The consumer goods industry will have its hands full in 2022. It will be a busy year as brands buttress loyalty, woo the eco-friendly consumer, adjust product portfolios with business sustainability as the goal, and gently move focus to Asian markets which are expected to account for half the global consumption, spelling a $10 trillion in opportunity in the next 10 years.
The battle plan for 2022 will include advanced technology, but a more profound change, in the form of collaboration, is underway to meet the challenges of the coming year.
There are three areas in which consumer goods manufacturers would do well to embrace the potential of collaboration:
Collaboration with Consumers: The cookiecalypse is here. Google is almost ready to kill third-party cookies in Chrome. Apple has its iOS14 privacy updates that require app developers to ask users for permission to collect tracking data and provide information on how that data is used. Plus, a pile of privacy legislation is on the way, making first-party data extremely important and relevant.
With third-party data vanishing, it will not be possible for brands to target consumers accurately. They must now focus on acquiring their own customer data if their marketing campaigns are to be successful. As a consequence, traditional brands, accustomed to collaborating with partners for information on end consumers, will need to find ways to collaborate directly with their end consumers, so they can lay their hands on valuable data and enhance the promise of their brands.
What can brands do that will convince consumers they will get a better experience in exchange for data? Brands like Chewy, which specializes in pet foods, are doing it by providing consumers the opportunity to leave behind product reviews for the pet community. The reviews can be tapped and filtered for customer data, allowing Chewy to target its promotions.
Collaboration across the Supply Chain: The final efficiency-frontier for consumer goods organizations is to sense demand and rapidly reshape their supply chains to deliver products that have a high demand and partner with local suppliers for raw materials and packaging.
In addition, organizations like Nike have shown that leveraging demand-sensing platforms allows them to plan and meet one-to-one consumer demand. Nike says its digital supply chain allows it to meet digital demand on a global scale.
How supply chain partnerships are managed to deliver raw materials and components for just-in-time delivery will be the key to resilience in the future. The coming change is evident. Traditional collaboration with retail partners (to understand demand) will be supplemented with consumer and supplier collaboration.
Collaboration with a Broader Ecosystem: Brands collaborate with a number of partners, from event organizers to technology providers, and gaming/ entertainment platforms. These brands are not advertising but converging with a number of other players within an ecosystem to serve their customers.
These collaborative efforts become a source of customer data. For example, Louis Vuitton designed a carry case for the World Championships trophy of the popular fantasy video game League of Legends and introduced clothing (skins) that players could purchase for their in-game avatars. The event drew 99.6 million unique viewers, offering an opportunity to build first-party data on potential customers. The fashion house had a 47-piece real-world clothing line to go with the event which sold out within hours of launch, demonstrating the ability of online spaces to provide opportunities for new product lines.
We are witnessing a great shift towards collaboration networks and the rewiring of supply chains in the consumer goods industry. In the future, the collaboration will be the grease that will allow these organizations to function smoothly, stay resilient, and grow.