• by John Zealley , Columnist, June 11, 2018

One of the most revolutionary aspects of digital technology is the level playing field it creates. In breaking down market barriers that once protected incumbents, it’s enabling new entrants to disrupt established norms and upset business models with unprecedented ease. 

That poses a serious threat for consumer goods companies. The big global technology players are moving into their territory, exploiting rich consumer insights to capture market share. But smaller, newer, agile-by-nature CPG companies are also outperforming, using their native digital know-how to bypass established marketing, supply chain, and fulfillment models and craft appealing, cost-effective consumer propositions. 

Just look at the way smaller CPG companies have outstripped their more established counterparts in recent years. In 2015, for example, they enjoyed market growth of an extraordinary 49%, while larger companies saw just 3% growth. 

How can established companies pick up the pace? In today’s data-driven world, it all comes down to the consumer. It’s about talking — and listening — to consumers, putting their needs and desires front and center in everything the business does. 

For consumer goods, it means recognizing, first and foremost, that a growing number of consumers want to shop via fast, convenient online channels. According to our “Are your Modern Relationships eCommerce ready?” report, more than 50% of them are already doing so. And their online CPG spending is expected to rise by 4% through 2019, with the greatest shifts seen among the under-50s. Indeed, Millennials spend far more of their consumer goods budgets through digital channels than do Baby Boomers (39% vs. 25%). 

So having the right digital channels to meet younger consumers’ shopping preferences is key. But it’s not enough on its own. Companies must also develop a sophisticated understanding of the specific customer, geographical, and product opportunities available — and move in with new precision-targeted strategies and business models to capture them.

To do so, they need to leverage vast amounts of data about consumers and unlock the consumer-centric analytics insights that can boost online sales. They must strengthen omnichannel capabilities, so consumers receive the same levels of personalized convenience however they choose to shop. And they must connect with those consumers through creative experiences crafted via modern, data-driven, “living” marketing, leveraging a whole ecosystem of services, technologies, and partners.

Innovations like voice recognition and AI are now becoming key components and a key talking point at this year’s Consumer Goods Forum Global Summit in Singapore. Consider this — more than half (54%) of Singapore consumers already use voice-enabled assistants today (compared to 43% of consumers globally), and a huge majority (81%) say they’d use smart reordering services that automatically replenish CPG products such as laundry detergent (versus 65% globally). These technology-led shifts in consumer behavior are opening up connections between brands and end-users that just weren’t previously possible.

This kind of “always on,” highly personalized connectivity offers companies a unique opportunity to reengineer their business models for future growth — and ensure enduring consumer relevance in today’s hyper-competitive CPG markets.