All these factors mean CG leaders must transform. And new research from Salesforce shows they are doing just that. This new report is based on a double-blind survey conducted in February 2019 of 500 CG leaders worldwide. Survey respondents are from North America, Asia-Pacific, and Europe. Here are some of highlights of research titled ‘Consumer Goods and the Battle for B2B and B2C Relationships’: The research also identified the following technologies as trends that will impact how consumers will connect with products including: 1. e-commerce; 2. on-line marketplace; 3. the Internet of Things; 4. voice assistants; 5. artificial intelligence (AI); 6. last-mile delivery; 7. subscription models; and 8. blockchain. To better understand the CG research, I asked two retail and consumer goods experts, Sunil Rao and Heike Young of Salesforce, to highlight the key findings and recommendations. As the global head for consumer goods go-to-market at Salesforce, Sunil Rao is responsible for defining and driving transformational and disruptive solutions in the CG vertical. Working closely with marketing, sales, and product, Sunil’s team directly engages in strategic account support, advises CxOs, provides industry expertise, and guides the creation of industry-focused solutions and products. Heike Young researches and writes about trends in retail, consumer goods, and the customer experience for Salesforce. For two years, she hosted and produced Salesforce’s award-winning digital marketing podcast: The Marketing Cloudcast. Before joining Salesforce, she was an editor of bestselling nonfiction books and managed social strategy and content for B2C brands. Heike’s work has been featured in USA Today, Forbes, AdWeek, Wall Street Journal, and Business Insider. Based on that research, we discovered CG leaders are transforming their businesses for the future through three strategic investments:
Investing in direct-to-consumer sales
CG leaders are singing in unison on this: 99% of them plan on investing in direct-to-consumer sales efforts. Why? For starters, there’s a huge financial incentive. Nielsen reports that despite online sales comprising only 5% of the total US fast-moving consumer goods (FMCG) market, those online sales account for 40% of the growth. A slew of FMCG categories have seen ecommerce growth rates crush brick and mortar, including pet care, grocery, and beauty. Another reason to go direct to consumer (D2C) is better customer experiences. One innovative example is Burt’s Bees, which began piloting an ecommerce site in 2018. Its site includes compelling digital-only experiences that traditional retailers can’t offer, like limited-time sample boxes and lip shade finders.
Investing in customer service
Consumer goods brands have discovered service investments are simultaneously an investment in customer loyalty. A whopping 82% of CG leaders are planning on increasing investments in digital customer service within the next three years. Back in the day, customer service operations were siloed in call centers. Today, leading brands have taken a personalized approach to customer service. While phone calls are still a common method of customer service, CG leaders rated customer service via live chat (48%) and customer service via email (46%) as two of the most effective three ways to communicate with consumers. Improving customer service should be at the top of every brand’s to-do list, as consumers’ expectations for service grow. In a mystery shopping study of 70 brick-and-mortar stores, researchers found examples of modern customer services that blow the traditional help desk out of the water. For example, an Adidas store offered custom jersey printing. A Nordstrom Men’s store featured a 24-hour self-service return kiosk. With in-store service experiences like these to compete with, the old-fashioned and impersonal call center won’t cut it.
Investing in data
The future of CG belongs to brands who can own, manage, and effectively use data. Unfortunately, for many CG brands, accessing and deploying data is a challenge. Less than half (43%) of CG leaders are completely satisfied with their ability to leverage customer insights from traditional retailers. And more than half (55%) of CG leaders perceive barriers in turning the customer data they own into insights – with 54% reporting siloed departments that make collaboration difficult. The data gap has become a gaping hole in certain CG organizations. That’s probably why 82% of CG leaders plan to increase investments in first-party data over the next three years. Within five years, 34% say AI will emerge as a key transformer in connecting shoppers with products, and 22% say it will do that in just two years. What might that AI-powered future look like in CG? From automating the supply chain to providing global, around-the-clock customer service via chatbots, AI has the potential to give CG leaders intelligence where they previously lacked insight. A 2018 Salesforce study of nearly 900 retail and CG marketers found that only 25% leverage AI today – with another 45% planning to leverage it in the next two years. Data is the bedrock of AI efforts that can build personalization, convenience, and automation capabilities at CG companies. Accordingly, CG leaders are prioritizing data accessibility. Consumer goods companies have three clear opportunities to upgrade their resources to create a stronger business for the future. Direct-to-consumer sales, customer service, and data will power the next decade for CG leaders. This article was co-authored by Sunil Rao, global head of Consumer Goods at Salesforce, and Heike Young, retail, consumer goods, and customer experience researcher at Salesforce.
