To excel in the consumer goods sector, adopt a customer-first approach.

CIO perspectives: leading technological change in consumer goods

October 16, 2023

In the dynamic consumer goods landscape, there's one compass that differentiates winning players: they delight their customers again and again. This depends on understanding their desires and needs and shaping your strategies around their journey. The consumer goods industry has always been at the intersection of product innovation and consumer preferences – and it's essential for Chief Information Officers (CIOs) to understand the disruptive forces affecting consumers today and make strategic decisions to stay ahead of the curve.

The consumer goods industry faces tough challenges due to inflation, interest rates, supply chain issues, and market volatility. In addition, despite tighter budgets, consumers expect high quality, variety, and personalized service. They seek a seamlessly positive shopping experiences across all touchpoints with your brand and want to feel good about sustainability in their purchasing decisions. And while consumers enjoy omnichannel experiences, they want to know their personal data remains safe at all times.

Consumer goods companies may be among the most advanced in adopting a customer-centric approach. But as we stand on the cusp of unprecedented technological and data-driven disruption, there’s so much more to be unearthedcreated. Here's what we believe will catalyse this disruption and open doors to new opportunities:

With the proliferation of IoT and direct interactions with consumers, there's an explosion of accessible customer data, both direct and indirect. This boom presents both opportunities and potential legal complications in sourcing and processing. Consumer goods firms can now gain insights from first-party data rather than relying solely on partner, but they must also take full responsibility for that data’s safety and the final value created for each consumer who shares it.

Extracting value from the sheer volume of data requires new, robust analytical tools. Enter artificial intelligence (AI). Its ability to dissect, classify, and find hidden relationships in this data can be used to generate deep, actionable insights. These enable to craft enhanced customer experiences, spawn new business avenues, and recalibrate routes to market – all while operating swiftly and at scale.

These insights are no longer limited to enabling marketing and sales. Their democratisation paves the way for even greater innovation and efficiency across the entire value chain, enriching R&D, manufacturing, supply chain, HR and finance as well as marketing and sales. Deeper insights leading to stronger customer value propositions and faster journey from concept to product launch.

For CIOs, the call to action is clear. To lead the ongoing evolution of customer centricity, you should focus on three key areas:

This involves laying down a coherent strategy for Data & AI, coupled with precise governance to ensure seamless and compliant operations. Thereby ensuring data from different sources works together and can be rapidly accessed where it is needed by those who are authorized to do so. This must address also the challenge to bring efficiencies and payback for the massive and increasing data processing cost, right balance for in-or-out sourcing data management as well as creation and maintenance of mission critical front-line applications.

The goal is to weave consumer data, AI, and insights directly into the daily business fabric, ensuring every process is informed and optimised by them.

Ensure decision support systems are designed to bring the most relevant and actionable data analytics driven insights to the decision makers at the right time. Earn credibility by ensuring reliable quality of the insights shared and the data that supports such insights.

By introducing game-changing digital solutions, CIOs can unlock new customer experiences, amplify engagement, and steer the organisation toward sustained and profitable growth.

CIOs in the consumer goods industry operate in a complex environment. They are tasked with managing rising input costs and streamlining services. At the same time, they must secure and strengthen consumer loyalty against the backdrop of numerous macroeconomic issues. To meet these challenges, many CIOs need to realign their strategies.

Not all customers are alike

Driving a digital-first, customer-centric shift across business models, delivery, and operations, can elevate customer trust and forge new business opportunities by delivering a smooth customer journey. Key to this is deep customer understanding, leveraging analytics, AI, and behavioural insights for tailored experiences. Breaking down data silos, for example, enhances efficiency and boosts sales through personalised recommendations.

Companies should view their customers not just as consumers, but as individuals with unique needs, aspirations and potential willingness to share their information to be engaged in brands, products and services developments. Then they can deliver services and experiences that truly matter to their customers. Getting a comprehensive 360-degree view of customers can be achieved by overcoming the hurdles of outdated systems and compartmentalised operations, so that multiple departments can seamlessly access sales data. Additionally, this allows sales teams to enjoy enhanced continuity with consolidated customer information.

The goal: long-term growth

Lastly, sustainable long-term growth is paramount. By designing adaptable customer experiences, operational frameworks, and a holistic 360-degree approach, businesses can increase customer loyalty, minimise attrition, and boost revenue and market share. Furthermore, consumers are becoming more eco-conscious, driving demand for sustainable and ethically produced goods. Implementing technology to trace product origins, manage waste, and monitor sustainable practices can give companies a competitive edge. CIOs will play a crucial role in selecting and integrating these technologies.

Summary

The consumer goods industry is at a pivotal point, shaped by technological advancements and shifting consumer expectations. As a CIO, your role isn't just about maintaining the IT status quo but leading the charge in leveraging disruptive forces for growth and innovation. Embracing these changes, while challenging, can position your company at the forefront of the next consumer-driven era.

“Technological innovation is pushing the consumer goods industry towards even greater customer focus. CIOs are at the forefront, guiding the direction.”

Maciej PrzybyszDirector, Retail & Consumer Markets Consulting

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