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05/29/2013

The Future Consumer

If there’s one thing that consumer goods (CG) companies can bet on, it’s the fact that today’s consumers are changing fast — in number, in needs and in the ways in which they communicate. For most CG executives, the big picture is oftentimes mind numbing to even envision. Here, Mark Osborn, global lead, Consumer Products Industry Marketing, SAP, provides a snapshot of the complex future consumer and realistic recommendations for turning him or her into your brand advocate.


What will the future consumer marketplace look like?

Osborn:
Future consumers will be far more numerous, always on and very particular. Recent estimates indicate global population growth of almost 20 percent by 2020, with double-digit population growth expected in emerging markets such as Africa, Latin America and Asia. By contrast, developed markets such as North America and Europe are projected to have flat or declining growth.  

Population growth, in emerging markets in particular, equates to a rapidly expanding global middle class as well as a growing population of the market moving towards middle class status. By 2020, these two segments will be estimated to represent more than 70 percent of the global population with more than 50 percent of global consumption power.

And the vast majority of these new consumers will be constantly connected to the Internet and to one another via mobile devices. They’ll use these devices as a seamless part of their buying experience to find product information, share with each other, search for values, and publish their experiences, instantly and globally.


How must CG companies evolve to serve these consumers?

Osborn:
CG companies are already evolving, but much greater opportunity lies ahead. Creating awareness, promoting value and ensuring on-shelf availability at the point of demand remain critically important, but these are now pieces of a larger, more complex puzzle.
 
The key considerations for consumers are no longer price and availability but, rather, relevance. CG companies must work to engage consumers with relevant information and offers, delivered at the right time and in the right forum and format, to sustain the consumer’s interest and perception of value.

To do that, CG companies now must think in terms of reaching, engaging and influencing consumers through a wide variety of potential touch points along the entire path to purchase, with the understanding that many of those touch points are beyond their immediate control. This will require CG companies to develop a deep understanding of increasingly granular consumer segments, even down to the individual consumer level, from a much more diverse universe of data. Then, they must leverage that knowledge to create experiences that are meaningful and rewarding for the consumer along that path to purchase; and deliver experiences consistently regardless of medium, whether via a mobile device or in a store.


What are the implications for CG companies’ future technology investments?

Osborn:
To address opportunities to engage consumers along the path to purchase, CG companies must continue to invest in technology solutions to promote efficiency and optimization across business functions, including sales, service and supply chain. In addition to these, there are two key areas for future investment consideration.

First, demand signal management, or acquiring, integrating and harmonizing both quantitative and qualitative demand signals while ensuring data quality and compliance.  “Enterprising” the ever-growing streams of granular, real-time data from customer and consumer interactions will enable business functions to “plug in” to a common pool of consistent, timely and accurate data, significantly improving opportunities for cross-functional cooperation and collaboration, both internally and externally.

The other significant opportunity is marketing, as it’s the marketing team that’s most likely to lead the charge when it comes to direct-to-consumer engagement. The marketing department’s opportunity will be enabled by its ability to leverage high-quality consumer-level data, while new technologies and communications vehicles will enable new and different forms of consumer reach and engagement, including both owned and “influenced” channels such as social media.

The abilities to identify and cultivate new opportunities for connecting and building ongoing relationships directly with consumers will be, for CG companies, critical drivers of both technology investment and, ultimately, competitive differentiation in the consumer marketplace of the future.