By Clyde Pereira
Informed, empowered, and demanding social-media savvy consumers. They’re here to stay – and no one has been more affected by them than those working in the consumer goods and retail manufacturing industries.
While we often point to the Internet as the underpinning of the empowered consumer evolution, thanks to a number of external factors – such as the increased use of mobile devices, social media, Big Data and the interconnectivity of all of our devices – today we must also look at cloud computing as another major force adding to the “consumer power” phenomenon. But cloud’s new reach doesn’t stop there.
In fact, recent research by IBM indicates that while 16 percent of the global sample of business leaders surveyed were already using cloud capabilities for sweeping innovation (such as entering new lines of business or reshaping an existing industry) within the next three years, 35 percent intend to use it to transform their business models.
To explore this further, The Consumer Goods Forum has collaborated with IBM on a new study that looks at how cloud will drive innovation in the consumer goods space. In conjunction with IBM we presented a preview of the findings at our recent CGF Paris Conference which focused on marketing, IT and supply chain issues, and have now published the full study.
We’ve identified three areas in which cloud is likely to be a key business enabler and potentially disruptive force for the consumer goods industry:
Consumer Centricity: Using cloud, companies will find new ways to personalize engagement with consumers in the context of their specific situation, location, habits and preferences. Engaging consumers in new ways, such as Yoplait’s Sara campaign, delivering highly personalized, contextual offers, exemplified by Safeway’s Just 4 U program, and using advanced analytics to tap consumer insights to drive innovation, are just a few ways cloud can help bolster consumer engagement.
Collaboration: Companies will also use cloud to find new sources of value through collaboration and data sharing. Thanks to cloud, manufacturers such as Frito-Lay have been able to work with their customers on new product development. In this case they went straight to social media to collaborate with customers to find and select the best new flavor ideas.
On the internal collaboration front manufacturers and retailers will also start using cloud-based tools to collaborate internally across functions, organizational and geographic boundaries. Grupo Pão de Açúcar, for example, the largest retailer inSouth America, uses a cloud solution to measure the carbon impact of its retail and supply chain operations.
Business and Operating Model Innovation: Cloud’s most disruptive power lies in its ability to support entirely new business and operating models. Just look at some of the nimble new approaches from companies like mySupermarket, Dollar Shave Club, and others that leverage cloud to gain rapid entry to mature markets and to offer consumers cloud-enabled shopping and product alternatives. More than ever before, the potential now exists for new entrants to offer entirely new value propositions to consumers, or to disrupt existing value chains in unforeseen ways.
Existing industry players can also take advantage of cloud too. Manufacturers and retailers may choose to invent new cloud-enabled products, reach entirely new segments, or radically innovate their operating models – any of which may be enabled by cloud. Retailers in particular are already using the cloud to innovate the shopping experience. Cloud’s ability to connect the shopping experience to external networks and information sources holds the promise to create a multitude of new sources of value for retailers and manufacturers alike.
While there’s no prescribed maturity path for cloud, there’s certainly lots of opportunity ahead. Whether your company chooses to optimize by using cloud to incrementally enhance their customer value propositions; to innovate by improving customer value through cloud to drive new revenue streams; or to rely on cloud to disrupt the game and create radically different value propositions – the time to harness the power of cloud is now!
About the author: Clyde Pereira has worked for Coca-Cola Hellenic for 20 years. During this period, he has led the IT expansion into Eastern Europe from 3 countries into 13 countries. Subsequently, a merger in 2000 created the entity that Coca-Cola Hellenic is today – a company which is present in 28 countries with an expanded portfolio of non-Carbonated Soft Drink and a further 16+ acquisitions of Water, Juice, Vending and Soft Drink companies.