When P&G developed an assistive shaving razor designed for caregivers to use on people who cannot shave themselves, it changed lives1. This groundbreaking idea was the brainchild of some of the industry’s most innovative thinkers: consumers.

Consumer goods brands can develop better, more relevant products and services faster when they engage consumers actively as innovators—which is just the first step in transforming consumer relationships across the value chain. This capability is critical with incumbents losing market share to smaller, agile companies that are rapidly bringing products to market that fill consumers’ needs. In emerging markets alone, brands that were not in the top 100 just five years ago are now in the top three.2

In a time of self-empowered consumers, open innovation has become a must-have capability. So how do companies do it right?

— Till Dudler, Managing Director – Accenture Strategy

Putting consumers into consumer goods

Consumer goods players do not understand their consumers as well as they should. And traditionally consumers have been held at arm’s length. Now in the digital world, the relationship between brands and consumers has fundamentally changed. Consumers are creeping up the value chain (see figure). Brands that embrace them as part of their extended business ecosystem can realize top- and bottom-line benefits. The best place to start is with innovation. This stage is the make-or-break point in the customer engagement continuum. Breakdowns here jeopardize everything else that follows.

CPG brands benefit when consumers are integrated across the value chain —a new, stronger relationhip builds from innovation to excecution

Creating boundary-busting relationships

Tapping into consumers to inform innovation is not a new idea in consumer goods. But traditional tactics like consumer panels, focus groups and surveys are slow and costly—massive liabilities with consumer tastes and market dynamics changing so fast. Moreover, one-way feedback mechanisms perpetuate an “us and them” dynamic between brands and consumers that stifles meaningful insights.

Digital technology breaks down boundaries between brands and consumers, expanding the ecosystem and integrating consumers as innovators. The key is to engage consumers as part of the broader ecosystem and as part of the extended workforce. It is a profound change from companies owning and managing brands to giving consumers an active role in brand development.

Consumer goods executives are conflicted here. Sixty-three percent believe ecosystem participation (including consumers) supports innovation.3 And 70 percent of industry CMOs say they need “reality checkers” (outside people including consumers) to feed insights into the company to drive growth. However, just 15 percent of consumer goods CMOs and CEOs think of end-consumers as critical ecosystem collaborators.4

63%

of consumer goods executives believe ecosystem participation (including consumers) supports innovation.

70%

of industry CMOs say they need “reality checkers” (outside people including consumers) to feed insights into the company to drive growth

15%

of consumer goods CMOs and CEOs think of end-consumers as critical ecosystem collaborators.

Innovation never looked like this

Crowdsourcing is one way to invite consumers directly into product design. P&G used crowdfunding platform Indiegogo to perfect a promising heated razor in development. The objective was not to solicit funding. It was to test demand, gain feedback and create a community of engaged consumers.5 Research has shown that crowdsourced products outperform the market by up to 20% when labeled that way.6

In addition to working directly with consumers to innovate for “right now,” brands can use indirect approaches to predict trends that will shape future buying behaviors to innovate for tomorrow. One way is to use AI and advanced analytics to analyze search trend data and social chatter. Brands can also connect with influencers and professional trend spotters who have the pulse of the consumer psyche. Approaches like these have predicted hot trends—from charcoal products and non-dairy milks to organic snacks.

Trust is on the table too

The innovation stage is a critical place where companies build (or lose) consumers’ trust. The trust compact that does (or does not) take root here is a critical dependency that impacts the nature of the brand-consumer relationship across the rest of the value chain.

There is also much at stake financially for companies related to trust. Accenture Strategy research reveals that, on average, companies that experienced a material increase in trust also experienced a corresponding 2 percent increase in revenue growth. For a US$30 billion company, that’s US$600 million that could be re-invested in growth. A loss in trust, however, has a greater impact: If that same company experiences a material loss in trust, it would experience a corresponding 5.4 percent decrease in revenue growth, on average, of almost US$1.6 billion.7

Innovate to transform innovation

As great innovators like Henry Ford and Steve Jobs have said, consumers may not have the foresight to create the big innovations. This is debatable. What is clear is that co-innovation creates an invaluable, but elusive, intimacy that brands need to drive growth. Here is where to start:

  • Create the new R&D. Companies should evolve from internally-driven innovation engines mired in hand-offs and silos to agile models that bring together multidisciplinary teams of ecosystem partners and consumers to innovate at speed and scale.
  • Elevate workforce planning. Instead of looking at the tasks that must be done and the employees needed to complete them, companies should reinvent workforce planning. Strategic workforce planning that includes consumers as part of the extended workforce is critical.
  • Look across the value chain. Innovation is the tip of the iceberg in the new dynamic between brands and consumers. Leaders will actively explore ways to engage consumers across the entire value chain—innovation, manufacturing, marketing, sales, and even distribution.

This is a bold future. One where the most successful brands co-create with consumers to execute every part of the value chain. Because today’s consumers can (and should) do a lot more than consume.

1Katharine Schwab, "How Gillette Designed a Razor for Men Who Can’t Shave Themselves," Fast Company, October 2, 2018.

2Accenture analysis based on Euromonitor data.

3Accenture Strategy, Ecosystems: The Cornerstone of Future Growth, 2018.

4Accenture, Meet the New Brand of CMO, 2019.

5Sarah Vizard, "How Coca-Cola, Lego and Gillette Tapped into the Wisdom of Crowds," MarketingWeek, February 13, 2019.

6Martin Schreier et al. "Crowdsourced Products Sell Better When They’re Marketed That Way," HBR, November 8, 2016.

7Accenture Strategy, The Bottom Line on Trust, 2018.

Till Dudler

Managing Director – Accenture Strategy, Consumers Goods & Services


Samuel Holmes

Senior Manager – Accenture Strategy​

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