Between 2011 and 2016, large U.S. consumer companies lost an estimated $22 billion in sales to smaller brands. Today, consumers are in the driver’s seat. The rise of craft ale, local, organic and natural products is testament to the hyper-growth possible when companies understand changing consumer behaviors, and think differently about the customer proposition.
New research highlights how out of sync many large organizations are with their consumers today. According to an Accenture study, 61% of consumers switched companies last year because their needs were no longer met. Once gone, more than a quarter will never go back.
The stakes are significant. U.S. companies alone risk losing a staggering $1 trillion in revenue if they fail to maintain consumer relevance.
While the majority of business leaders at top-performing companies agree that consumer expectations are influenced by relevant, real-time and dynamic experiences, many admit they struggle to move quickly enough to deliver. Eighty-five percent say their company needs a more agile approach, and a similar number agree they need to reinvent their business to be successful in today’s challenging environment.
Becoming a “living business” — a company that relentlessly focuses on anticipating and responding to fast-changing consumer needs — is now critical. To succeed at this task, marketers must embed four key dimensions:
Intelligent experiences: deliver through a dynamic understanding of each consumer.
Responsive innovations: ensure infrastructure and culture are primed to embrace new ideas, behaviors and technologies to respond to evolving opportunities and consumer needs.
Agile operating models: act as living organisms to break down internal siloes and deploy the latest technologies to advance performance.
Guided by purpose: embrace behaviors, beliefs and values that align the organization and shape consumer interaction.
Companies that successfully reinvent themselves are three times more likely to achieve above-average revenue and profit growth.
Brands like Nike are leading the charge. The company harnessed responsive innovation, investing in a new internal structure that unites its web presence, apps, direct-to-consumer retail stores and the Nike+ platform.
Nestlé is rethinking the way it operates. It recently announced plans to merge its scientific research operations into one unit to speed up the development of new products and get them to market quicker to better compete with smaller rivals.
To tap the living business growth opportunity and become a more modern consumer packaged goods company, five core capabilities are needed:
1. Target core and disruptive growth initiatives.
2. Design products and services as hyper-relevant platforms.
3. Build prototypes and scale new and innovative experiences.
4. Scale a broad set of ecosystem partners.
5. Rewire the workforce through new technology and a culture of hyper-relevance.
With big brand status and longevity no longer enough to guarantee future success, a new growth formula is needed: one that keeps consumer relevance front and center, every time.