Consumer Products Companies Get Personal In The Digitized Economy

Judy Cubiss and Ginger Shimp

Today’s digital world sees the consumer squarely in charge. In this environment, companies are competing based on the value and experience they deliver for consumers. Consumers today are “always on,” connected digitally to one another and the world around them in real time. They are living longer. They are hyperlocal and, believe it or not, brand loyal. But only to trusted brands. Most importantly to your business, they are the most open to consumption by choice, by culture, and by necessity.

Experts in consumer products all agree that things have never moved faster within the industry. Physical barriers are all but irrelevant. The companies behind even the simplest products must understand consumers better than ever.

Recently, Brian Fanzo and Daniel Newman, co-hosts of the popular S.M.A.C. Talk (Social, Mobile, Analytics, Cloud) Technology Podcast, caught up with EJ Kenney, senior vice president, Consumer Products Industry business unit, SAP, on an episode of “Digital Industries,” a series which examines how digital transformation is affecting 16 different industries.

Kenney shares the example of how diapers have not changed much over the years, but the companies that manufacture diapers, including Proctor and Gamble, now offer diaper subscription services. What’s more, they focus on getting to know mothers better, even before they give birth. Through the subscription service, the diapers they receive change sizes as the infant grows. Kenney says, “These kinds of services are high value to an expecting mother because they help simplify her life.” He points out that, “companies are looking for these new digital disruptions to create profitable growth.”

From “Consumer Products Trends: Navigating 2020,” Deloitte University Press, 2015.

The companies that will succeed in this consumer-driven digital economy are the ones that focus on personalizing consumer experiences to create outcomes that are meaningful. The global audience may be bigger, but the experience must feel unique to each customer.

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Digital transformation: The catalyst for growth

Industry giants and blue-chip legacy operations no longer hold monopolies. Consumer product companies that relied on deals with retailers such Walmart and Target are now being upended by smaller, more agile operations. These digital businesses pick off consumers before they ever step foot into a retail outlet. The Internet is immediate. It has low barriers to entry. It also reduces the need for expensive hardware. Apply the right technology and services, and any consumer products company has a chance to build profitable, trusted relationships with consumers.

Companies do not have to brute force their way into the market over the top of giants with billion dollar budgets. There is no need to overpower market leaders. Modern economic coups come from moving “hearts to carts.” Basically, you create the most convenient, unique experience for a consumer. You immediately differentiate your brand from the noise, and consumers may not even see any of your competition. Kenney observes, “we’ve seen a shift away from relying solely on the product you have towards creating experiences for consumers.”

The (un)usual suspects

“Time has been compressed with digital disruption,” says Kenney. Concepts including IoT and augmented reality have been described as time distortions of a sort; processes that would normally take hours or days to complete may now be accomplished in seconds or minutes. Most important is the role of data in understanding consumers. The sophistication and complexity of the questions that can be answered are increasing all the time. “How are consumers different?” or “What time of day do you all of the sudden say, ‘what’s for dinner tonight?’”

The process that brings technology to customers is also incredibly important. Big Data analysis has turned even the smallest startup marketing department into a potential consulting firm. However, in-house employees need experience to properly interpret the incredible amounts of data that even surface-level digital surveys may invoke.

The possibilities are mind-numbing. Consumer products companies now have the ability to understand the precise buying habits of unique buyer profiles within an audience. Not only does Big Data allow the modern company to pinpoint its audience, but it also allows that company to segment its audience into subcultures that can be expressly targeted depending on season, product, or market conditions.

The future of consumer products

Consumers will be able to quickly demand changes based on their needs in real time, and companies will have the ability to receive this information and respond accordingly. This will require companies to reduce the complexity in their data and processes. Things like batch runs that correspond to the sequential, serial type of approach to business will soon become antiquated. Replacing them will be a more creative, communicative strategy of “always on” interaction that will only improve as the technology for consumer products improves.

Transforming into a truly digital business is so much more than just implementing new technology to meet the demands of a digital age. It’s more than keeping up with the deluge of transformation happening all around us. Digital transformation is about understanding how to harness these changes and incorporate them into your business strategy. It’s about driving agility, connectivity, analytics, and collaboration to run a Live Business. A digital core empowers you with real-time visibility into all mission critical business processes inside your “four walls,” and in your interactions with customers, suppliers, workforce, Big Data, and the Internet of Things.

Listen to this episode of “Digital Industries” for the consumer products industry, co-produced by SAP and S.M.A.C. Talk Technology Podcast.

For more on how SAP can help you drive your own digital transformation in the consumer products industry, visit us online.

1. “Consumer Products Trends: Navigating 2020,” Deloitte University Press, 2015.

Judy Cubiss

About Judy Cubiss

Judy Cubiss is Global Marketing Lead for Industrial Machinery and Components and Automotive at SAP. She has worked in the software industry for over 20 years in a variety of roles, including consulting, product management, solution management, and content marketing in both Europe and the United States.

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.