It's Business Unusual for CPGs: Three Tech-Led Routes Forward 
 
By Michael Gorshe


As the wave of disruption continues to gather at pace and the traditional growth drivers of convenience and scale no longer guarantee the same level of success they once did, consumer goods companies are looking for new ways to unleash growth.

Consumers are in control and accelerating the pace of change. They can – and expect to – shop everywhere at any time and buy on impulse across a variety of channels. Digitally-born disruptors are here to give them what they want. These smaller players aren’t playing by the conventional rules, and are steadily chipping away at market share.

To compete, incumbents must become agile enough to respond to fast-changing consumer expectations and establish effective partnerships throughout their ecosystems to deliver differentiated products and services at speed.

The 2018 Accenture Tech Vision for Consumer Goods and Services highlights three critical technology trends that have changed the rules of the game for CPGs.

Trend 1. Frictionless Business 

Outdated systems can be major obstacles to growth and hinder any attempt to deliver a seamless experience across traditional and digital channels – spanning distribution, delivery and after sales – at scale.

It requires CPGs take a totally different approach in developing an architecture that can sense, respond to – and even anticipate – fluctuating market demands by establishing partnerships to increase their channels, reach and speed – as well as a source for innovation.

According to Tech Vision, 90 percent of CG executives agree that the strength and impact of their ecosystem relationships will hinge on how well their technology can support these new partnerships.

Those partnerships will become increasingly diverse and specialized across every facet of the CPG value-chain. For instance, Accenture, APL, Kuehne + Nagel and a European customs organization successfully tested a blockchain solution that can eliminate the need for printed shipping documents, with the potential to save the freight and logistics industry hundreds of millions of dollars annually.

Trend 2. Data Veracity

To operate as a truly modern and connected enterprise, CPGs need to treat data as an asset to share across their organization and externally with ecosystem partners. It requires a joint responsibility to manage and maintain the data as a reliable and accurate asset.

We are seeing CPGs invest heavily to determine what they can get out of data-driven insights and technologies. But as they make these investments, they also need to pay close attention to what’s going into those technologies. Even the most advanced analytics and forecasting system is only as good as the data it’s given to crunch. A point that CPG executives recognize, with 82 percent admitting that organizations have not yet invested in the capabilities to verify the truth within the data.

There is a way forward to address the data veracity challenge. Some of the most foundational steps revolve around ramping up existing efforts: embedding and enforcing data integrity and security throughout the organization, while adapting existing investments in cybersecurity and data science to address data veracity issues.

It’s what Kimberley-Clark has done with its development of in-house automated media buying and consumer behavior analytics. The business is acquiring new insights into how consumers behave at various stages of their journeys across different channels and touchpoints and how they engage with loyalty programs. In addition, data analysis has enabled Kimberley-Clark to change how it buys both conventional and digital media to more productively target spend as well as inform its creative output.

Trend 3. Citizen AI

CPGs seeking to capitalize on AI’s potential to enable personalization, responsiveness and agility will need to take responsibility for how AI will behave in the real world and ensure accurate data is used to train it.

More CPGs plan to use AI solutions for consumer support, more than any other area. And 72 percent of executives seek to gain greater consumer trust and confidence through transparency in their AI-based decisions and actions.

Some are already leading the way. Coffee business Illy has joined forces with OrderGroove to create a coffee subscription service. It uses data and OrderGroove’s Anticipate AI engine to ensure consumers only receive what they need, when they need it. Illy claims that increased customer satisfaction is boosting loyalty and driving life-time value. In other words, it’s building trust. And in a world where trust is the currency of business, raising AI to act responsibly is critical.

The one thing we can all agree is that there’ll be more disruption ahead. That’s why moving to a modern form of CPG enterprise – that can commit to new relationships which meet consumers on their terms – has become so important.


Michael Gorshe is Managing Director of Consumer Goods & Food Retail at Accenture. For more information: www.accenture.com

CPG VIEWPOINTS             
                                                                   Early January 2019
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