Extract value from consumer data
As my daily conversations with customers are highlighted, consumer product companies have made huge investments in digital capabilities and data in recent years. And for good reason — according to ForbesAnalytics and digital investments could be worth nearly US$500 billion for consumer packaged goods (CPG) companies by 2023. This puts them ahead of several industries. different in the ability to capture and monetize consumer information.
As far as possible. But now they face the next crucial step, which will likely be much more difficult: determining how to monetize all that information, while also navigating the evolving retail and consumer interaction model. be more digital than ever.
Consumer market companies are not alone in facing challenges around data. Like the recent PwC book Beyond digital points out, winning in any industry today requires more than digitization. It also requires using the data companies collect to compete in new ways. That means it’s imperative that they acquire or develop the tools and skills necessary to coordinate and interrogate large amounts of data to make smarter, faster decisions that create more value. and improve the consumer experience.
Even more than other industries, consumer market companies use customer information to an effect that increases risk significantly — because Survey around global consumer insights (launched June 14) confirmed. Of the more than 9,000 people interviewed in 25 territories, 58% said that protecting their personal data greatly affects their trust in a brand. And 54% are only willing to share their data when companies have clear data privacy policies. Privacy considerations may also be more important in some areas. For example, the EU’s General Data Protection Regulation (GDPR) has made European consumers generally more data-conscious than their US counterparts.
Consumer product companies have made huge investments in digital and data capabilities in recent years. Now they face the hard part: determining how to monetize all that information.
The implication is clear? When consumer market companies begin to turn customer data into business value, they need to do so very carefully. In particular, they must ensure compliance with current stringent data privacy regulations and operate robust data management processes.
Why retailers are off to a good start
As retailers and consumer goods players embark on this journey, they face very different paths. First, consider the retailer. In the race to harness digital insights, they have clear advantages. Why? Because they are filled with data, generated and collected through their ongoing direct interaction with consumers — including through loyalty programs — and their close supervision. for product lines.
As a result, they have a huge data source rich with customer insights. While developing use cases to generate more value from this asset, they can simultaneously pursue three goals:
• Improve and personalize the experience for customers, by anticipating their needs, providing them with the right product at the right time through the right mix of services and channels, and tailoring operations Invisibly end-to-end purchasing process according to their individual requirements.
• Make omnichannel digital retail operations more efficient — both internally and across the ecosystem — through closer data-enabled collaboration.
• Sell data insights externally to turn their data lake from cost to profit center.
Several large retailers I’ve worked with recently are doing all three of these things, to varying degrees of maturity. How? They are mobilizing their people and technology to build a business model that leverages data internally and also provides data insights to the outside world. As a result, these companies will securely provide data services to other companies, including startups, creating greater value both for themselves and for others in the industry. their ecosystem.
Commodity consumers catch up
Next, consider businesses dealing in consumer goods. The ability to turn data into actionable insights is a prime factor for the success of these organizations as well as for retailers. However, these companies are already one step removed from the end customer and have less visibility into consumer behavior, preferences, and transactions. This leaves consumer goods players more exposed to market disruptions and risks not detecting the subtle early signs of a major shift in consumer preferences.
Many brands are creating direct-to-consumer strategies or setting up several retail stores. But I believe most will need to join the retailers’ data ecosystem to get the additional insights they need, develop a tightly integrated supply chain, and meet consumer expectations. consumption in terms of transparency and traceability.
Message? Today, every business needs to go beyond digital. But the challenges of doing so can vary considerably, even within the same industry. So ask yourself: where? your Enterprise starting from the task of turning data into value? And do you have the right capabilities to collect, disinfect, and secure the data you have, to create use cases that will power new business models? If not, it’s time to up your game around data and people, and beyond the digital realm before your competitors do.
- Sabine Durand-Hayes PwC is the global leader in the global consumer markets sector. She is a partner of PwC France.