Trends to Watch in 2018
Digital is reshaping shopping behavior, with mobile and advanced technologies increasingly putting consumers in the driver’s seat of their experiences. With immediate access to countless information sources, even while they are shopping in physical stores, consumers now have the ability to make purchase decisions by researching, browsing, and comparing products and pricing.
This digital revolution is driving consumer goods companies to adopt new technologies to better understand and directly engage with consumers in fresh and unique ways. This year, we’ll see companies more broadly take advantage of major industry trends like the Internet of Things, machine learning, and blockchain to digitally transform and deliver the experiences consumers now expect.
Internet of Things
SAP recently conducted a global survey of 176 executives from the consumer products industry to better understand current IoT adoption trends. In the survey, 39% of executives state they possess a clear understanding of IoT and its implications for their business — however, only 36% have a clear understanding of its potential business value.
IoT has emerged as a powerful mechanism to help CG companies more deeply understand the changing consumer landscape. IoT technology can collect and process information in real time from myriad devices and machines. As the data is continuously fed into an IoT application or platform, a seamless view across the value chain emerges. Companies embarking on IoT initiatives can leverage the technology for inventory management, supply chain transparency, and sensing and reacting to changing consumer demand. They can also use it for product reordering, benefiting immensely from an IoT-backed end-to-end system that flags and automatically reorders items as needed, alleviating out-of-stock issues.
It’s no secret that consumers expect their experience to be seamless throughout the shopping journey, regardless of where, when, or how they choose to interact. Today, machine learning applications have moved far beyond the theoretical and are increasingly being adopted, giving consumers a more personalized experience that considers their purchase history, preferences, and current shopping context.
With machine learning, companies can see which products each consumer is engaging with and what interactions they’ve had with a brand across touch points, both online and offline. This insight enables businesses to better understand each consumer’s needs and cater to those specific desires.
Machine learning can help automatically segment shopper profiles based on behavioral and journey patterns, and it can understand the current shopping context to match the best product or offer to the optimal customer profiles. With machine learning, companies can react to each consumer’s preferences in real time and adjust their outreach strategy as needed.
While blockchain is still in the early stages of application in many industries, consumer goods companies are starting to realize its potential. One example involving deployed distributed ledger technology is to use a shared ledger that records all financial transactions securely, reliably, and transparently.
Blockchains will allow CG companies to track a product’s journey from supplier, to manufacturer, to retailer, and to the end-consumer. This will benefit the rising number of consumers who are invested in where their products are coming from. Consumers will be able to trace the food they eat from farm to table, ensure it is organic or make sure it was humanely treated.
Blockchain can also help with cold chain monitoring so that companies can watch and ensure their perishable goods have been stored at the right temperature throughout the product lifecycle.
To thrive in the New Year, consumer goods companies are learning to navigate in the rapidly evolving digital world. Brands that are embracing these new digital technologies can provide the modern, personalized experiences consumers are seeking.