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International Data Corporation estimates that one-third of the top 20 market share leaders in most industries will be “significantly disrupted” by new and reinvented competitors by 2018.

That may be concerning news for long-established consumer products companies, but it's also not surprising. We've seen significant disruption and change in the industry in recent years as consumers have become increasingly connected, and as traditional and non-traditional companies have sought to capitalize on that connectivity in new ways.

With this in mind, here are my three predictions for the CP industry in 2016:


1. Consumers will expect personalization.

Consumers are constantly exploring different digital avenues and turning new digital corners for nearly every aspect of their lives, from improving their cooking and parenting skills to pursuing their hobbies to managing their daily routines. They want to be inspired, guided, educated and helped, and in 2016 more than ever they will expect CP companies to be there to help them in their moments of need.


We’ve stressed the importance of meeting consumers directly in their moments of need, and others have also been building on this concept. For instance, Google released some interesting findings from its own research earlier this year about what it calls “micro-moments.” These are the countless and oftentimes unpredictable moments we experience every day when we act on a desire to learn, do, watch or buy something.


“The powerful computers we carry in our pockets have trained us to expect brands to deliver exactly what we are looking for – the moment we are looking,” said Sridhar Ramaswamy, Google’s senior vice president of ads and commerce, in a blog post for the Wall Street Journal. “We want things right, and we want things right away. In fact, 69 percent of online consumers agree that the quality, timing, or relevance of a company’s message influence their perception of a brand.”


CP companies that want to be relevant in these micro-moments must fundamentally shift how they engage with today’s consumers. They must help ensure consumers get what they want, when and where they want it. It’s less about consumer products than it’s about consumer outcomes.


2. The nature of competition will continue to evolve.

CP companies have been springing up in recent years from places we never would have imagined a decade ago.


I mentioned earlier this month the example of Mink, the start-up cosmetics company that doesn’t actually produce any cosmetics but rather gives consumers the ability to create their own using 3D-printing technology. You likely won’t see Mink in the beauty aisles anytime soon, and yet the company represents a real form of competition to the industry giants that have long dominated those aisles.


Meanwhile, online subscription-based companies continue to capture market share by delivering everything from men’s razors to women’s clothes to pet supplies straight to consumers’ homes. And as discussed last week, several brands are using a new service from Amazon that automatically reorders specific household items when a connected device identifies that it’s running low.


These non-traditional companies and services can appeal to consumers for a wide range of reasons, including greater convenience and affordability. One thing they all have in common, however, is they each identified a demand among consumers and found a way to meet it in the digital economy – such as the allure of having a personal stylist who understands your tastes and every month delivers fashion you like.


Competition will only continue to grow from non-traditional areas in 2016 so long as the opportunity is there and nobody else – including traditional CP companies – makes the move to seize it. And that brings us to my last prediction.


3. Those that don’t make the leap to the digital economy will be replaced by those that do.

The CP industry’s median profitability has been trending downward for the last 30 years. Meanwhile, revenues for the top 100 CP brands have fallen nearly 1 percent in the last year even as overall dollar sales for all companies is up 6 percent.


The challenge today is less about filling carts than it is filling hearts. It’s about providing a completely different consumer experience, where commerce is seamless, technology is invisible, and brand interactions are personal, relevant and simple.


For this to happen, CP companies must reimagine themselves if not reinvent themselves as technology companies. They must be able to deliver smarter products and services that refocus commerce on business outcomes, blur industry lines, and integrate physical and virtual networks into one seamless end-to-end value network.


CP companies that embrace this change will fare much better in making 2016 a year for the record books instead of a year for the history books.  Learn more about Digital Transformation for Consumer Products at Consumer Products. Reimagined for the new economy.