The consumer industry is facing a shift in industry dynamics due to both changes in consumer behavior and external influences from strong forces outside the industry.
In less than 15 years, research indicates that 25% of the western world will have reached retirement age; as a consequence, average income will fall and buying power will be only a fraction of the present level.
With less people willing to pay high prices, business will be forced to try to maintain value together with major cost reduction. On the other hand, small yet lucrative consumer segments – such as health food, environmentally friendly products, personalization and convenience goods – are bound to grow.
To be competitive, business will need to be innovative and agile and ready to offer increasing levels of customization.
Three major trends will affect the entire industry dynamics:
- vertical integration and new business models – manufacturers have already started to sell directly to consumers even if the process needs to be carefully implemented to avoid alienating their distribution and retail partners
- digitization of operations – the digital edge of those companies that will have set new digital and technological standards in consumer interaction will enable them to reach consumers even in the tiniest segments
- cost leadership and consolidation – proactive investors, hedge funds, and private equity firms will rigorously pursue cost leadership in the businesses in which they have invested, pushing them to introduce aggressive pricing policies in order to conquer market shares.
And, last but not least, the consumer goods industry will have to face increased government intervention, supply-chain disruptions and new norms on labor and employment that will exert considerable financial pressure on companies, forcing them to look for new business models in order to shoulder the cost.
De Berti Jacchia Franchini Forlani, with its consolidated experience and knowledge of this industry, has a very good understanding of the business drivers and challenges involved.
Our services include managing real estate portfolios and issues related to the retailing sector, including regulatory aspects, developing IT solutions for digital sales and marketing, advising on related employment issues, executing growth strategies through mergers, acquisitions, joint ventures and other forms of commercial collaboration as well as company reorganizations and competition issues.
Our team also have strong experience in dealing with the legal and commercial issues faced by both multinational and local retailers as well as consumer goods manufacturers and suppliers, including on packaging and labelling.
From luxury brands to fashion stores, to furniture retailers, we have advised on a continuous basis for decades high quality consumer goods and retail companies.
Our team also advises on regulatory matters relating both to retail real estate and to packaging and labelling rules.