Writing in Fortune magazine ten years ago, A.G. Lafley, Procter & Gamble’s legendary CEO, famously said, “The consumer is boss, not the CEO.” A lot has changed since Lafley penned those words. Not only did the pandemic turn the world upside down, but it also permanently changed consumer sentiment and buying habits. The impact on consumer product companies has been profound.
Make no mistake: Your boss—the consumer—is still in charge. In fact, he’s pickier and needier than ever before. That’s because consumers today have a lot greater control. No longer stuck with what’s on the shelf at the local big box store, they can go online and choose from an endless shelf of merchandise while AI bots instantly track down the best price.
Your new boss wants you to deliver all these things and a lot more. But how do you keep them happy without letting your costs run rampant? Here are six ways you can keep them happy and protect your bottom line.
1 – Understand your customer more broadly
With your boss possessing even more power and influence these days, it’s time to get to know them better. For many consumers it’s not only about whether their laundry detergent gets their clothes clean. But how does it make them feel emotionally? What about their shopping experience? Was it fast, convenient, and even enjoyable?
Many consumers now value convenience and availability over brand loyalty with roughly 45% of US consumers permanently switching brands or retailers due to lack of product availability. To handle future disruptions, CPG firms are building more agility into supply chains by optimizing every element of the process, from demand sensing to forecasting to transportation and operations.
Some consumers expect even more. Many want your products—and even your company—to reflect their firmly held beliefs, such as commitments to social and environmental causes. By staying in tune with their preference for everything from low-carbon emissions to fair labor practices, you can reap rewards over the long run.
AWS is helping companies get to know consumers better with advanced analytics that probe terabytes of data in minutes using Amazon Simple Storage Service (Amazon S3) to understand what’s driving consumer sentiment and buying habits. In Australia, Nestlé is using AWS IoT Analytics and Apache Solr to connect hundreds of data points in the cloud, helping consumers figure out the most nutritious meal plans for their pets young and old.
2 – Personalize your products and experiences
Increasingly, consumers expect their products and experiences to be tailored to their unique needs. By finding new ways to connect with consumers with truly personalized experiences, you can improve your brand experience and lift your bottom line. Start by helping consumers find or customize the right product for them and create engaging interactions with smart, connected devices or apps.
Personalization can pay off in a big way. A recent study shows that consumers are willing to pay a 20% premium on personalized products or services. Fortunately, there are plenty of tools out there to help you serve up individualized product recommendations. Amazon Personalize, for example, integrates an AI-powered recommendation algorithm into almost every part of the purchasing process from product discovery to checkout. Pomelo, Southeast Asia’s leading omnichannel fashion platform, is combining Amazon Personalize with business logic to create high-quality cart upsell and cross-sell recommendations, helping boost gross revenue by 15%.
3 – Go direct to the consumer
When the pandemic reshuffled people’s shopping habits, consumer brands scrambled to keep up. Direct to consumer (DTC) is one area where consumers made a rapid shift in their shopping behaviors, forcing brands to quickly pivot to build new online selling sites that could serve consumers directly. Learn more about DTC in The Path to Direct-to-Consumer Sales for CPGs.
Online shoppers, especially millennials, are attracted to the streamlined DTC shopping experience. DTC ecommerce sales in the US reached over $76 billion in 2019, and that number is expected to grow to $151 billion by 2022. CPG companies now use DTC to pilot new product offerings, build direct relationships with consumers, and grow new revenue streams. These brands are also growing their ecommerce business in marketplaces like Amazon and Walmart.com, adopting a unified commerce strategy to create a consistent digital experience across all consumer touchpoints.
4 – Drive cost-efficiencies at scale
Not surprisingly, your new boss wants better prices. According to a recent survey, 54% of consumerssaid they are more cost conscious than before the pandemic, and 29% of shoppers increased purchase of budget brands. To protect margins and rein in costs, you need to drive cost efficiencies and economies of scale in your manufacturing process.
The most innovative companies are redesigning their manufacturing and supply chains to be more flexible and scalable, enabling more product personalization at scale. Instead of traditional assembly lines that run the same product in single large batches, CPG companies are building more flexible smart factories that allow for smaller customized runs that save on inventory. Amazon’s new state-of-the-art fulfillment centers are reinventing how companies receive, store, pick, and ship merchandise, achieving unprecedented efficiencies as they replace traditional distribution center models based on pallets with individualized customer packages.
5 – Listen in to social media
The days of the company complaint department are over. Thanks to the power of social media, consumers now wield the equivalent of a giant megaphone to tell the world what’s on their mind. Shoppers are writing more reviews than ever. In a recent survey, they submitted 11% more reviews year over year. The explosion of online opinionating is putting CPG companies on alert. Never before have they had to monitor what’s happening on the web, but they can no longer ignore its power.
Amazon is now the place that consumers go to for all phases of their purchasing decisions—from initial research, to reading reviews and checking prices, to an ultimate purchase. In a new survey by FeedAdvisor cited in Forbes, two-thirds of shoppers typically start their search for new products on Amazon. Remember that negative reviews can easily damage your brand, especially when other reviewers pile on. The lesson for consumer brands is to stay on top of social media to short-circuit a viral spread that could land your brand in big trouble.
6 – Enrich the buying experience
Not just your product, but the experience of buying it can make a big difference to your new boss. If your website is clunky and slow, they’re more likely to disengage and drop out. And if they can’t find the product they want, then you’ve probably just wasted their time. Today’s consumers have little patience for a shopping experience that complicates their life.
Tying together your different touchpoints with consumers is one of the keys to making your experiences stand out. When they sign onto your mobile site, for instance, you could leverage insights from their visit to your physical store, including what they’ve bought there, giving you a leg up on a mobile sale. A speedy checkout process will also make paying for things more experience. This is where tools like Amazon Pay can help CPG companies ease the payment process by making it less painful to fill out forms, and easier to get on with life. Amazon Pay’s checkout also increases shopper engagement, brand visibility, and security for your business, letting hundreds of millions of Amazon customers pay their way, every day.
These are just a few ways you can please your new boss with an experience that will keep them coming back for more. Read Seven Ways to Improve the Customer Path to Purchase Journey to learn more about how AWS and its customers are working together to transform the consumer experience. And if you’re ready to enhance your consumer experience, AWS is here to help. Contact your AWS account team today to get started.