Part 7 of the “Digitally Transforming Industries” series
Whenever people talk about shopping experiences that wowed them, there’s an element of surprise, joy, and delight woven throughout the story. To consumers, it doesn’t matter if the product is innovative or has a low price point. What’s important is whether the offering adds value to their emotional and physical needs.
As consumers, brands, and technology continue to be intertwined in 24×7, real-time connections and communications, small and midsize consumer product firms have a unique opportunity to engage people in experiences that resonate with their individual situation in the moment. To do so, brands must capitalize on significant, digitally enabled growth opportunities by shifting their perspective from transactional events to moments of opportunity.
However, according to the IDC industry brief, “Consumer Products: Small and Midsize Consumer Products Firms Are Using Technology to Sharpen Business Practices and Improve Customer Engagement,” approximately 58% of the small and midsize businesses surveyed see more risk than opportunity with the changing competitive environment. The report attributes this finding to the “slightly conservative mindset within this industry.” Firms are still focused on selling products in their traditional model instead of adopting new engagement models that are exciting and compelling to today’s consumers.
The customer experience challenge: Engaging consumers in the moment
Let’s face it: There is no such thing as an “average” consumer. Consumption and engagement patterns are increasingly varied and complex, making it nearly impossible to segment the audience into clear-cut categories. Nowadays, consumers have a “just for me” view as they expect an experience that is personal, relevant, and simple. They don’t want to be influenced; they want to be inspired, guided, and educated.
The rules of the traditional ways of the consumer products industry are no longer viable or sustainable. To gain the attention of billions of shoppers and consumers worldwide, small and midsize firms should shift their focus beyond producing a finished good to providing an experience that resonates with the consumer. Ultimately, consumers reward brands that provide ongoing, relevant engagement. It doesn’t matter how big the company is. What’s important is that every interaction is valuable and important to the consumer.
Dollar Shave Club (DSC) is a prime example of a small and midsize player that is surpassing competitors and amassing incredible consumer attention and loyalty. In 2011, the company emerged as a startup that wanted to remove the frustration and exorbitant time and expenses associated with buying razors. Consumers were immediately won over by the speed, ease, and convenience of shopping with DSC – and they rewarded that experience with first-year sales of $4 million, followed by $19 million in 2013, and $65 million the following year. After six years of disrupting the competition, Unilever decided to purchase DSC for $1 billion, in large part to acquire the customer experience model.
Transforming the consumer products industry to the consumer outcomes industry
In this environment, revenue growth is not achieved by making things incrementally better, but from delivering value exactly where and when consumer or business needs arise. Companies must fundamentally change how they engage with consumers and deliver outcomes based on their moment of need.
Acting in the moment requires the ability to sense and respond to consumer needs and market dynamics by monitoring, analyzing, and adapting to real-time market signals. It means reaching consumers directly and immediately at the point of need through their mobile devices, connected homes and cars, and store shelves. More importantly, it means using that information to deliver outcomes that drive greater economic value and long-term engagement. The key is creating interactions that are deeply personal, timely, and meaningful.
To learn how your business can better prepare for the digital economy, check out IDC’s Industry Brief, sponsored by SAP, “Consumer Products: Small and Midsize Consumer Products Firms Are Using Technology to Sharpen Business Practices and Improve Customer Engagement.” Be sure to check every Tuesday for new installments to our blog series “Digitally Transforming Industries” to explore the various leadership roles in today’s growing small and midsize companies.