July 29, 2016 | Written by: Jake Harkins
Just over a month ago, I attended the 60th Annual Consumer Goods Forum (CGF) Global Summit in Cape Town, South Africa. The Forum brought together leaders from all over the world representing top consumer goods manufacturers, retailers, service providers, and industry organizations.
During the course of our time in Cape Town, we learned much about three trends that are top of mind on the “CEO Agenda”:
Disruption is changing the game for consumer facing industries.
New technology, volatile commodity prices, and changing consumer behavior are a few of the disruptors that are challenging established business models for retailers and consumer goods manufacturers. New technologies are changing the dynamics between retailers and manufacturers, as manufacturers are increasing ownership of the consumer relationship through direct-to-consumer commerce. 3-D Printing, Artificial Intelligence, and the Internet of Things are evolving the way companies innovate and interact with consumers. To keep pace, consumer facing companies most adopt and master these capabilities.
Speaking of disruptors… Did you know that 95% of consumer products executives believe that cognitive computing will be a disruptive force in the industry? If you’re curious about what cognitive means for our industry, take a look at this study.
Emerging markets present great opportunity and challenges
With health and affluence improving in many emerging nations, consumption of packaged goods is likely to increase significantly, presenting great opportunity for the consumer goods industry. Brands and retailers must adapt their methods of engagement to meet the local preferences. In many emerging markets, Mobile is the preferred method of engagement for the consumer. Consumer goods manufacturers and retailers must have the right tools in place to learn more about their consumers through this channel. Kate Sayre of Facebook said, “Mobile is not just new technology, it’s new consumer behavior”.
Transparency and social responsibility are now table stakes
Sustainability and responsibility are more important than ever to consumers. People want to know where their goods are coming from, who is producing them, and how goods impact their own health and environment. This means greater transparency throughout the supply chain and more readily available product information at the consumers’ fingertips. To put it in the words of Campbell Soup Company, Denise Morrison, “Transparency breads consumer trust; we must earn that every day.”
Good practice in social responsibility was front and center at this year’s global summit. Tesco CEO, Dave Lewis committed the company to zero food waste throughout the entire value chain by 2017. Extremely relevant considering that 1/3 of all food production is lost or wasted. Ensuring that consumers trust the brand and remain loyal is a top priority for industry executives.
The dialogue presented at the CGF confirmed rising trends that IBM has seen in the consumer products industry. Earlier this year, Trevor Davis of IBM explored similar trends from the floor of the National Retail Federation BIG Show and discussed a few additional trends.