An incisive new report has found that 61 percent of senior executives in the consumer markets industry have building consumer trust as a core value; and 32 percent say trust is and will be one of their biggest challenges over the next one to two years – second only to expansion and top line growth.
The survey of 539 consumer industry executives from 41 countries, conducted by KPMG and The Consumer Goods Forum (CGF), revealed that the majority of respondents said they have knowledge of consumers’ behaviour, although only one in five had a strong confidence in this knowledge. A further 20 percent could not definitively claim that they have an accurate picture of what items their own customers are buying from their competitors versus themselves.
This third annual Top of Mind survey from KPMG and The CGF focuses on what is top of mind for senior decision makers in the consumer food, drink, goods and retail industry globally.
The report suggests that some segments of the consumer industry lack understanding of the needs of their customers, an issue which could be hampering business growth. In response, businesses are attempting to close this “knowledge gap” by engaging more with customers as a pathway to growth. According to the report, there are two key priorities which companies are focusing on, apart from growth and expansion: an omni-channel customer focus (letting customers shop on their own terms) and winning consumer trust.
The Top of Mind survey found that as well as understanding their customers, businesses need to win their trust and are starting to treat it as a core value. The survey highlighted a number of key trends:
The study highlights how businesses are having less of a transactional relationship with their customers and are competing to win emotional engagement. Respondents are using social media strategies (41 percent) and loyalty/membership programs (31 percent), due to the potential for personalisation and targeted discounting. Behavioural research is starting to influence the way in which companies target their customers; the report highlights that some companies (19 percent) are turning to pre-populated shopping technology, which “remembers” and stores a customer’s favourite items.
To improve the “omni-channel” customer experience, the survey shows that companies must consider shifting their hiring strategies so that their workforce has the skills and experience needed to take radical new steps. This could be expanding into new markets, leveraging omni-channel strategies or adopting new innovative technologies. Over half of the retail respondents said that they offer a seamless shopping experience across channels, and slightly fewer offer the ability to shop from a mobile device – showing there is still a lot of scope for improvement across the sector. Businesses should also invest in research and data analytics so that they can monitor consumer patterns, ideally in real time, and target their behavior accordingly. The report notes that some consumer-facing companies have been quick to use social networks to gather consumer data, which they can use to influence and personalise their marketing.
Peter Freedman, Managing Director of The Consumer Goods Forum, said “The world is changing for consumer-facing businesses. We’d encourage all of our members to invest in fully understanding their customers and their expectations in key areas such as sustainability, health and wellness and food safety. Without this insight, firms will struggle to win loyalty and trust which is essential to remain competitive in the digital age of a two-way dialog between brands and consumers.”
Christo Smith, KPMG Director - Consumer Markets and Technology: “With top-line expansion and growth being this year’s top priority as well as the top challenge, the survey data clearly shows that a new battleground is emerging – how to understand and win over customers. There are some hard choices to be made to build or maintain a competitive advantage. Furthermore, companies must be aware of and proactively address potential disruptors, the optimal time is usually long before you think it’s the optimal time.”
The Consumer Goods Forum (“the CGF”) is a global, parity-based industry network that is driven by its members to encourage the global adoption of practices and standards that serves the consumer goods industry worldwide. It brings together the CEOs and senior management of some 400 retailers, manufacturers, service providers, and other stakeholders across 70 countries, and it reflects the diversity of the industry in geography, size, product category and format. Its member companies have combined sales of EUR 2.5 trillion and directly employ nearly 10 million people, with a further 90 million related jobs estimated along the value chain. It is governed by its Board of Directors, which comprises 50 manufacturer and retailer CEOs.
For more information, please visit: www.theconsumergoodsforum.com