Retaining the
New Consumer Through the Power of Technology
EXECUTIVE COUNCIL VISION
Consumer expectations, and the ability to deliver upon them, have never been one-size-fits-all, but the pandemic served as a once-in-a-lifetime transformation. For many retailers and consumer goods companies, product shortages and new behaviors resulted in scores of new consumers discovering and relying on their goods and channels. And with some of these changes slated for permanence, both retailers and CGs must rethink manufacturing, marketing, and fulfillment in order to retain them.
64%
74%
82%
Leading consumer
brands investing in augmented reality, virtual reality, 3D content and 360-degree video
Consumers reporting technology as a benefit, agreeing it helps retailers provide a safe, comfortable, and convenient experience
CG manufacturers planning to use modern technology, such as robotics, to enhance safety and efficiency now or into the future
Source: Accenture, “Opening the Door to the Next Wave of Digital Commerce”
Source: Zebra Technologies, “The Essential Shopper Experience: Safety, Speed and Convenience”
Source: SAP, “The Consumer Products Pulse Check Survey”
Portrait of the New Consumer: Digital and Demanding
When it came to COVID-prompted disruption, consumers stopped turning a blind eye fairly early into the pandemic. Just 21% of consumers were forgiving brands and stores whose service had been disrupted by COVID-19 in summer 2020, with increasing numbers citing quality of service as a bigger priority.
“In other words, consumers are no longer accepting of the pandemic as an excuse.”
Source: EY, “US Future Consumer Index Edition 4: Human Needs in the Consumer Season”
Consumers More Likely to Buy From a Brand Offering
Messaging Matters
70%
Fast Shipping
Source: Publicis Sapient, “The Digital Life Index"
58%
Customer loyalty program
42%
A way to buy directly from the brand’s website
29%
Customized or personalized products
28%
A way to “try on” or “try out” products online
33%
of consumers are more likely to buy from a brand that aligns with their values
69%
of consumers believe brands must positively change the world
Source: Publicis Sapient, “The Digital Life Index”
Source: EY, “The CEO Imperative: Accelerate to Get Ahead of the Changing Consumer”
Today’s New Consumers Are Curious
While they may not have been very forgiving, consumers have certainly been curious and eager to try new brands.
43%
70%
50%
of buyers were new to a CPG brand in 2020, up from 32% in 2019
Source: Oracle, “New Study Reveals Dramatic Shifts in Consumer Shopping Behavior One Year Into the Pandemic”
Source: SAP, “SAP: COVID-19 Causes Lasting Supply Chain Issues for Shoppers”
Source: Accenture, “Opening the Door to the Next Wave of Digital Commerce”
switched brands during the pandemic due to supply chain issues
Consumers say they’d better remember brands that regularly engage them with immersive technologies
29%
never went back
greater than
Digital Consumers Are Not Confined to One Generation
This willingness to purchase online extended across all generations during the pandemic, with baby boomers leading the charge of change.
5.7x
4.3x
MILLENNIALS
BABY BOOMERS
Online Shopping Usage
Consumers Who Expect to Continue Shopping Online at an Increased Rate
64%
57%
59%
44%
44%
44%
18-25
year-olds
26-35
year-olds
36-45
year-olds
46-55
year-olds
56-65
year-olds
66+
year-olds
Source: ChannelAdvisor, "How Consumers Will Shop This Holiday Season & Beyond"
Source: Oracle, “New Study Reveals Dramatic Shifts in Consumer Shopping Behavior One Year Into the Pandemic”
This online shift is a challenge for retailers — a frictionless experience means they must be able to update personalized consumer information in real time.
“Since autonomous data platforms and services are unique in their ability to help efficiently address these challenges, their adoption by retailers is expected to increase in the coming years.”
Michael Forhez, Oracle Industry Strategy Group Global Managing Director of Consumer Markets
“It’s all about better consumer engagement, and one of the
drivers of this is better consumer experience. Consumer products companies need a state-of-the-art ‘service cloud’ to capture and act on all of the interactions they have with consumers of their product post-purchase, irrespective of the channel(s) used for these interactions. Such an ‘omnichannel’ solution must seamlessly interact with social, chat, email and voice communications
from the consumer to the consumer services team.”
Jon Harding, Conair Global CIO
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Meeting Today’s Consumer Requires Enterprise-Wide Agility
After abruptly rewriting their strategies to navigate the pandemic, many consumer goods brands and retailers are using this unique moment to implement long-term changes to their spending. These shifts span from streamlining inventory visibility, to entering new alternative customer channels and routes to markets, to new and innovative product development and consumer engagement techniques.
6 in 10
retailers say the pandemic accelerated their technology spending plans
Source: Zebra Technologies, “The Essential Shopper Experience: Safety, Speed and Convenience”
28%
Significant changes
Source: SAP, “The Consumer Products Pulse Check Survey”
CGs Foreseeing Changes in their Go-to-Market Strategy
64%
Moderate changes
4%
Minor changes
Case Studies
AWS
Siemens
Dollar Shave Club accelerated its marketing capabilities by implementing a new analytics environment. By receiving automatic notifications to its email marketing platform, the brand amped its ability to make speedy and informed decisions on marketing campaigns and segmentation strategies. It also drove data democratization, with all business users able to access fresh data with no restrictions, and query that data, using BI tools.
8 hrs.
How long it took to provide data insights to marketing and other teams
Source: AWS, “Dollar Shave Club Uses AWS to Accelerate Data Analysis, Improve User Experience”
5 min.
How long it takes now
BEFORE
AFTER
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CGs that have digitized their factories and leverage virtual simulation have positioned themselves well to meet today’s escalating speed-to-market demands. Electrolux, for example, partnered with Siemens to digitize its factory in an initiative resulting in a 30% speed-to-market increase. Chocolate Valor is similarly digitizing its factories so data can be displayed in real time across its entire supply chain, expected to improve flexibility enterprise-wide.
Source: Siemens, “How Low Code Extends the Power of Flexible Manufacturing”
Demand Planning Is a Crucial Component of Meeting Today’s Consumer Needs
In order to improve demand planning and their ability to predict the wants of the future consumer, CGs must improve inventory visibility and demand sensing technologies as close as possible to the point of sale, as well as connect directly with consumers through loyalty programs.
“This will result in valuable data for a combination of reactive response, and detailed planning by SKU with an intelligent prioritization engine to shape its portfolio dynamically.”
ANTONIO PARRA
Grupo Bimbo VP Global Digital Transformation and Data & Analytics
8 in 10
retail associates agree real-time inventory visibility would help them provide a better experience
Source: Zebra Technologies, “The Essential Shopper Experience: Safety, Speed and Convenience”
“When planning for future demand or evaluating current demand signals, heighted care and attention should be directed to the supply chain requirements and a realistic assessment if you can achieve those demand levels. Will there be sufficient product availability?”
Steve Sigrist, Newell Brands VP Customer Service
“We must accelerate tools to support quality and in-stock rates. We must orchestrate ways to engage and drive visibility with shoppers. It’s not too late, and the bar is still very low. Now is the time to create a strategy, roadmap, and align your organization around our exciting future together.”
Ethelbert Williams, The Boston Beer Company Head of eCommerce
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Traditional Data Sources Aren’t Enough
Many companies are looking to external data sources like weather, traffic patterns, and Google search trends into order to better predict demand. Weather prediction models, for example, can help retailers prioritize shipments of stock to stores, determine appropriate staffing levels, and manage product promotions and markdown strategies and timing.
Source: Alteryx, “Using Weather Intelligence to Predict Retail Sales”
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Did
you know?
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Historical data shows that 5-day forecasts
are 95% accurate, while 7-10-day forecasts are around 80% accurate.
Source: Alteryx, “Using Weather Intelligence to Predict Retail Sales”
“Connecting external data such as web traffic, search engine, weather, freight sensors, promotions and other events greatly improve the accuracy of predicting what product needs to be where.
It sounds simple enough, but we are talking about thousands of variables across millions of rows of data. AI can find the best variables and models, basically ignoring the noise and zeroing on the signal.”
Richard Widdowson, SAS VP, Global Retail and CPG Solutions
The CGT/RIS Executive Council is a forum for industry innovators and disruptors from retail and consumer goods to identify the latest technology and consumer value chain trends across channels. The network focuses on sharing insights and learnings to help drive inspiration, action, and purpose-driven leadership across the industry.
Brands and retailers must also obsess about quality and consistent data across their ecosystem, elevating the digital shopping experience across all touchpoints to provide a fun, rewarding and sticky consumer journey.
There is widespread use across the industry of artificial intelligence to automate data connection and blending for a better picture of future product demand.
There is widespread use across the industry of artificial intelligence to automate data connection and blending for a better picture of future product demand.
Member
Insight:
Jon Harding
Member
Insight:
MICHAEL
FORHEZ
Member
Insight:
ETHELBERT
WILLIAMS
Member
Insight:
STEVE
SIGRIST
Member
Insight:
richard
widdowson
As we exit the pandemic, we tapped into the power of the CGT/RIS Executive Council for a look at today’s new consumer, as well as insight into how both brands and retailers can transform them into loyal buyers through technology.
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