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PERSPECTIVES


Using digital to improve consumer experiences

Oliver Wright discusses how CPG leaders are leveraging digital to find new ways to tailor, personalize and deliver products.

Tell us about your role at Accenture.

I’m the global lead for Consumer Goods strategy at Accenture. We serve large, multinational organizations with a particular focus on the intersection of strategy and technology. This means helping clients discover how they can use technology to deliver new growth opportunities, and improve their operating margin and new business models. This includes opportunities for intelligent automation and exploring opportunities to take advantage of the emerging on demand economy.

You were one of the contributing authors of the World Economic Forum’s “Digital Consumption” report. What were some of the key takeaways?

To me, the most important message was the degree to which digital consumption is increasingly shaped by experience. Consumer goods leaders today focus on exploring, "is there a way for me to create excitement and emotional connection with my consumers in every stage of their involvement with the product?" Vitally, this needs to provide a consistent experience regardless of whether this comes in a physical retail environment or online.

How can CPG companies create those kinds of connections?

They can do it in three ways:

  1. Create an experience around the product itself. For instance, when you walk into Nespresso, you get a sense that this is a curated, premium offering.

  2. Personalize it. How can you take a product and tailor it to an individual? Coke can put your name on the outside of a Coke bottle. Nike can tailor your shoes to your own specifications. Lego allows you to create a Lego set that might be sold. Kellogg’s can tailor the ingredients for your muesli. It’s about creating something more connected to the person as an individual.

  3. Tailor your range of offerings to the individual. Go into Macy’s and use the ShopKick app. It will tell you, "you might be interested in this section of the store, or this evening dress." It’s not a tailored product, but they are tailoring the range of products presented to you. The Starbucks app also does this. Ask for a product before you go in, and pay with your mobile device. It speeds the transaction and makes it more straightforward.

What did you find most surprising about the findings in the report?

The fact that over 50 percent of all purchases made today are influenced digitally. This influence can be felt in a variety of ways. A consumer may choose to buy the same product but from a different store, from the same store but through a different channel (e.g., click and collect), visit the store and end up buying a different product due to the feedback he or she saw from a friend on social media or buy the same product but as part of a bundle or with an associated experience.

It is whole-scale switching in ways we haven’t seen before. Vitally, it is underpinned by the fact that consumers are much less loyal than they have been. Most people are even willing to purchase a product from a company that they would view as non-traditional, either someone they have not heard of before, or from a company they associate with another industry entirely.

What should CPG companies do differently to respond to these changes?

Incumbent CPG leaders need to think differently about business models and the consumer experience. Business models move from one area to another. Think of AirBnb changing the hospitality industry. Today we have BonAppetour that allows you to enjoy homemade meals if you’d rather eat with a local family or host than go to a restaurant, the same business model as AirBnb, but applied to food!

Digital opens up new venues. If you’re a CPG company or a retailer, can you use digital to add experience, personalization or insight to the consumer's experience? For example, one company looked at whether they could deliver the cleaning supplies or groceries for an AirBnb rental. There are a host of ways to participate in new ecosystems.

Companies must also think about the consumer experience. Do you create new, unique experiences with your own product portfolio, or is it more of a utility? Can your products be fulfilled via subscription or the Internet of Things? Some products, like those to do with your health, your child or your dog lend themselves readily to experience; others, famously, like “rubber bands,” are harder to create an experience around.

What are some of the biggest challenges that CPG companies are facing?

The democratization of the industry. It is increasingly easy for someone to set up a CPG company—at a low cost, using contract manufacturing to supply and then to sell products through Amazon. This is increasingly where growth is coming from.

The most well-known example is likely Dollar Shave Club. This razor business started as a YouTube sensation. They send high-quality razors via subscription at a lower cost because, as they claim, they are not paying for pricey sponsorships of athletes.

Describe the best digital experience you have had with a CPG company as a consumer.

My personal experience is with companies that are doing something that is drawing the family together to engage in an experience. Companies like HelloFresh or BlueApron get people doing something healthy and interactive as a family. My kids would say Netflix—they have totally abandoned traditional television. I think this is something that many of my colleagues can relate to. One recently told me that his daughter asked him “whether Netflix was in black and white when he was young!”

How do you keep up with what is going on?

As a team at Accenture, we track all of the new startups funded by venture capital. We look to see if there is anything about them that is unique or highly unusual.

Is your family wrapped up in digital consumption?

I have two 15-year-old boys who are tech-literate. My 10-year-old daughter is less so. The boys are in a classic group. They are digital consumers. They assume you don’t go to the grocery store; you get food or ingredients delivered. You get clothes delivered to your door and send back what you don’t want. The time we spend shopping in stores is tiny. It’s a totally different world.