9 Trends and Predictions for Modern Manufacturers in 2020
Manufacturing has been in top gear throughout the past year, 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 a greater growing trend that is 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.
And 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 9 trends and predictions for 2020 in the manufacturing world.
1. D2C Manufacturing Will Become More Popular
Traditionally, manufacturers were at the mercy of selling via wholesalers and retail chains, as it was extremely difficult to reach the end consumer directly if you went independently.
But, with the emergence of e-commerce platforms like Shopify, WooCommerce, and marketplaces like Amazon and Etsy, entrepreneurs have opened their own stores and thus began D2C manufacturing.
A business model that is only expected to grow as starting an e-commerce store becomes more accessible and streamlined.
For example, as it stands, 10-15% of Shopify store owners are manufacturers, who have their own factories and create their own products.
It used to be the case that Shopify was the platform for resellers and dropshipping, so with more D2C manufacturers appearing on the platform would indicate entrepreneurs are steadily cutting out the middleman.
By becoming a D2C manufacturer, you can avoid wholesaler fees and retail space costs and sell your products at competitive prices, allowing you to have more control and responsibility for your business.
Finally, you’ll oversee your own marketing, which might sound daunting. However, if a retailer stocks your product, they’re not obligated to sell your product. So yes, you’ll need to figure out a marketing campaign, but at least you can actively increase interest in your product.
PRO TIP: As mentioned above, one of the most popular e-commerce platforms is Shopify, that’s why it’s important to know how it works, and how you can get it to work for you.
Be sure to check out our free and ultimate guide for manufacturers selling on Shopify to get the most out of your online store.
2. Expect to See a Shift to Multi-channel Sales
Although scaling manufacturers are using e-commerce as their main sales channel, that does not mean that the more traditional methods of selling have been completely abandoned yet.
In fact, trade fairs and resellers as a sales channel are still high on the list for 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 e-commerce 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 e-commerce will prove alluring in 2020.
3. Manufacturers Will Become Direct to Consumer Brands
Designer Stella Soomlais is one of the many manufacturers that are skipping the middleman and going direct to consumers with great success.
What’s exacerbating this trend of becoming a direct to consumer brand 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 personalized, high-quality goods with a mark of craftsmanship and an environmentally friendly approach to production.
In order to thrive, brands are required to deliver both product and experience that matches the personalized 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 realized 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 personalization is one to take seriously in 2020 (and long afterward).
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 personalized brands, businesses are communicating directly through 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 by 7.5% and are expected to do the same in 2020.
And though the growth of these budgets is not accelerating, the channels through which they are being distributed are 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.
Ads client platform Gumtree managed to raise its 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. Personalized Marketing
As consumers, we’re all fed up with having to deal with those generic ads we see every day.
Who are we kidding, at this point, it’s second nature to tune these ads out? Which, as business owners, is a huge issue.
That’s why, as traditional marketing starts to fail, we're going to see a transition to personalized messaging in 2020.
In a survey of 1,000 people, 90% of them said that they found personalization appealing with 80% admitting they’d be more likely to purchase with a company that offered them a personalized experience.
So, that’s why it’s important to get yourself set up with tools that can help you with email outreach, which allows you to identify your target market, get information to personalize your email, send mass automated and personalized follow-ups, and convert visitors to your store into sales.
6. Increased Focus on Green Manufacturing
Radis is one of many companies focussing on creating environmentally friendly products that avoid waste creation.
With forecasts on the planet's climate in the future looking bleak, more and more consumers are quickly turning down the opportunity to buy cheap products, for products with the lowest possible carbon footprint.
As customers increasingly become more conscious of their impact on the environment, demand is very quickly building for more companies to turn to green manufacturing.
It might sound daunting, or maybe you consider the change to be too ambitious. However, going green could be as simple as introducing lean inventory techniques into your business.
But, regardless of how you tackle this challenge, brands need to include that they're eco-friendly in their marketing to reap the benefits. 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 green to gain a customer’s 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.
7. 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 D2C.
Details like customer support, live chat, and increasing order fulfillment 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 as 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 softwares have entered the market, which is specifically tailored for manufacturers.
In the same way, transferring inventory and production management from inefficient Excel spreadsheets to Smart Manufacturing 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 of focusing on sales and marketing is growing, businesses will be more likely to implement these software solutions in the upcoming year.
8. Virtual and Augmented Reality
Over the last few years, virtual reality (VR) and augmented reality (AR) have come leaps and bounds. But now, this technology is so developed and accessible you can be sure to see these being implemented by, not just manufacturers, but all different types of businesses.
Not only will you see this technology popping up everywhere, but a lot of businesses – private and public – have already implemented it into their sales strategy.
For those who’re not sure, VR is a simulated experience, which can be different from the real-world. While AR, is where real-world environments are enhanced by computer-generated perceptual information.
For example, the super-giant ready-to-assemble manufacturer IKEA has an app you can download that allows you to use your phone or tablet to see what a piece of furniture could potentially look like in your home before making a purchase.
AR, which is becoming more popular than VR, is soon to become a major component to converting leads into sales very soon.
9. Automation Will Be the Standard
Scaling manufacturers without the proper tools in place to support their growth are destined to struggle, and even worse close due to not being able to keep up with orders.
This is why automated real-time monitoring of your inventory and operations is going to be essential to stay afloat with your business.
You wouldn’t be the only one since 52 percent of all manufacturers are already relying on real-time monitoring to improve scheduling accuracy, while 48% report better perpetual inventory control with this approach.
Automated cloud-based solutions such as Smart Manufacturing Software allow these methods to become convenient and affordable for manufacturers.
This makes a lot of sense for managers constantly on the move, and ERPs for big businesses 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 consumers 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 by retailers.
This is causing a knock-on effect in marketing, sales channels and even the software that manufacturers are using.
Modern 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 2020 is, can they find their way into the hearts of the consumers who are getting more and more meticulous by the day?