CP Manufacturers Rank Consumer Centricity as Key Success Factor
February 23, 2009 - IDC Global Retail Insights recently measured how retailers and consumer products (CP) manufacturers use consumer-centric data and analysis to drive their businesses. The survey, titled "Being Consumer-Centric: A Retailer and Manufacturer Update," defines consumer centricity as any strategy for which an organization uses shopper data to develop insight as a driver for decision-making. Results reveal that both parties are realizing benefits from the concept, but more opportunities are within their reach.
Key findings include:
> Most CP manufacturers (58 percent) and retailers (75 percent) rank consumer centricity as a top 3 success factor.
> 67 percent of manufacturers and 80 percent of retailers expect an increased focus on consumer centricity in 2009.
> Manufacturers need to work on leveraging consumer insights across the organization with only 43 percent indicating their ability is better than satisfactory, compared to 64 percent of retailers.
> The limited availability of team resources is the largest impediment to consumer-centric success for both manufacturers (43 percent) and retailers (37 percent).
> Lack of support and executive sponsorship is no longer a significant barrier for retailers (16 percent) with more than 75 percent retailers appointing a senior consumer-centricity role.
> Manufacturer high performers clearly use consumer insights more frequently for demand planning/forecasting (80 percent) compared to the norm (49 percent).
"Overall, the research shows that while both retailers and manufacturers have taken steps to incorporate consumer centricity into their strategic and tactical activities, there are still many untapped opportunities. By dedicating the appropriate people and technical resources, retailers and manufacturers will create points of differentiation in their product offering that will retain existing consumers and attract new ones," says Leslie Hand, research director, IDC Global Retail Insights.
Survey Methodology:
The sample consisted of 120 respondents, including 55 retailers and 65 consumer products manufacturers. Respondent roles were director level and above. The survey was conducted through online and telephone interviews. Top performers in each group were defined as those having annual same store sales growth of at least 7 percent (for retailers) and those within the top ten in the survey based on percent annual revenue growth (for consumer products and pharmaceuticals). Outliers were discarded to maintain data integrity. Data is accurate within 90 percent confidence level and 10 percent confidence interval.
Key findings include:
> Most CP manufacturers (58 percent) and retailers (75 percent) rank consumer centricity as a top 3 success factor.
> 67 percent of manufacturers and 80 percent of retailers expect an increased focus on consumer centricity in 2009.
> Manufacturers need to work on leveraging consumer insights across the organization with only 43 percent indicating their ability is better than satisfactory, compared to 64 percent of retailers.
> The limited availability of team resources is the largest impediment to consumer-centric success for both manufacturers (43 percent) and retailers (37 percent).
> Lack of support and executive sponsorship is no longer a significant barrier for retailers (16 percent) with more than 75 percent retailers appointing a senior consumer-centricity role.
> Manufacturer high performers clearly use consumer insights more frequently for demand planning/forecasting (80 percent) compared to the norm (49 percent).
"Overall, the research shows that while both retailers and manufacturers have taken steps to incorporate consumer centricity into their strategic and tactical activities, there are still many untapped opportunities. By dedicating the appropriate people and technical resources, retailers and manufacturers will create points of differentiation in their product offering that will retain existing consumers and attract new ones," says Leslie Hand, research director, IDC Global Retail Insights.
Survey Methodology:
The sample consisted of 120 respondents, including 55 retailers and 65 consumer products manufacturers. Respondent roles were director level and above. The survey was conducted through online and telephone interviews. Top performers in each group were defined as those having annual same store sales growth of at least 7 percent (for retailers) and those within the top ten in the survey based on percent annual revenue growth (for consumer products and pharmaceuticals). Outliers were discarded to maintain data integrity. Data is accurate within 90 percent confidence level and 10 percent confidence interval.