4 trends to watch in consumer goods

There’s no doubt about it: technology has revolutionized how we do business. But the same technologies that allow consumer goods brands to reach customers worldwide have created an environment in which change happens fast and continually, competition is fiercer than ever before, and even incremental adjustments in strategy can significantly impact a company’s profitability and growth. At the same time, the past two years’ events have laid bare how companies of all sizes are vulnerable to global, social, political, and economic disruptions. With so much change it can be difficult to understand what trends are worth the investment, which is why we’ve taken a data-driven approach to cut through the noise. Four key trends are highlighted below and a more in-depth look can be read in the Consumer Goods Trends in 2022 report by Microsoft Dynamics 365 Commerce.

1. Social commerce makes every online touchpoint a potential storefront

Social media has revolutionized how people connect and is now transforming the way consumers discover and engage with brands. One clear example is social commerce, which is an integrated and seamless strategy for allowing customers to discover, browse, share, and purchase without ever leaving a social media platform. Now brands are opening significant new revenue streams by delivering seamless purchasing experiences to consumers on the social media platform of their choice. The results are staggering, with the value of social commerce sales worldwide in 2021 hitting an estimated $732 billion and projected to grow to $2.9 trillion by 2026.1

chart, waterfall chart

Unsurprisingly, social commerce, or live commerce according Gartner® Hype Cycle™  for Retail Technologies, 2021, “can increase brand awareness and generate a large amount of traffic in a short time.”2 One country that is leading the live commerce trend is China.

Dynamics 365 Commerce can help organizations consistently deliver great customer experiences on any social channel or front-end application. This is because Dynamics 365 Commerce can utilize both headless and other modern commerce architectures to seamlessly connect enterprise systems, such as payment processing, content management, and omnichannel inventory.

2. Digital shelf analytics improve online merchandising

In 2021, US merchants recorded a record $870.8 billion in online sales, an increase of 14.2 percent compared to the year prior.3 As online sales continue to increase in volume and importance, brands will need to collect, measure, and monitor product and sales data from a growing variety of sources. One way brands can stay on top of this information is by using digital shelf analytics (DSA) to improve online merchandising.

DSA applications give retailers the ability to monitor data and metrics from all their digital sales channels, including retail digital commerce sites and online marketplaces. DSA solutions may often provide product data from social sites and collect competitive pricing data. These applications use API connections and automated website scraping to ingest data on metrics such as ratings and reviews, product availability and placement, search rankings, and product information content quality, alerting users to updated content.

Another technology related to DSA is the Smart Shelf. According to Gartner, “Smart shelf refers to the connected shelf in a physical retail store, which can include computer vision, weight or other sensors, electronic shelf labels (ESL) or LCD displays.” Gartner classifies the technology as “emerging” with a “high” benefit rating,2 which we believe makes it a technology to watch in the near future.

Dynamics 365 Commerce offers retailers robust DSA capabilities, including a unified view of content, assets, promotions, inventory, and pricing across physical and digital channels.

3. Immersive commerce helps retailers combat the rising cost of returns

One technology trend helping companies improve how they interact with consumers is immersive commerce (IC). IC reinvents customer experiences by integrating physical and virtual worlds via augmented reality (AR), virtual reality (VR), and mixed reality. With IC, brands can give customers a new way of visualizing a product in their space, such as seeing the way a Microsoft Surface Laptop looks on a desk in a home office or how different shades of makeup look before ordering online. Experts believe that AR-enabled shopping will soon become a must-have for furniture retailers. Home Depot, Wayfair, Target, Overstock, and Houzz have already adopted the technology.4 Significantly though, IC goes beyond improving and augmenting the customer experience. It also presents opportunities to solve costly inefficiencies, the most obvious and expensive being returns.

The growth in e-commerce and virtual shopping that accompanied the pandemic led to a corresponding increase in returns. In 2020, total return losses, including the value of lost sales, reached $428 billion, with an estimated $101 billion purely from returns.5 The loss from returns is expected to increase in the next several years, eventually reaching $1 trillion annually. According to Gartner, “Size and ‘best fit’ recommendations using AR can drastically reduce return rates and improve conversion.”2 We agree and believe that in the face of growing losses from returns, brands will likely increase their investments in AR because of its ability to help consumers avoid returns altogether. For example, by allowing customers to see how furniture will look in their house or how clothes will look in a virtual fitting room, they are more likely to purchase the product they need and will enjoy.

a person holding a camera

Add AR, VR, and mixed reality capabilities to your digital storefronts using apps available in Microsoft AppSource, like Web AR with D365 Commerce from Hexaware Technologies.

4. Supply chain resilience is more crucial than ever

The events of 2020 unleashed a series of disruptions to global supply chains, such as border closures, stay-at-home orders, severely depressed demand in industries like travel and in-person services, and demand booms in others, such as healthcare equipment and operating supplies. The cost of these disruptions is significant: in a study conducted by Deloitte, 32 percent of chief financial officers (CFOs) said that shortages and delays were responsible for depressed sales, and 44 percent said that their costs have increased by 5 percent or more this year as a result.6

For retailers and consumer packaged goods (CPG) brands, a primary beneficiary of supply chain resilience is the consumer, who will switch retailers if an item is out of stock and expects to be able to order from any channel with fast and convenient delivery to anywhere. This means that retailers need technology solutions that enable omnichannel retail and fulfillment while also ensuring inventory availability.

Delivery person handing a package to a satisfied customer at the customer’s doorstep. Keywords: Dynamics 365; purchase; online ordering; ecommerce; delivering a box; Surface tablet; at home; receiving an order; driver; man; woman

Interested in learning more about live commerce or digital shelf analytics? Need to cut through market hype to prioritize your retail technology investments? Download Gartner Hype Cycle for Retail Technologies, 2021.

What’s next?

These are just a few trends that you can find inside our report on Consumer Goods Trends in 2022. In the full report, you’ll find relevant and impactful insights drawn from extensive research curated by industry professionals, subject matter experts, and thought leaders. Download your copy of the Consumer Goods Trends in 2022 report. And, be sure to register for the corresponding webinar on Top Retail Trends which you can attend live on Wednesday, May 4, 2022, 11:00 AM to 12:00 PM Pacific Time or watch afterward on-demand.


1- Statista, 2021, Value of social commerce sales worldwide from 2020 to 2026

2- Gartner, 2021. Hype Cycle for Retail Technologies, 2021

3- U.S. Department of Commerce, 2022. Quarterly Retail E-commerce Sales

4- Postindustria, 2021. Top 10 AR Furniture Shopping Apps that Change the Future of Business

5- National Retail Federation, 2021. $428 billion merchandise returned in 2020

6- Deloitte, 2021. CFO Signals™: 3Q 2021

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