Consumer Goods Retailers and Manufacturers Transforming to Maintain Competitive Advantage
The Consumer Goods Forum - Jun 29th 2016, 16:13
Joint research from KPMG International and The Consumer Goods Forum reports a need for a deeper, multidimensional understanding of customers
CAPE TOWN, PARIS and TORONTO, 13th June 2016 - A survey of 400 consumer goods retail and manufacturing executives from 27 countries reveals that companies who want to keep in front of change and secure competitive CGF & KPMG - 2016 Top of Mind Surveyadvantage are transforming themselves into fully integrated omni businesses—able to respond to the needs of customers across all channels and at any point during their shopping.
By 2018, 32 percent of the executives responding to the Global Consumer Executive Top of Mind survey conducted by KPMG International and The Consumer Goods Forum say they plan to evolve beyond their current single-, multi- or omni-channel retail operations into “omni businesses”. This means completely a digitally integrated business —including not just sales channels, but also manufacturing, inventory, marketing, sales, payments and distribution. 42 percent of executives say their customers already expect a seamless experience across sales channels—especially the influential millennial generation.
Willy Kruh, Global Chair of Consumer Markets, KPMG International comments: “The customer is the new point of sale. To compete in a global marketplace with shifting demographics, even today’s best-in-class consumer goods retailers and manufacturers require a deeper, multidimensional understanding of their customers. Hyper customer-centricity brings the customer into sharper focus through the use of advanced data analytics and smart technologies to track and anticipate consumer behavior in near-real time and deliver personalized products and experiences when, where, and how the customer wants them.”
Investing in customer analytics…
The executives surveyed say they are investing significantly in smarter analytics and technologies. While 29 percent say they are currently using data analytics, that proportion will double to 58 percent in the next two years. Usage of techniques such as predictive analytics, customer path to purchase analytics, and artificial intelligence are also expected to double over the next two years, to 59 percent, 54 percent and 43 percent, respectively. Other analytical technologies that executives think will grow fast include real-time tracking systems, scenario modeling and stress testing, and micro targeting.
“Companies need to gather and analyze as much circumstantial, situational, and demonstrated behavior data as possible so they can start to understand the motivation for why, when, and how a consumer makes a purchase decision at any given time. However, this shouldn’t be at the expense of the fundamentals of good customer service,” says Kruh.
… but underestimating more fundamental customer expectations
Despite the investments in sophisticated analytical technologies, research with 7,100 consumers across 19 countries suggests that a majority of retailers and manufacturers may not be paying enough attention to more basic customer expectations.
According to the survey, consumers rank return policies and payment options as two of their top three considerations when choosing which brand or retailer to buy from (number one was competitive pricing). But industry executives thought these would be the two least important considerations for their customers.
Peter Freedman, Managing Director of The Consumer Goods Forum comments: “This report provides further evidence of the pace of disruption that the industry is experiencing from the pervasive influence of millennial consumers, social media and omni-channel business models. So much so, that sometimes industry executives may struggle to keep up with their consumers. According to this report, over 75% of shoppers now say their top buying criterion is detailed and transparent product information – yet only 42% of industry executives think transparency is important. And over half of consumers rate environmental and ethical considerations as very important to their purchase decision, a proportion again underestimated by industry executives”
He continues, “The Consumer Goods Forum exists to help our members address many of the priorities highlighted in the report – including transparency, environmentally and socially sustainable supply chains, and the shift to ‘omni-business models’. In all of these areas, the scale and pace of change requires retailers and manufacturers to collaborate at scale if they are to catch up with consumers”.
Please visit the KPMG website to learn more and download the full report:
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