A CEO agenda for the future consumer: the global point of view
The CEO Imperative series, which looks at the global perspective, provides critical answers and actions to help leaders reframe the future of their organizations. It identifies five steps to help you transform more quickly.
Over two-thirds of companies (68%) plan to spend more on transforming their business and operating models in the next three years1. Yet they may want to be even bolder, as only 28% say that their business model is the area, they will change most in response to current trends2. Here are some key actions for CEOs to meet consumers where they are headed:
1. Redesign your business around how people live, not what consumers buy
CEOs have long talked about putting the consumer at the center of their business. Only a few have come anywhere near achieving this. One reason is consumers have been reluctant to share the data required; another is companies have lacked the capabilities to make the right use of it. The pandemic has driven an explosion in the sharing and use of consumer data: for example, in MENA, around 77% of people will share data in exchange for healthier product recommendations.
Consumer products companies need to become listening organizations, using powerful analytics and artificial intelligence (AI) to manage a repository of data that provides a single version of the truth for each consumer served. A listening organization has the ability to meet the constantly changing consumer needs and can adapt products and services for segments it wants to engage.
2. Compete for shoppers wherever and whenever they are
There have never been more ways to reach shoppers, or more brands scrambling for their attention. During the pandemic, 87% of consumers have changed the way they shop. This will continue, but only 36% of companies are currently investing to accelerate the digitization of customer journeys and business processes3.
If you don’t leverage all the possible ways your business can engage with shoppers and understand how to optimize each one, you’ll struggle to win. Capitalizing on the changing ways of shopping requires tracking and connecting with people across social and digital media and within your own channel ecosystem.
3. Rebuild your supply chain around the consumer
Channel shifts, stockpiling, store closures, and border issues have wreaked havoc with the consumer goods supply chain over the last year. And 50% of companies expect the supply chain to be the part of their business that changes the most over the next 12 months4.
The supply chain of the future can act as an engine for growth and a key competitive differentiator. But it must be agile, flexible, efficient and resilient. It also needs to be digitally networked, so that visibility improves. Leaders should reimagine their supply chain operating model. There are strategic choices to make about what gets done locally, regionally and globally; how warehouses and manufacturing sites best fit into the chain; how to create real-time, end-to-end visibility and monitoring; how to rationalize SKUs; and how to reduce environmental impact and waste.
4. Change your operating model to make it “asset right”
Many consumer products CEOs have experimented with outsourcing and partnering during the pandemic, often as an agile response to supply chain disruption. This should continue and accelerate, as it’s the only way to meet changing consumer expectations with the speed and efficiency the future demands, without taking on excessive risk.
You need a clear vision of which capabilities give you differentiated value and where you want to outsource or share value creation with an ecosystem of partners. This is the “asset right” model that will give you the ideal blend of in-house, outsourced or partnered capabilities. Today, while 72% of consumer products leaders are making significant investments to develop and manage their business partnerships5, 82% have not yet clearly defined their role in future ecosystems6.
5. Look at value through a wider lens
As channels and occasions blur, companies need to look beyond siloed profit measures and at the wider impact on their business. For example, consumers have embraced home delivery, but they don’t like paying for it. It is their number one frustration with online shopping. Given the rapid growth of e-commerce since the beginning of the pandemic, the business case for re-evaluating your e-commerce model to create profitable cost to serve has never been more important. The fact that most consumers are willing to share personal data makes the e-commerce business case even stronger.
While such activities viewed in isolation may not make sense, they’re essential to your success when you look at them in the wider context. They create immense value outside their direct profits (or losses). So, look again at all your capabilities and take a “systemic approach” to profitability.