I attended the current Global Consumer Goods Forum here in Cape Town, where about 800 delegates from around the world came to Africa for the first time in the 60 year history of this consortium to discuss and share experience from both the manufacturer and retailer sides of this industry.
My focus, as an emerging technologies observer, was on how various technologies including IoT, mobile devices and user behaviour are changing this industry sector. Many speakers addressed this issue, covering different aspects. Mark Curtis, Co-Founder of Fjord (Design/Innovation group of Accenture) opened the sessions with an interesting and thought-provoking presentation on how brands (and associated firms) will have to adapt in this time of exponential change.
Re-introducing concepts such as ‘wearables’ and ‘nearables’ – as devices and the network moves ever more proximate to ourselves – Mark pointed out that the space for branding is ever shrinking. (Exactly how much logo space is available on a smart watch??) In addition, as so many functions and interactions today in the digital age are becoming atomized and simplified, the very concept of a branded experience is changing remarkably.
As the external form factor of many of our digital interactions is becoming sublimated into the very fabric of our lives (and soon, into the fabric of our clothes…) the external ‘brand’ that you could touch and see is disappearing or becoming commoditized. Even in the world of smartphones the ecosystem is rapidly changing: the notion of separate apps (which have some brand recognition attached) for disparate functions will soon disappear. Although the respective manufacturers may not love to hear this, the notion of whether the phone is Apple or Samsung will in the end not be as important as the functionality that these devices enable.
The user won’t really care whether an app is called Vanilla or Chocolate, but rather that the combination of hardware and software will enable the user to listen to their music, in the order they want, when and where they want. Period. Or to automatically glean info from their IoT-enabled home and present the shopping list when they are in the store.
The experience is what is now requiring branding. Uber, AirBnB, Spotify, Amazon, etc. are all examples of something more than either a product or a service.
Christophe Beck, EVP of EcoLab, explained how the much-hyped “Internet of Things” (IoT) is moving into real and actionable functions. In this case, the large-scale deployment of sensors feeds their real-time analytic processes to provide feedback and control mechanisms to on-site engineers, creating rapid improvements in process control and quality.
The enormously important use of predictive analytics was further underscored by José González-Hurtado of IRI. The power of huge data farms along with today’s massive computational availability can extrapolate meaning and indicators that was economically impossible only a few years ago. Discussions on the food supply chain, including sustainability, transparency, trackability, food safety, health and other factors dominated many of the presentations. The CEO’s of Campbell Soup and Whole Foods covered how their respective firms are leveraging both IoT, analytics (where one gets useful information from BigData) and social networks to integrate more effectively with their customers and provide the level of food information and transparency that most consumers want today regarding their food.
The panel on “Digital Disruptors” was particularly fascinating: Vivienne Ming (Founder of Socos Learning) showed us how AI (Artificial Intelligence, and more importantly Augmented Intelligence) can and will make enormous impacts within the consumer goods spectrum; Michael Fertik (Founder of Reputation.com) shared the impacts of how digital privacy (or the lack thereof…), security and data ownership are changing the way that customers interact with retailers and suppliers; and Kate Sayer (Head of Consumer Goods Strategy for Facebook) discussed the rapidly changing engagement model that consumer goods suppliers must adopt in relating to their customers.
While all of the participants acknowledged that “digital disruption” is here to stay, there is a large and diverse understanding and implementation of this technology throughout the supply chain. My prime take-away is that the manufacture, distribution, sales and consumption of end-user physical goods lags considerably behind that of purely digital goods and services. When questioned privately, many industry leaders accepted that they are playing “catch-up” with their purely digital counterparts.
There are a number of reasons for this, not all of which are within the control of individual manufacturers or retailers: governmental and international regulations are even further behind the curve than commercial entities in terms of rapid and encompassing adoption of digital technology; industrial process control took decades to move from purely human/mechanical control to in-house closed-loop computer control/feedback systems – the switch to a more open IoT framework must be closely balanced with a profound need for security, reliability and accountability.
As we have seen with general information on the internet, accuracy and accountability have taken a far back seat to perceived efficiency, features and ‘wow-factor’. This is ok for salacious news, music and cool new apps that one can always abandon if they don’t deliver what they promise; it’s another thing entirely when your food, drink or clothing doesn’t deliver on the promises made…
Given this, it’s most likely that more rapid adoption of IoT and other forms of ‘disruptive digital technology’ will occur in the retail sector than the manufacturing sector – and this is probably a good thing. But one thing is sure: this genie is way out of the bottle, and our collective lives will never be the same. The process of finding, buying and consuming both virtual and physical goods is changing forever.