Advantage Solutions today is unveiling the findings from its Advantage Outlook, a quarterly survey that includes responses from senior-level executives at dozens of the leading retailers and consumer products companies across the U.S.
The report, produced by Jill Blanchard, Advantage’s president of enterprise client solutions, in collaboration with Nielsen IQ, offers unique insights into the top consumer and retail industry trends shaping strategy in 2023. With relationships with more than 4,000 consumer goods companies and most of the largest U.S. retailers, Advantage sits at the intersection of brand and retail with extensive reach and a breadth of services that help convert shoppers into buyers.
Results from the survey, conducted in June and July 2023, reveal that product manufacturers are no longer attempting to innovate on lower-price-point products to compete on value. Instead, nearly all manufacturers — 98% — are investing in innovation on mainstream or premium-priced products with a heavy emphasis on health and wellness, and products that offer in- and at-home indulgences.
The Advantage Outlook details a rapidly evolving retail landscape and a challenging operating environment for consumer goods companies and retailers, as persistent inflation and labor shortages continue to affect business operations. While consumer confidence remains high, challenges with in-store labor and other factors are leading to sweeping changes in retail strategy.
Key Takeaways from the Q2 2023 Advantage Outlook
- Product innovation getting a high-end makeover: Despite inflation, manufacturers are investing in premium products with wellness benefits and indulgent appeal. Retailers are eager to accept innovation — 95% say they’ll allow cut-ins outside reset windows.
- Manufacturers push back on costs without raising prices: Only one-third plan to raise list prices. Instead, 96% are focused on disputing retailer fines and fees as their top cost mitigation strategy.
- Labor shortages drive self-checkout: Retailers are turning to automation. Manufacturers cite labor gaps and planogram oversight as leading factors impacting on-shelf availability.
- Increased reliance on promotions: Retailers and brands will rely more on targeted promotions — including holiday events, club-pack sizing, and loyalty programs — to drive unit sales.
“Manufacturers and retailers are looking to do more with less in today’s operating environment while holding fast on price and ensuring product availability,” says Blanchard. “Manufacturers are revamping their offerings with a focus on premium products, and retailers are ready to embrace a wave of innovation to meet evolving consumer demand and convert shoppers into buyers.”
For more insights, download the full 2Q 2023 Advantage Outlook.
