Table of Contents
- What Are Consumer Goods?
- Types of Consumer Goods
- Product Recall
- Marketing Consumer Goods
- What Are Fast-Moving Consumer Goods?
- What Is the Consumer Goods Sector?
- What Is the Difference Between Capital Goods and Consumer Goods?
- Which Companies Rank As Most Trusted for Consumer Goods in the U.S.?
- How Has E-Commerce Affected Demand for Consumer Goods?
- The Bottom Line
What Are Consumer Goods?
Let me explain consumer goods to you directly: these are finished products that you, as an individual buyer, purchase for your own use. I call them final goods or retail goods because they're the end result of all that production and manufacturing. Think about clothing, food products, and appliances—they're all classic examples of consumer goods.
You should know that consumer goods are broadly categorized as durable, non-durable, and service goods. Non-durable goods cover essentials like food and clothing.
Key Takeaways
- Consumer goods, or final goods, are goods sold to consumers for their use or enjoyment.
- Consumer goods are classified as durable, nondurable, or service goods.
- Consumer goods are further categorized based on consumer behavior and are marketed by the type of good, such as a convenience product or a specialty item.
Types of Consumer Goods
Consumer goods include nearly all retail products you see sold out there. They're manufactured specifically to be sold to you, the final consumer. They fall into several broad categories that I'll outline for you.
Durable goods are those consumer goods with a life span of more than three years, and you use them repeatedly over time. Bicycles and refrigerators are straightforward examples of durable goods.
Consumer staples such as food, beverages, personal hygiene products, and clothing are frequently bought consumer goods.
Nondurable goods are consumed in less than three years and are commonly used only once. They include products like packaged food and drinks and laundry detergent.
Service goods aren't tangible products at all. They include purchases like auto repairs and haircuts.
Product Recall
A product recall is when there's a request to return, exchange, or replace a product after a manufacturer or consumer watch group discovers defects that could affect how the product performs or even harm consumers like you.
Marketing Consumer Goods
The way you, as a consumer, view and use a product directly determines how companies market their goods to you.
Convenience goods are those that you consume regularly and can readily find for purchase. They're often nondurable and low-priced items. Examples include candy bars and tobacco products.
Shopping goods are ones you buy less frequently. They're more durable and usually more expensive than convenience goods. Furniture and televisions fit this category.
Specialty consumer goods are relatively rare and often seen as luxury purchases. They're usually marketed by brand and aimed at a niche market of affluent consumers like sports cars and fine art.
Unsought consumer goods are necessities that you rarely seek out without an immediate need or some push from an advertisement or sales pitch. Life insurance and pre-paid funeral expenses are examples.
What Are Fast-Moving Consumer Goods?
Fast-moving consumer goods are nondurable products like food and drinks that move rapidly through the supply chain from producers to distributors and retailers to you, the consumer.
For you as a consumer, they represent convenience. For retailers, they offer high shelf-space turnover opportunities.
What Is the Consumer Goods Sector?
The consumer goods sector consists of all the companies that produce or import final products ready for you to buy and use, from toilet paper to televisions.
If you're an investor, you can participate in the consumer goods sector through mutual funds or exchange-traded funds that focus on producers of consumer goods.
One of the largest consumer goods ETFs is the iShares U.S. Consumer Staples ETF (IYK), with 55 stock holdings and $1.3 billion in net assets under management (AUM) as of October 2024. The fund's top holdings are Procter & Gamble, PepsiCo, Coca-Cola, Philip Morris, and Mondelez International.
What Is the Difference Between Capital Goods and Consumer Goods?
Capital goods are physical assets that a company uses to manufacture products and services that you, as a consumer, will later use. Buildings, machinery, equipment, vehicles, and tools are all capital goods.
Consumer goods, on the other hand, are purchased and used by you at the retail level. As such, they have no future productive use.
Which Companies Rank As Most Trusted for Consumer Goods in the U.S.?
Nestlé, PepsiCo, LVMH Moët Hennessy Louis Vuitton, and Proctor & Gamble were the top four ranked companies in 2023 for consumer goods in a survey conducted by Consumer Goods Technology and Ensemble IQ.
How Has E-Commerce Affected Demand for Consumer Goods?
According to the U.S. Census Bureau, Americans spent $289.2 billion on retail e-commerce during the first quarter of 2024. This was an increase of 2.1% from the second quarter of 2023 and made up 14.9% of total retail sales.
While manufacturing and wholesale sales still make up a larger percentage of e-commerce sales, retail sales of consumer goods are a growing portion of e-commerce.
The Bottom Line
A consumer good, or final good, is a finished product ready for you to purchase from a retailer.
Consumer goods can be classified as durable, non-durable, or services. Marketing of consumer goods depends upon the use, price, and features of the item.
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