Today’s consumers are a spoiled lot. They can choose from multiple varieties of the same product. They enjoy higher standards in their food, and are more cued into what goes into their grooming products. And yes, they’re constantly changing the way they shop for these products. You can buy a packet of assorted cookies online, from the convenience of your workstation, via the smartphone, through on-demand delivery, or by using your smart home and voice technology.
Waning product loyalty
The Consumer Products (CP) industry hasn’t been through more disruptive times. Growth rates continue to be challenged in the face of stiff competition from small, yet nimble players who are constantly innovating to cater to the modern-day consumer. Big brands are struggling with waning loyalty, not only because millennials are willing to try out newer products in the market, but also because consumers are increasingly buying brands that appeal to their value system, e. g. , nationalism, healthy living, caring for the environment, etc.
Segment of one
Marketing communication, which was primarily episodic and easier to manage until recently, has evolved at a rapid pace to become always-on and personalised. The next generation of digital customers expects seamless, hyper-personalised brand experiences that are consistent, irrespective of where they buy from. On the part of CP companies, this calls for maintaining a fine balance—delivering messages that are relevant, and are in the context of the individual consumer—while at the same time maintaining consistency globally and in the specific market.
Convenience of e-tailers
Global e-tailers have made the buying experience easy for customers, and are now attacking the next frontier of convenience. Many of them are driving supply chain optimisation to reduce the time from the thought of a product to the point it is available in your hands to almost zero. Convenience has become a far bigger driver for consumer purchase decisions than age-old brand loyalty. This is pushing the growth in private labels as they are often fit-for-purpose, economical and convenient. As customer visits to centralised shopping locations become less frequent, brands can’t afford the inertia of sitting quietly. The only foil to convenience is value. Consumer product companies need to figure out how they can be more valuable to their consumers’ lives. This can be through personalisation, a focus on real consumer needs or through products evolving to become a service. According to a study, 80 percent of consumers are more likely to make a purchase when brands offer personalised experiences. For example, skincare brand Neutrogena has 3D-printed facemasks, ‘MaskiD’. Customised in ingredients and face shape, it combines personalisation and technology to align the mask with a customer’s specific skin concern areas.
Imperatives for consumer product companiesInnovation is key: Businesses need to innovate fast, understand and predict shifts in consumer behavior better than their laggard competitors. CP organisations must drive product innovation on the basis of consumer preferences instead of blindly relying on brand affinity. They should look at significantly reducing product development and market rollout cycles. This can be achieved through agile processes, driven by the power of technology. There’s a phenomenal opportunity waiting to be tapped. A holistic view of marketing: Consumer product players need to fundamentally transform themselves from being a purely product-driven organisation to creating holistic marketing strategies. This will enable them to create sustainable brand experiences and forge direct customer relationships that last. Maintaining the global-local balance, they should push decision-making locally to where the marketers are the closest to the consumers without compromising global innovation or efficiencies of scale. To achieve that in today’s digital world, CP companies need to have the right governance, process, technology ecosystem and market enablement capabilities. Adding value: E-tailers are leading in the convenience game, while private label products are winning a larger share of the shopping cart. Offering over 120 private label brands, Amazon can identify shoppers who are bargain-hunters, frequent browsers or organic food enthusiasts on the basis of their current shopping behavior. It can then design products to target the most profitable segments. Therefore, CP organisations need to look at enhancing the product value by focusing on the consumer across the entire funnel and take initiatives that drive connection at all points of the funnel. This will result in tactics like media optimisation, e-retailer content optimisation, sustainability-oriented brand messaging, etc. The final word
Amidst all this digital disruption, CP companies are staring at some vital strategic questions: How to best utilise online retail channels to build a profitable business; How to leverage technology-driven opportunities to understand today’s digital consumers better and interact with them. All said and done, as an increasing number of consumers explore, buy, and engage one-on-one with brands digitally, CP companies must make innovating their second nature, or risk being obsolete. The auhtor is GVP and CPG Delivery Lead at Publicis Sapient.
First Published: Sep 25, 2019, 10:58
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