The need to keep—and grow—their customer base is dominating the agendas of consumer and retail executives around the world, according to new research from KPMG International and The Consumer Goods Forum (CGF). Same as it ever was, in a way—but with consumers getting much more sophisticated and focus shifting to the overall experience, retail comms strategies are challenged to keep pace.
Thirty-three percent of the 526 consumer and retail executives responding to the fifth annual Global Consumer Executive Top of Mind survey, Think like a start-up: How to grow in a disruptive market, say that customer trust and loyalty is their top priority for the next two years. Also, nearly three quarters (74 percent) say customer trust and loyalty is “very to critically” important to their short-term success.
These results suggest that many consumer and retail executives leading the largest businesses from around the world lack the capabilities and know-how to attract and keep customers. Thirty-nine percent admit that when it comes to personalizing the customer experience, their companies’ capabilities are poor to fair.
Consumer companies lagging behind customer demands:
“Consumer and retail executives recognize that, in this age of disruption and volatility, customer experience is a primary differentiator and key weapon in the battle for their loyalty,” said Willy Kruh, KPMG’s global chair of Consumer & Retail, in a news release. “Many executives now see that new business models could disrupt them and that, in a marketplace of unparalleled access to information, loyalty is not as strong as it once was. Recognition is one thing, but action is another. To get closer to their customers, consumer and retail companies need to use customer data to not only make them wiser but also to translate it into a better experience. Personalization needs to be founded in deep customer insight.”
“Of the many disruptions in the consumer industry right now, arguably the most fundamental is the impact of Millennials and Generation Z,” said Peter Freedman, managing director of the Consumer Goods Forum, in the release. “This report highlights how established businesses still have a long way to go to meet consumers’ changing needs—for products, channels and relationships—and most particularly, the underlying importance of authenticity and transparency in everything they do. The CGF’s members believe that collaboration has a big role to play in responding to these disruptions.”
What influences consumers most when they are choosing which brand or retailer to buy from:
The majority of the consumer and retail executives responding to the KPMG/CGF survey are looking at technology to improve the customer experience. They are using some of the more familiar technologies such as social media, mobile apps, e-commerce/digital payments, and mobile commerce/wallets. Indeed, the survey respondents report that enhanced customer experience is the primary benefit of their investment in and use of these technology tools.
Looking ahead, the adoption of newer technologies such as artificial intelligence (AI) is still relatively low—only a third of respondents say they will invest in AI over the next two years. However, 41 percent of those who plan to adopt AI say the primary motive will be to improve customer service.
“While some are using or planning to use AI to improve customer service, there is so much more that can be done both in terms of execution and strategy,” said Kruh. “Used in conjunction with customer data, for example, AI can provide deep data and analytics (D&A) capabilities to understand and predict customer preferences, make recommendations and ultimately drive sales.”
Digital leaders have more aggressive plans for adopting new technologies:
However, when it comes to D&A, over a third of the consumer and retail executives responding to the survey say they have relatively low D&A capabilities. But then 62 percent also say D&A will be ‘very to critically’ important to their short-term success (with another 30 percent saying it’s at least moderately important). In addition, D&A capabilities are the top area of investment currently in use by 65 percent of respondents, and expected to be in use of 90 percent by 2019.
“D&A is the cornerstone of success for today’s consumer and retail companies,” Kruh said. “Deep, real-time insights can unlock a company’s ability to earn customer trust and loyalty by enabling them to understand and serve them exactly when, where and how they want. It can fuel and drive agility and efficiency throughout the supply chain—from manufacturing to distribution, and it can inform a dynamic and competitive price and product strategy. Very soon, consumer and retail companies without advanced D&A capabilities will no longer be competitive.”
Now in its fifth year, this annual survey was conducted by telephone and online between March and April of 2017. A total of 526 senior executives from companies headquartered in 31 countries participated in the survey. The respondents were senior executives at global companies from the food, drink or consumer goods, manufacturing and/or retail sectors, with at least US$500 million in annual revenues.