The COVID-19 pandemic accelerated a digital and operational transformation across the consumer packaged goods (CPG) and retail industries. From e-commerce growth and supply chain disruption to shifts in consumer behavior and retail technology adoption, the ripple effects of the pandemic are still being felt, and many are here to stay. This article consolidates the key themes that emerged during COVID-19 and how they have reshaped the future of retail and CPG.

The Acceleration of Digital Transformation

The pandemic pushed digital transformation from a “nice-to-have” to a business imperative. With lockdowns and stay-at-home orders in place, consumer reliance on digital tools skyrocketed.

Surge in E-Commerce

In early 2020, U.S. and Canadian web-only retailers saw a 52% spike in orders, while brick-and-mortar stores with e-commerce capabilities saw a 56% increase in online orders. Online grocery sales alone rose by 233% since August 2019, as consumers stocked up on essentials.

Delivery Apps in High Demand

Contactless delivery became the norm. Apps like Instacart, Walmart Grocery, and Shipt experienced daily download surges of 218%, 160%, and 124%, respectively. Even traditional retailers like Target saw app downloads more than double.

Rise of Virtual Events

With industry trade shows canceled, companies pivoted to virtual product sourcing and meetings. Platforms like RangeMe and ECRM Connect allowed buyers and suppliers to connect online through curated campaigns and virtual introductions.

Social Media and Digital Marketing

Consumers spent more time online. Facebook reported a 50% increase in messaging and 70% more time on their apps. Brands that adapted with educational content, influencer marketing, and paid social ads gained new engagement and loyalty.

Supply Chain Disruption and Resilience

COVID-19 exposed vulnerabilities in global supply chains and sparked widespread disruption across logistics and production.

Initial Impact

When Chinese factories shut down in early 2020, global retail operations faltered. Shipping losses reached $2 billion, and by March, 75% of companies were reporting supply chain issues.

In the U.S., retail sales plummeted by 16.4% in April 2020, and hoarding led to artificial shortages of essentials like sanitizers, cleaning products, and pantry staples.

Coping Strategies

  • Direct-to-Consumer (DTC): Companies like PepsiCo launched DTC platforms to bypass bottlenecks.
  • Agility via Visibility: Retailers like H-E-B stayed ahead by engaging in crisis planning and supply mapping as early as January.
  • Pivoting Production: Companies in categories like plant-based meat and delivery tech scaled fast to meet new demand.

The Path Forward

Retailers and brands are embracing:

  • Digitization: Investing in AI, IoT, and blockchain for supply chain visibility.
  • Agile Production: Modular factories that adapt to shifting demand.
  • Strategic Partnerships: Deep supplier collaboration improves forecasting and resiliency.
  • Reshoring: Bringing production closer to home, despite higher costs.

Category-Specific Trends

Toys & Games Became Essential

Stuck at home, families turned to puzzles, board games, crafts, and outdoor toys. Games and puzzles grew 32% year-over-year. Parents sought distraction tools for kids, and retailers responded by refreshing assortments more frequently through platforms like ECRM Connect.

The Pet Boom

Pet adoptions soared, and so did sales of pet products, reaching over $100 billion in 2020. Trends included:

  • Supplements: 70% of the $1.5B pet supplement market came from e-commerce
  • Premium Food: Growth in custom meals and toppers
  • Sustainability: Increasing demand for eco-conscious and certified pet goods

Consumer Tech: From Optional to Essential

Working, learning, and entertaining at home created demand for:

  • Home Office Gear: Webcams, ring lights, routers, mics
  • Wellness Tech: UV sanitizers, fitness trackers, air purifiers
  • Entertainment: Gaming accessories, social media tools, LED lights

Retailers expanded SKUs through “endless aisles” and PDQ displays, while higher-end travel gadgets declined.

Key Lessons for the Industry

  • Digital First: Brands and retailers must prioritize digital tools, from supply chain systems to e-commerce and social media.
  • Supply Chain Agility: Visibility, data-sharing, and redundancy planning are essential for future crises.
  • Customer-Centric Innovation: Consumer expectations have shifted; categories once viewed as “nonessential” (toys, pet products, home tech) are now core to well-being and daily life.
  • Blended Experiences: Virtual events, digital discovery platforms, and hybrid fulfillment models are shaping long-term strategy.

Final Thought

COVID-19 didn’t just disrupt the CPG and retail sectors—it redefined them. The changes triggered by the pandemic, both behavioral and operational, are unlikely to revert. Businesses that embrace digital transformation, flexible operations, and evolving consumer preferences will be best positioned to lead in the new normal.

Sources

How COVID-19 Changed Retail

If you’re a retail buyer on RangeMe, check out these product searches that match the trends mentioned above:

Learn more about RangeMe here.

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