Consumer

Global industry agenda


The consumer industry is facing a wave of disruption and companies must reinvent themselves.

This disruption is due to consumer preference changes, a new generation of digitally savvy competitors and new opportunities created by ever-increasing data and insights. To reinvent themselves and shift from disrupted to disruptor, companies must offer superior experiences, harness relevant information to drive actions and radically improve operational agility.

Disruptive forces

Powerful global forces, outside the control of any one company, are compelling rapid change for consumers, retailers, CPGs and their ecosystems.


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52% of US consumers are projected to make purchases in 2018 using voice-activated technologies 1

In 2016, global sales of private consumer products brands grew at 2%, while top brands declined by 0.6% 2

68% of consumers are willing to pay more for food and beverages that don’t contain ingredients they perceive as bad for them 3

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Amazon's market value is roughly 60% of the rest of the US retail sector 4

Companies with annual sales of less than USD one billion are outperforming larger competitors in 18 out of 25 consumer products categories 5

Since 2007, US consumers have shifted roughly USD 100 billion in annual discretionary spending from goods to services 6

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90% of the data in the world today has been created in the last two years 7

Nearly 80% of enterprises have little visibility into their unstructured data, let alone the ability to manage it 8

There will be an estimated 20-30 billion smart devices in use by 2020 9

Digital technologies

New forms of digital technology are redefining
consumer industry possibilities


AI icon

Artificial intelligence

AI icon

Artificial intelligence

  • Serves as an engine for learning and personalization
  • Acts on business-critical operational improvements

Mobile icon

Mobile and voice

Moble icon

Mobile and voice

  • Becomes the primary interaction channel
  • Connects customers and associates with “in-the-moment” insights

API icon

Augmented and
virtual reality

API icon

Augmented and virtual reality

  • Enables new consumer experiences through
    digital interaction

Cloud icon

Cloud

Cloud icon

Cloud

  • Enables a break from legacy technology constraints
  • Delivers cost-effective innovation quickly

Blockchain icon

Blockchain

Blockchain icon

Blockchain

  • Enables transformational business model innovation
  • Improves data security and transparency for ethical business practices

IoT icon

Internet of Things

IoT icon

Internet of Things

  • Equips physical assets with digital data
  • Optimizes existing operational processes

Emerging consequences

Each manifestation of disruptive forces has the ability to
shape a new future, and affect the customer, the enterprise
and the market.


Number 1 graphic

Customer impacts

Buying behavior has changed; shopping has splintered into micro-moments and store/brand preference has fragmented

Buying behavior has changed; shopping has splintered into micro-moments and store/brand preference has fragmented


  • US retail store traffic has declined by roughly one-third in the past five years; traffic to subscription sites has grown more than 800% over the last three years 10 11

Number 3 graphic

Enterprise impacts

Evolving consumer behavior is driving changes in customer engagement, supply chain, stores and operations

Evolving consumer behavior is driving changes in customer engagement, supply chain, stores and operations


  • Only 37% of retailers worldwide offer “Click and Collect” service, and 60% allow shoppers to shop online and return in-store 16

  • Beauty and personal care subscription services reached an estimated USD 1.5 billion, and online meal-kit providers reached an estimated USD 2.7 billion in sales 17
Number 5 graphic

Market impacts

Companies are using M&A and partnerships to speed their digital transformation

Companies are using M&A and partnerships to speed their digital transformation


  • 63% of global consumer products CxOs believe they will continue to expand their network of partners 22

  • Walmart has acquired numerous eCommerce startups, while Alibaba has made investments in major grocery stores, department stores and electronic retailers, and has begun to open Hema grocery stores in China 23 24

  • Amazon has acquired Whole Foods and is also opening bookstores, Amazon Go c-stores and pop-up stores across the US 25 26
Number 2 graphic

Moments that matter happen across touchpoints, not in siloed paths to purchase

Moments that matter happen across touchpoints, not in siloed paths to purchase


  • 65% of C-suite executives expect more emphasis on customer experience than products over the next few years 12

  • Having four touchpoints across four channels yields 256 possibilities for paths to purchase in a customer journey 13

Number 4 graphic

Companies are having to disrupt themselves or face a competitor doing it for them

Companies are having to disrupt themselves or face a competitor doing it for them


  • 68% of consumer products CxOs say that the biggest disruption is coming from innovative industry incumbents, while only 25% are more concerned about new competition 18

  • Retailers and consumer products companies are setting up innovation labs and embracing partnership with startups to build capabilities and accelerate innovation; for example, Walmart’s Store No. 8, NikeLab, Unilever Foundry and P&G Connect 19
Number 6 graphic

The emergence of industry platforms and solutions that enable inter-company collaboration

The emergence of industry platforms and solutions that enable inter-company collaboration


  • 70% of global consumer industry executives expect to have a blockchain platform in place in three years; however, 60% feel they have insufficient skills to get there 27

Number 2 graphic

Consumers demand full transparency from their stores and brands

Consumers demand full transparency from their stores and brands


  • 94% of US consumers say they are likely to be more loyal to a brand that offers complete transparency; 73% would be willing to pay more 14

  • 90% of global consumers would switch brands to one that is associated with a good cause, given similar price or quality 15

Number 4 graphic

A greater need for insights and analytics and the ability to harness them to drive actions

A greater need for insights and analytics and the ability to harness them to drive actions


  • By 2025, global data that is subject to analysis will grow by 50 times; more than 25% will be created in real-time 20

  • 60% of decision-makers are not very confident in their data and analytics insights 21

Number 6 graphic

The accelerating pace of change increases the penalty for falling behind

The accelerating pace of change increases the penalty for falling behind


  • 2017 saw a record number of store closures in the US, with major retailers announcing nearly 7,000 closures 28

  • In the first few weeks of 2018, an additional 1,500 closures were announced 29

Pressing challenges

Acknowledge and act upon industry challenges
in the near term to stay competitive.


Build ongoing consumer engagement through compelling offerings and superior experiences

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Build ongoing consumer engagement through compelling offerings and superior experiences


  • Brands need to understand consumers in context and be able to take appropriate actions in the moment

  • Digital and in-store experiences must add value to consumers’ lives

  • Insights will enhance the value proposition and support the creation of new offerings and business models

  • The ability to quantify the impact of engagement efforts will be required

Leverage data and analytics as an advantage, and work with partners to harness information and drive actions

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Leverage data and analytics as an advantage, and work with partners to harness information and drive actions


  • Winners will exploit information about consumers, the market and their own operations

  • The ability to gather, ingest and analyze new information, such as external and dark data, is critical

  • Analytics will drive actions across the enterprise and by partners

  • Industrywide platforms and solutions will be required to meet emerging expectations

Radically reduce costs and increase operational agility by embracing AI, automation and XaaS across the enterprise

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Radically reduce costs and increase operational agility by embracing AI, automation and XaaS across the enterprise


  • Existing models are saddled with high fixed costs and rigid infrastructure

  • AI and machine learning are needed to synthesize large data sets and provide actionable insights

  • Automation and robotics are set to become pervasive across the organization

  • “Nextgen” technologies, such as IoT and blockchain, are becoming mainstream parts of the infrastructure

Transformational opportunities

Technology-enabled opportunities empower your organization to address pressing challenges and compete in the marketplace.


Operationalize customer centricity and digitally reinvent the business

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Operationalize customer centricity and digitally reinvent the business


  • Leverage data and insights to deliver individualized experiences at scale

  • Go beyond traditional buy/sell models, and use consumer engagement as the driving force for strategy and operations

  • Ensure organizational structure and KPI alignment

  • Leverage innovation labs and partners to create new business and operating models

Improve operational effectiveness and agility by embracing new practices, operating models and technologies

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Improve operational effectiveness and agility by embracing new practices, operating models and technologies


  • Streamline business processes by embracing enterprise AI and automation

  • Develop data-driven, flexible supply chain models to match supply with demand at the local level

  • Drive agility and flexibility through XaaS-enabled operations

  • Embed innovation practices to enable continuous evolution

Increase inter-company operability through the use of ecosystem partners and industry platforms

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Increase inter-company operability through the use of ecosystem partners and industry platforms


  • Build “trusted networks” through shared visibility and transparency; use partners to rapidly scale capabilities and extend expertise

  • Adopt standards-based industry-wide solutions to extend operations

  • Expand the ecosystem to include non-traditional partners; shift capital to increase efforts in R&D

Start here to assess your readiness for
the future

Critical question 1

Operationalize
customer centricity

  • How are you harnessing the vast amount of data already sitting within your business and beyond?
  • How will you use insights to deliver individualized experiences at scale?
  • Will you differentiate using consumer engagement as a driving force within your strategy?

Critical question 2

Improve operational effectiveness and agility

  • How are you embracing new technologies, such as AI and robotic process automation, to streamline your business processes?
  • How do you ensure your supply chain model matches your demand at the local level?
  • How do you improve agility and flexibility in your operations?

Critical question 3

Increase inter-company operability

  • How do you rapidly scale capabilities and extend expertise?
  • How do you provide and improve visibility and transparency across your partner network?
  • Are you properly prepared in R&D for the rapid pace of innovation?

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