Consumer Goods

Portrait of Stephan Lechel

Purchasing behavior and customer expectations in the consumer goods market are changing more rapidly than in almost any other industry. Turning new opportunities into competitive advantages is a challenge – but also fun.

Stephan Lechel

Stephan Lechel

Partner

When the power of the customer becomes ever greater

What consumer goods will be bought in the future – and how, or where? The answer points to digital platforms, sustainable manufacturing processes and transparent value chains. One thing is certain: companies must adapt to fundamentally changing markets.

Current situation in the industry

01

Seize digital opportunities

From brand positioning to sales channels and customer behavior – in the digitalized consumer goods market, nothing is as it used to be. Taking customer behavior as an example, even in traditional market segments such as furniture retailing, the online share are increasing rapidly. On the one hand, stationary sales are cannibalized; on the other hand, manufacturers are unlocking opportunities in direct sales. Customer expectations are shifting: as online platforms score in the fields of flexibility and availability, consumers are demanding the same from brick-and-mortar retailers. On the other hand, digitization is changing the production process of consumer goods. The ideal picture envisions seamlessly interlocking processes that anticipate every changing trend based on data, interlocked with "self-learning" production. In the end, only those who make intelligent use of their own data will be able to organize their operating business efficiently and develop products that meet the (new) demand.

The challenges are very diverse: On the one hand, you have to give your own brands recognition value, and on the other hand, you have to establish new digital sales channels and business models. We know the situation in the consumer goods market very well and create holistic strategies for our customers.

Stephan Lechel

Stephan Lechel

Partner
02

Embrace social change

Increasingly short-lived trends and the desire for individualized products are shaping the consumer goods market in the 21st century. In addition, cost pressure is increasing in the industry – at the same time, investment pressure is higher than ever. As a result, new business models are emerging, such as digitally driven delivery services with efficient and adaptive value chains. The sustainability megatrend poses new challenges for producers of consumer goods. Increased transparency towards end customers, not only in terms of sustainability, but also unprecedented price transparency, is changing the power structure of manufacturers towards end customers. Consequently, companies should establish a transparent value chain and provide authentic information about it. Current trends such as organic materials and investments in sustainable production are often at odds with the traditionally volume-driven business.

The relationship between customers, platform providers and producers has shifted. Increased product differentiation and rising competitive pressure coupled with increased transparency in the supply chain is causing margins to shrink and increasing the pressure to innovate. This challenging starting position should be kept in mind. We help with this stocktaking and at the same time support the planning and implementation of the necessary transformation processes.

Dorothée Fritsch

Dorothée Fritsch

Head of Business Development & Strategy
03

Keep an eye on regulations and supply chains

The introduction of the Supply Chain Act in Germany, the “Lieferkettengesetz” (starting 2023) is forcing companies in the consumer goods market to take action: They must identify and minimize human rights violations and environmental damage in their supply chain at an early stage, which entails increased risk analyses, risk management, complaints procedures and documentation. Due diligence extends along the entire value chain, including indirect suppliers. Companies must establish relevant processes, as violations lead to heavy penalties. Since 2023, the law has applied to companies with more than 3,000 employees, and from 2024 it will be extended to smaller companies with fewer than 1,000 employees. It is therefore essential to deal with the requirements early on and to establish relevant processes. Ultimately, it is now important to establish a good balance between regionalisation and process efficiency.

Against a backdrop of logistical bottlenecks, increased raw material and transport costs, and new regulatory challenges, it is becoming more difficult to ensure the availability of goods in a cost-efficient manner and to avoid loss of sales. We provide targeted support in establishing a resilient and integrated supply chain.

Dominik Weiß

Dominik Weiß

Managing Director

Success stories

Challenges & Solutions

A look at the details – how we support our clients

Expert Interview

What distinguishes the consumer goods industry of the 21st century, Stephan Lechel?

What challenges lie ahead for companies in the consumer goods sector?

First of all, it is important to emphasize that we are talking about very different companies here. We support both larger medium-sized companies and multinationals, with products ranging from the "Food", "Non-Food", "Home Care", "Personal Care" sectors and several more. In addition, there are differences in brand positioning and customer perception. We provide highly differentiated advice on developing a new strategy – for example, to attract new target groups, to drive the globalization of the brand and to adapt the product portfolio to changing consumer behavior.

What role does digitization play in this context?

It has great significance for consumer goods companies. On the one hand, this involves optimizing internal value chains and the nature of collaboration. New process worlds from logistics and production to marketing are coming to companies. The target is an agile organization that can react very quickly to new challenges in very volatile markets. On the other hand, digitization is changing the way consumers find out about a product and subsequently buy it in many places. This sometimes leads to a new division of labor between the consumer goods industry and retail. We help companies position themselves in e-commerce, e.g. in the placement of products or the optimization of accessibility across channels. Overall, it is safe to say that the complexity of the entire value chain is increasing.

How do you assess the market position of consumer goods manufacturers?

Many companies in the consumer goods sector are well positioned. However, the industry is strongly driven by the requirements of end customers, which are changing rapidly. And it is important to remember that most consumer goods suppliers operate their own production facilities. In this respect, we monitor market shifts very closely. Incidentally, the digitization of our everyday lives is creating new market players such as lifestyle platforms with a large, highly target-group-specific home care offering. Strong brands are now forming here that can put traditional companies under pressure with their business models. And: If you want to imitate something like this, you have to make sure that you reach the right target group online. Our strength is to provide a holistic response to this.

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