparency and honesty from the companies with whom they choose to do business. Enterprises that are not adopting an attitude of open transparency risk losing their customer base for good. Six in ten companies are investing significantly in strategies to increase the transparency they provide to consumers and stakeholders.
- Digital engagement. Roughly 50% of participating companies stated that they believed they would lose customers if they failed to engage with them in a personalized and tailored manner. CPG companies must treat and engage with consumers as individuals if they want to continue growing. Digital engagement systems and strategies are vital for offering a more personalized service.
- The future of work. CPG companies are facing an immediate and ongoing shortage of skilled labor. To fill these gaps and prevent a future shortage in labor, an overhaul of the established workplace as we know it needs to happen. Many companies are working towards this already, placing their employees at the center of their workplaces and ambitions and adopting values emphasizing inspiration, teamwork, reward, and a sense of personal purpose in the workplace.
Increasing Transparency and Trust Through Full Inventory and Order Visibility
Reestablishing consumer trust is not an option for CPG companies – it’s necessary. As the Council of Supply Chain Management Professionals (CSCMP) explained in a Hot Topics Customer Promises edition: “[R]elationships are forged on [our] ability to reliably deliver performance-based products and services to customers that aren’t just critical to their business, but also to their customers and downstream supply chain participants.”
The CSCMP highlights increased visibility into inventory management as one way to rebuild client and consumer trust. The ability to monitor a client’s order, from request to fulfillment, with no errors, and respond quickly to client queries on the order’s status is key to a business’s success.
“Across the supply chain ecosystem, you need to track orders from request through fulfillment and manage the people, processes, and technology that touch the order as it moves through its lifecycle. This allows you to meet and exceed delivery deadlines and equipment uptime requirements, build and maintain brand loyalty, and avoid penalties.”
Complete end-to-end visibility and transparency enable CPGs to meet delivery deadlines, exceed customer expectations, improve brand visibility, and reinvigorate consumers’ trust in their abilities.
How Can Atlanta Bonded Warehouse Help?
Atlanta Bonded Warehouse (ABW) is the leading provider of temperature-controlled warehousing and less-than-truckload (LTL) transportation services throughout the Southeast. We specialize in ambient and mid-temperature controlled warehousing. Our 15 facilities offer 6.3 million square feet of racked, high-cube, food-grade warehouse space — suitable for everything from pharmaceuticals to beverages, confectionary, dry grocery, and other consumer packaged goods (CPG).
We offer increased visibility across the supply chain
ABW’s tier-one, digital-based warehouse management system (WMS) enables us to move our customers’ products through their supply chains more efficiently while tracking and tracing expirations dates or best-by dates to comply with food safety and quality requirements.
Our WMS enables real-time inventory handling and management and increased visibility across their supply chain – from the supplier to our warehousing facilities to on-time delivery at the appointed retailer, wholesaler, or distributor.
We have integrated our sister shipping company’s truck management system (TMS) into our WMS for visibility of their orders. Our Logistics Toolbox portal enables customers to see various real-time data. All warehouse “transactions” are available to be viewed. User screens within the Toolbox can be configured specifically for each customer to display the data most valuable to them. Examples include order and shipment status, inventory levels and activity, the status of inbound receipts, and transportation updates.
Why Choose Atlanta Bonded Warehouse?
ABW has invested in warehousing, our customer service team, order management, warehouse management, data translation, and inventory control systems, so you don’t have to. Let ABW help build trust with your critical clients by doing what we know best so you can focus on developing, manufacturing, and selling the quality products your customers have come to expect from you.
Contact ABW via our website or reach out to Hal Justice to learn more about what ABW can offer you: firstname.lastname@example.org / 678-322-3120.