Winning the Hearts of Digital Consumers
It’s no secret that consumer goods companies are searching for new ways to unleash growth and scale at speed. The wave of disruption has gathered relentless momentum and the traditional growth drivers of convenience and scale no longer guarantee the same level of success they once did.
Consumers are in control and accelerating the pace of change. They can shop everywhere, at any time, and buy on impulse across a variety of channels. They expect their needs to be anticipated, their issues resolved, and their shopping experiences personalized — all at hyper-speed — across all platforms.
Digitally born disruptors are here to give them what they want. These smaller companies, who aren’t playing by the conventional rules, are steadily chipping away at market share.
Incumbents, therefore, must move to become modern, connected enterprises. They must evolve to operate in a world that’s moving faster all the time and embrace these new, faster models. Doing so will let them innovate at speed, effectively partner throughout their ecosystems to deliver differentiated products and services, and become agile enough to respond to fast-changing consumer expectations.
Accenture's "Consumer Goods and Services Technology Vision 2018" highlights three critical technology trends that have changed the rules of the game for CG companies:
1. Frictionless business
Consumers expect a frictionless experience. CGs must deliver at an unprecedented scale across traditional and digital channels — spanning distribution, delivery and after-sales.
Outdated systems are major obstacles to growth and require organizations to take a totally different approach in developing an architecture that can sense, respond to, and even predict market demands quickly and at scale. Successful companies will compete through technology-based partnerships to increase their channels, reach and speed and become a source of innovation for new products, services and experiences.
According to Tech Vision, 90% of CG executives say the strength and impact of their ecosystem relationships will hinge on how well technology can support new partnerships. And 94% expect to increase their use of micro-services over the next 12 months.
These partnerships will become increasingly diverse and specialized across every facet of the CPG value chain. For example, Accenture, APL, Kuehne + Nagel and a European customs organization have successfully tested a blockchain solution that can eliminate the need for printed shipping documents, potentially saving the freight and logistics industry hundreds of millions of dollars annually.
2. Data veracity
In a world that’s more data-driven than ever, inaccurate and manipulated information threatens to compromise the insights that CGs will increasingly rely on to plan, operate and grow. Left unchecked, the potential harm from bad data becomes an existential threat.
To operate as a truly modern and connected enterprise, CGs must treat data as an asset to share across the organization and externally with ecosystem partners. That requires a reciprocated responsibility to manage and maintain the data as a reliable, accurate asset.
Companies are investing heavily to determine what they can get out of data-driven insights and technologies. But as they make these investments, they also need to pay close attention to what’s going into those technologies. Even the most advanced analytics and forecasting system is only as good as the data it’s given to crunch — a point that CG executives recognize, with 82% admitting that their organizations have yet to invest in the capabilities to verify the truth within the data.
There is a way forward to address this challenge. Some of the most foundational steps revolve around ramping up existing efforts: embedding and enforcing data integrity and security throughout the organization while adapting existing investments in cybersecurity and data science.
Kimberly-Clark has done this through the development of in-house automated media buying and consumer behavior analytics. The business is acquiring new insights into how consumers behave at various stages across different channels and touch points, and how they engage with loyalty programs. In addition, data analysis has enabled KC to change how it buys both conventional and digital media to more productively target spend as well as inform the creative output.
3. Citizen AI
Artificial Intelligence has grown to the point where it now often has as much influence as the people putting it to use. CGs seeking to capitalize on AI’s potential to enable personalization, responsiveness and agility will need to take responsibility for how it will behave in the real world and ensure accurate data is used to train it.
CGs plan to use AI solutions for consumer support more than in any other area. And 72% of executives seek to gain greater consumer trust and confidence through transparency in their AI-based decisions and actions. For one, coffee business Illy has joined forces with OrderGroove to create a subscription service using data and an AI engine to ensure that consumers only receive what they need, when they need it. Illy claims that increased customer satisfaction is boosting loyalty and driving lifetime value; in other words, it’s building trust. And in a world where trust is the currency of business, raising AI to act responsibly is critical.
The one thing we can all be sure about is that there’ll be more disruption ahead. That’s why having a business that can sense and respond to market conditions and consumer behavior has become so important. It’s about moving to a modern form of CG enterprise that can commit to new relationships that meet consumers on their terms.
Laura Gurski is senior managing director and global lead at Accenture.