Are Consumer Goods Leaders Ready for What’s Next?
Consumer goods leaders are used to hearing that industry change is a constant. But that doesn’t make it any less true.
And, according to Accenture’s 2019 Technology Vision report, 92% of industry executives think innovation is happening faster than it was three years ago. And times are set to get even more turbulent for consumer goods brands.
In fact, we’re on the cusp of a new era in brand-consumer relationships. Digital has become so entrenched in consumer expectations that it no longer offers a competitive advantage — it’s just part of the baseline every brand is expected to meet. In this technology-dominated, “post-digital” world, consumers can communicate their individual needs instantly, and they expect gratification immediately.
This raises the innovation stakes considerably. Innovation has always been important in this industry, of course. But in the post-digital world, it’s essential.
What’s more, the nature of innovation has changed. Whereas it once meant creating an R&D arm or acquiring an up-and-coming brand, it now requires companies to go further. That means innovating the whole business model to develop the exceptional levels of responsiveness needed to meet individual consumer needs at any specific moment in time.
Capabilities such as hyper-personalization and on-demand fulfillment thus become just as important as developing products for mass retail. Notably, a large majority of consumer goods leaders (87%) agree that these two factors will be the drivers of future competitive advantage.
A brand new world
Evidence of this changing innovation is all around us. Consider how Beam Dental has created a smart toothbrush that tracks usage to help users improve their brushing technique. The resulting personalized data can also trigger lower premiums in the company’s dental plans.
Also consider PepsiCo’s development of an artificial intelligence-enabled trend predictor engine to analyze online conversations and guide the company’s future product, ingredient, and brand innovation. In fact, PepsiCo now uses machine learning for a whole range of purposes across its business — everything from streamlining recruitment to optimizing potato peeling.
Coca-Cola’s marketers, meanwhile, are using big data analytics from a staggeringly high number of data points all around the world (right down to individual vending machines) to influence and enhance their brand and marketing decisions.
Preparing for the next wave
The thread that ties all these developments together? The companies pursuing them understand the changing nature of innovation in their industry.
First, they recognize the access they now have to a wealth of technologies that let employees do entirely new things, with AI and big data analytics in particular now at the forefront of the “human-plus” workplace revolution.
As a result, many are rethinking their talent acquisition and upskilling strategies, refocusing on digital skills while establishing new workforce models that integrate employee expertise with on-demand external resources and intelligent digital technologies.
These innovators also understand a fundamental truth about modern consumer goods and services: that competitive advantage increasingly lies in capturing the fleeting “momentary markets of one.” These are the highly specific, individual consumer opportunities that arise in a moment — and disappear just as quickly.
The only way to capture those momentary markets is to develop extremely well-attuned sense-detecting mechanisms that enable a brand to identify consumer need before the competition —and sometimes before consumers themselves.
Shining a light on future success
Technology experimentation is critical to this, and brands should be exploring every possible tool in the digital toolbox, including new and upcoming options.
Specifically, that means understanding how distributed ledgers, AI, extended reality and quantum computing (the so-called “DARQ” technologies) are going to fundamentally change what consumer brands do, and how they do it. The good news is that almost nine in 10 industry executives say they’re already experimenting with at least one of these technologies.
It’s also essential to rethink enterprise security for a world in which ecosystems of partner organizations are increasingly critical. Ecosystems enable consumer goods companies to innovate far more effectively than they can by themselves. But the extent of data sharing this relies on means companies must double down on data security — not just for their own organizations but also for the whole ecosystem.
As we race headlong into the post-digital era, hyper-personalized and instantaneous digital experiences will increasingly determine competitive advantage for consumer goods brands to deliver relevance at scale. That’s why forward-looking companies are rethinking innovation in the workplace, in business models, and in ecosystem partnerships. They’re using it as a lever to push their brands to new heights of in-the-moment consumer relevance.
About the Author
Laura Gurski is senior managing director, global lead of the Consumer Goods & Servicespractice at Accenture.