What the Next Phase of Digital Transformation Means for Your Business
A short while back, promoting consumer goods resembled a refined game of lawn tennis, where established competitors dedicated resources to creative endeavors with ample lead times. They adhered to proven models involving TV and big-box retail, collaborating with trusted agency partners. However, the current landscape is more akin to a sprawling mixed martial arts competition. New contenders are entering the arena with unconventional strategies, introducing an unparalleled complexity of channels, content, and partnerships. The dynamics have shifted dramatically, with a significant increase in speed and innovative approaches, creating a challenging environment for established consumer products companies, akin to punches being thrown at them.
Driving the chaos in this battleground is a revolutionary transformation in brand growth models.
Over the course of most executives’ careers, technological advancements have profoundly transformed how consumers interact with brands. In the United States and the United Kingdom, over 60% of consumers now discover products online, and 85% of millennials place more trust in reviews from anonymous individuals than in traditional advertising. These technological strides have not only reshaped consumer behavior but have also brought about a significant shift in the competitive landscape.
Chief Marketing Officers (CMOs) can no longer rely solely on projecting future profit opportunities by expanding into new geographies or adjacent product market segments. Such an approach risks overlooking the disruptive trends within the industry. Profit pools are swiftly transitioning from products to services, experiences, and communities. Mass products are evolving into new segments with a rapid emphasis on personalization.
In today’s landscape, the growth strategy for consumer products companies necessitates a dual perspective: looking “present forward” to enhance existing offerings and capabilities, and simultaneously looking “future back” to anticipate and adapt to emerging trends. This approach involves creating innovation that goes beyond the current product portfolio and business model, resembling the analogy of creating a faster horse while envisioning the eventual advent of the car. The challenge lies in defining new growth platforms that align with evolving consumer preferences and industry dynamics.