Platform businesses bring together producers and users in efficient exchanges of value. Uber, for example, connects drivers and passengers just as YouTube connects videographers and viewers. And, platform businesses benefit from network effects—the more participants on the platform, the greater the value produced.
Platforms allow collaboration, which has become essential for CPG companies that want to survive in the digital world. The power of platforms enables CPG companies to:
Engage consumers. Consumers have taken control of the path to purchase—they research products online, they discuss them on social media, they share brand preferences with friends and they want to influence product design and co-innovate with brands. Operating as a platform enables CPG companies to capture attention and build strong connections with consumers.
Meet high expectations. Consumers today have “liquid expectations.” They have set a high bar for experiences that seep across industries. By connecting to the broader ecosystem, CPG companies can provide solutions that extend the brand beyond the product, to a service and to enhanced experience.
Generate lifetime value. Higher engagement among consumers and higher usage of core assets associated with the brand will strengthen and lengthen consumer relationships. CPG companies also have greater opportunities to create value by harnessing and monetizing ecosystem interactions.