In an odd twist (pun intended) in episode 2 of our tale, Miranda’s struggles with a robotics project triggered Aunt Natalie’s memories of a battle for pretzel supremacy, where (let’s be honest), the real winners were the pretzel-munching public. Keep in mind that Aunt Natalie’s story took place in a golden age, well before the Atkins diet and its global war on carbohydrates.
Karl Rossum’s eventual success as Bohemia’s pretzel maven is also an object lesson in the challenges consumer products (CP) companies face when adapting to unpredictable swings in the market. For Karl, part of the answer was increasing production capacity through automation. It’s a smart solution—but in today’s CP market, it’s only a partial one.
Today’s CP leaders need more than scale. They need to reinvent themselves to face the challenges of a new market where consumers have unprecedented power and expect brands to engage with them on an individual level. At the same time, they face volatile costs in raw materials, labor, and shipping along with increasingly unpredictable supply chains. To continue to thrive, CP companies must:
Extending reach with new business models
To succeed in a customer-driven market where traditional brand appeal has limited sway, CP companies must find new ways to generate revenue, such as monetizing content or data, forging innovative partnerships that provide footholds in new markets, and selling excess capacity. In other words, great products alone aren’t enough.
Most importantly, CP companies need to become experts at collecting and understanding consumer data for insight into changing preferences and buying behaviors. Some may even draw an increasing portion of revenue from data-intensive services. And because of the changing role of brick-and-mortar retail, they need to expand their notion of a channel with new models such as direct-to-consumer subscriptions and other flexible fulfillment options such as buy-online/pick-up in-store.
Delivering personalized experiences
In a consumer-centric world, one size definitely doesn’t fit all. In fact, products themselves have taken a back seat to more holistic, highly personalized experiences where brands know their individual customers, understand their buying histories and preferences, and tailor interactions from marketing outreach through service. CP companies need to see around corners to anticipate exactly what their consumers want. This takes data and insight, which means innovative CP companies become great listeners. They take their cues from website traffic, mobile apps, call center interactions, chatbots, social channels, consumer histories, and competitive analysis, to name a few sources. This data is the foundation for the rich, compelling, and personalized experiences that encourage consumer loyalty. It gives CP companies the ability to predict the customer’s needs and automate aspects of the experience to make transactions and service seamless and trouble-free.
Competing as an ecosystem
Traditionally, a CP company’s most strategic partnerships were with its network of suppliers, manufacturers, and retailers. These entities worked together to streamline costs and put products on shelves in the most efficient way possible. In today’s economy, CP companies must rethink their approach to building a partner ecosystem. They still need those traditional partnerships, but they need to collaborate in new ways to generate fresh streams of revenue and deliver personalized consumer experiences. Also, CP companies must forge new alliances to increase the resiliency of their supply chains and address consumer demand for an ongoing, two-way relationship with brands. They need to collaborate with companies that can help them anticipate and understand the evolving expectations of customers and deliver the products and experiences that turn one-time purchasers into lifelong brand champions.
Meeting the demands of this dynamic, quickly evolving industry isn’t easy. At SAP, our goal is to help CP companies run at their best, so they have the insight and agility to thrive in this new market reality. By helping CP companies become intelligent enterprises, we help them capitalize on advanced technologies such as artificial intelligence, machine learning, and the Internet of Things and apply leading-edge industry best practices to act on customer, partner, and employee sentiment—to deliver the products and services customers demand and the engaging experiences they want.
For more on how SAP solutions can help you become an intelligent enterprise with the flexibility and agility to build and sustain leadership in today’s fast-moving CP market, visit inspirethefuture.com/consumer-products. Want to see how close you are to becoming an intelligent enterprise? Take our self-assessment.
SAP and Capgemini:
Partnering to help CP companies become intelligent enterprises
Consumers want direct engagement with brands, and they want it now. That engagement will increasingly be personalized, intelligent – and digital.
In conjunction with SAP, Capgemini is helping consumer products companies master these market shifts and tech-triggered trends. Their team of consumer products experts works with you to make your vision for an intelligent enterprise a reality.