Regular discussions with clients emphasise that companies offering consumer products have significantly invested in digital tools and data analytics in recent times. These investments are not without merit; as highlighted by Forbes, it is projected that digital innovations and data analytics could unlock around US$500 billion in value for the consumer packaged goods (CPG) sector by the year 2023. This advancement has placed them at the forefront of industries capable of maximising the potential of consumer intelligence.
Up to this point, the progress is commendable. However, these companies are now on the brink of a more challenging phase: figuring out profitable means of utilising this vast wealth of consumer data, all while operating within an increasingly digital retail and customer interaction landscape.
It is not just consumer sectors grappling with the complexities of data utility. As the recent publication by PwC, Beyond Digital, suggests, triumphing in the modern business environment calls for more than just digitisation. It demands that companies harness their collected data to carve out competitive edges in novel ways. For this, acquiring or refining the necessary instruments and expertise to sort through and decipher large data sets is vital, enabling informed, timely decisions and enhancing the customer’s experience.
Advancing with Caution
Consumer sector corporations, while endeavouring to convert customer data into economic gains, must proceed with exceptional caution. Findings from our forthcoming Global Consumer Insights Pulse Survey (expected release on June 14) underscore this need. Out of over 9,000 individuals surveyed across 25 territories, 58% indicated that their trust in a brand is heavily influenced by how their personal information is safeguarded. Furthermore, 54% are willing to share their data only if companies possess transparent data security policies. Privacy considerations take on heightened importance in certain regions, such as the EU, where the General Data Protection Regulation (GDPR) has made residents notably more cognisant of data protection concerns than their American counterparts.
Consumer goods companies have heavily invested in data and digital competences. The daunting task now is to uncover methods to capitalise financially from this wealth of information.
This implies that as consumer-focused firms aim to monetize customer data, they must navigate within the confines of stringent data protection laws and maintain rigorous data governance procedures.
Retailers’ Leading Edge
Both retailers and consumer goods firms encounter distinct paths on this venture. For retailers, their advantages are clear. Due to their continuous, direct interactions with customers, such as through loyalty programs and meticulous attention to product flow, retailers accumulate extensive data rich with customer insights.
Armed with vast pools of client information, retailers are placed to achieve three specific objectives:
• Enhance and personalise the shopping journey for clients by predicting their preferences, presenting the ideal products at opportune times through the best channels and service combinations, and modifying the entire purchasing process to their specific demands without them noticing.
• Streamline multichannel digital retail operations, both within their organisation and throughout their partner networks, via improved data-driven collaboration.
• Monetise data insights by selling them externally, thereby transforming their data reservoirs from cost-bearing to profit-generating assets.
Many prominent retailers that I’m in contact with are pursuing these objectives with varied degrees of sophistication. They are deploying their technological resources and workforce to develop a business structure that not only leverages data internally but can also offer valuable insights to external entities. In doing so, they’re creating more worth for themselves and expanding the commercial potential within their ecosystems.
Catching Up in Consumer Goods
For consumer goods corporations, the capacity to transform data into actionable insights is just as pivotal for success as it is for retailers. However, these entities are usually one step further from the end-user and lack the same level of access to consumer behavioural, preference, and transaction data. This distance positions them to be more vulnerable to marketplace disruptions, perhaps missing the quiet but significant shifts in consumer tastes.
While some brands are venturing into direct-to-consumer strategies or even launching retail outlets, it is my belief that a majority will find it necessary to integrate into the retailers’ data ecosystems. This approach will provide them access to supplementary insights, facilitating the development of tightly synchronised supply chains and enabling them to meet consumer desires for transparency and product traceability.
The Pursuit of Value
The takeaway is that going beyond digital is today’s business imperative, yet challenges can vastly differ even within the same industry. Question where your business currently stands in its journey to convert data into meaningful value. Do you possess the capabilities to accumulate, cleanse, and safeguard your data effectively, allowing you to craft use cases that will drive innovative business models? If not, the time is ripe to enhance your facility with data and people, striving to go beyond digital and gaining a lead on your competition.
