7 Trends and Predictions for Small Manufacturing Businesses in 2019
Small manufacturing has been in top gear throughout the last twelve months, as more and more people decide to live their dreams and start their own craft businesses.
The popularisation of these specialty manufacturers has been part of greater growing trends that are drawing the maker closer to the consumer than ever before.
Consumers are now searching out the products they desire rather than just taking what the retailers are offering them.
The upcoming year promises to be pivotal for these fresh manufacturing brands to harness the personal touch consumers are craving for.
So, all considered, here are 7 trends and predictions for 2019 in the small manufacturing world.
1. Manufacturers Will Cut Out the Middle Man
Before ecommerce platforms like Shopify and WooCommerce and marketplaces like Amazon and Etsy burst on the scene, manufacturers did not have many channels available to reach the end consumer directly. Selling to wholesalers and retail chains was the main route through which sales were made.
With the explosion of these platforms more and more manufacturers have opened their own stores.
For example, 10-15% of Shopify store owners are small manufacturers, who have their own workshop and create their own products. It used to be the case that Shopify was the platform for resellers and dropshipping, so there is a clear trend here to cutting out the middle man and going direct to the consumer.
By avoiding wholesaler fees and retail space costs these small manufacturers can now sell at more competitive prices. Not only that, but they also have bigger budgets to spend on marketing and compete with the mass marketing techniques of retailers.
It’s fast becoming a smarter business decision for small manufacturers to take control of their sales and save on increasingly unnecessary middle man fees.
2. Expect to See a Shift to Multi-channel Sales
Although small manufacturers are using ecommerce as their main sales channel, that does not mean that more traditional methods have been abandoned.
In fact trade fairs and resellers are still high on the list for workshops and small manufacturers. The facts back it up too.
91% of trade show goers say that stalls affect their buying decisions.
The consumer may not buy on the day, but they are likely to make purchasing decisions based on what they see at a trade show.
This is not to take away from Ecommerce platforms and online marketplaces like eBay and Amazon. These are still the mainstays, but businesses are seeing value in combining them with the physical presence offered at tradeshows and boutique sellers.
The personal touch of the trade show coupled with the convenience of ecommerce will prove alluring in 2019.
3. Small Manufacturers Will Become Brand Owners
What’s exacerbating the trend of going direct to consumers is that manufacturers have realized the one-size-fits-all reach of mass retailers is having a toxic effect on their brands. Consumers are drawn more towards personalised, high quality goods with a mark of craftsmanship and environmentally friendly approach to production.
In order to thrive, brands are required to deliver both product and experience that matches the personalised needs of the consumer.
Around 41% of customers switch companies because of poor online personalization and a lack of trust.
Manufacturers have cottoned on to this fact and realised that to stay ahead they need to both support and engage with their customers. This means building brands and offering valuable content to customers.
The exciting thing about this trend is that manufacturers and product owners are building brands with a strong emphasis on the story of the maker. The narrative and aesthetic matter a lot more now to consumers who are searching out what they want, not just taking what is offered to them.
The trend of personalisation is one to take seriously this year.
4. Data-driven Marketing Has Come to Stay
Marketing is now just as much about the service and content you provide as the products themselves. To construct personalised brands, businesses are communicating directly through of social media, email and content marketing.
According to the CMO survey manufacturing was previously in the bottom three sectors for marketing spending, but this year has moved up the rankings. In fact, marketing budgets across the board have increased 7.5% and are expected to do the same in 2019.
And though the growth of these budgets is not accelerating, the channels through which they are being distributed is changing.
Data-driven marketing has come to the forefront, and it can only gain traction as data analysis tools become more advanced.
Email marketing for example has been enhanced with the use of AI technology. The tools on the market can give tailored product recommendations to customers based on data driven insights. This has not yet taken strong foothold and been mostly experimental in 2018, but there have been clear indications of success.
Ads client platform Gumtree managed to raise their email marketing CTR by 44% using AI driven email marketing.
That’s a significant jump and it can only become greater in the coming year as machine learning advances these capabilities even further.
5. Focus on Environmentally Friendly Production to Increase
As manufacturers have increasingly become the face of the product, so too have consumers become more critical of their production processes.
Environmentally-friendly products are immediately preferred in the current climate as consumers have become more conscious of their eco footprint.
There are lots of ways that manufacturers are reducing their waste and using renewable energy to accommodate this trend.
But what is even more important for brands is that this information is included in their marketing. Millennials, who constitute 30% of the market, are especially likely to recommend a brand whose environmental practices they trust.
As the importance of marketing increases, so too are manufacturers more likely to go in an eco-friendly direction to gain customer confidence, whilst also making a positive impact.
Because the fact is, even if millennials are not every manufacturer’s target demographic, this group is leading and directing the foreseeable future of the consumer market.
6. Manufacturers Will Have to Focus on Customer Feedback
“Retail is detail”
This well-known saying in the retail world holds true now more than ever for manufacturers going direct to the consumer.
Details like customer support, live chat and minimizing order fulfilment to get deliveries out on time are having a greater effect than before.
Every positive experience, and conversely every mistake, can have significant ripple effects on businesses. Customer review rates are high as ever and people take them seriously.
Manufacturers have been turning to technology to stay on top of these details. Tools like Freshdesk for live chat are taking over, whilst new MRP systems have come on the market which are specifically tailored for small manufacturers.
In the same way, transferring inventory and production management from Excel to Smart Workshop Software is becoming more commonplace.
This is especially prevalent once businesses go beyond the simplest of processes and the smallest set of stock.
A lot of the value in implementing this software is coming from saving time otherwise spent on manually updating spreadsheets.
Seeing that the importance in focussing on sales and marketing is growing, businesses will be more likely to implement these software solutions in the upcoming year.
7. Real-time Monitoring is Going to Be the Standard
Small manufacturers have been struggling to keep up with the explosion of competition in 2018. In reaction to this, real-time monitoring of inventory and operations are becoming key focus points to stay ahead of the curve.
Cloud-based smart workshop software allows these methods to become convenient and affordable for small manufacturers.
This makes a lot of sense for managers constantly on the move, and ERPs for big business have also picked up this trend for the same reasons.
And with remote work on the rise, next year looks set for dramatic increases in cloud-based monitoring across the board.
The underlying catalyst for change this year will be that customers are consciously looking for products and services with a more personal touch.
They are going out of their way to find brands that speak to them and are no longer satisfied with the faceless breadth of products offered to them by retailers.
This is causing a knock-on effect in marketing, sales channels and even the software that manufacturers are using.
Small manufacturers will be looking to find software that can meet their new needs now that they are delivering and dealing directly with consumers.
The question for in 2019 is, can they find their way into the hearts of customers that are getting more and more particular by the day?