The top CPG retail trends revolve around keeping up with the rapid speed of change brought on by consumer shifts and digital disruption.

FREMONT, CA: For years, CPG as a retail segment and retail have experienced significant, constant, disruptive change. Due to social media, e-commerce, and Amazon Prime, consumer preferences and perceptions have changed dramatically over the last decade.

In an age of online shopping, omnichannel, and direct-to-consumer brands, brick-and-mortar retailers have struggled to adapt. Consumers of all ages are increasing their demands for eco-friendly products when awareness related to climate change is growing.

In 2021, these developments will continue to be disruptive factors for CPG firms. These are some of the most critical CPG retail trends to watch in the coming year.

Brands must work harder to win the digital shelf

Even in typically slow-growth parts of CPG, e-commerce exploded in 2020. According to eMarketer, e-commerce revenues will increase by almost 36 percent in 2019 as social distancing continues to drive cautious holiday shoppers away from physical stores.

The good news is that CPG brands are reaching new markets online, and when demand is strong, customers are more likely to try something new. If CPG businesses want to stand out on an increasingly competitive digital shelf, they'll have to improve their game in personalization and promotions drastically.

CPG retail brands zero in on sustainability 

Consumers today, especially millennials and Generation Z, are demanding that brands pay attention to sustainability. It requires minimizing the use of plastic packaging, enhancing product labeling to emphasize recycling, creating biodegradable alternatives, and ensuring that water is used sustainably.

Most of the global respondents agree that businesses can contribute to environmental development. Nearly half of customers claim they will change their consumption patterns to reduce their impact on the environment.

Tackling the delivery dilemma

With the emergence of delivery options driven by COVID-19, such as at-home, BOPIS, and curbside delivery, CPG businesses must digitally adapt to take advantage of the "new standard," which will begin 2021 and likely last for years.

As per a Deloitte study conducted early in the pandemic, more than half of the consumers reported spending more on convenience to get what they want, as described by contactless shopping, on-demand fulfillment, delivery app use, and BOPIS adoption. The convenience expectation is unlikely to go away anytime soon.