It’s stunning how much can change can happen in just one year. From the rise of voice-activated digital assistants, to the advent of online data privacy legislation, to the well-documented struggles of retail, the rules that govern the consumer products industry have seemingly been upended.
Amid all this turmoil, consumer products companies of all sizes continue to look to digital transformation to provide the strongest foundation for the future. As a 2018 Oxford Economics executive study points out, “digital transformation promises to change the competitive landscape for small and midsize companies, allowing them to enter new markets and challenge larger companies more effectively.” Benefits of this shift in focus include “the development of new products and services, the effectiveness of various parts of the business, and overall business performance.”
A new year, a new edge
In the past, growing businesses generally tried to emulate what their larger rivals were doing. But in an interesting reversal, larger companies are reacting to the success of their smaller contenders – more so now than ever before.
But what gives midsize businesses this distinct edge over their larger competitors has less to do with quirky branding or product quality than you might think. Instead, the edge comes from the comparative ease with which growing companies can strategically pivot their operations and respond to demand shifts and volatile market dynamics while keeping consumers at the center of everything they do.
The ability to establish and maintain a deep relationship with a specific set of consumers is a powerful foundation for just about any business. Larger companies are trying to balance individual consumer needs with executing at an ever-expanding scale. This is where midsize companies equipped with meaningful data-driven insight can shine: segmenting and targeting consumers based on well-understood needs. It’s this type of approach that makes sense in a consumer products marketplace that is transitioning from selling products to delivering specific outcomes and experiences.
Take, for example, the number of large companies that are trying to crack the code on direct-to-consumer models. Companies, such as the rising startup in personal care Harry’s, are simplifying and optimizing their processes while connecting every touchpoint of its disparate data sources. With the help of a centralized core of business information, they can match inventory levels to demand with swift responsiveness and agility, while ensuring their cost models remain profitable.
The right digital foundation magnifies the opportunities ahead
Brands that understand these opportunities are adopting newer, bolder, and game-winning strategies. They are executing along the continuum from pure e-commerce to and brick-and-mortar, continually gaining increased consumer insight to pursue new innovations and opportunities. And these brands will continue to adapt and improve consumer engagement, as they further explore emerging technologies such as augmented reality and machine learning.
But it all starts with the right digital foundation. One thing successful midsize companies are learning is that the right technology investments can serve as building blocks for long-term growth and market leadership.
Explore how your growing company can prepare for 2019 with strong technology to continually improve operations, processes, and products, and services. Read the Oxford Economic executive study, “The Transformation Imperative for Small and Midsize Companies.” And take a look at “The Transformation Imperative for Small and Midsize Consumer Products Firms” for industry-specific insights.