It’s 2021—do you know where your customers are? Better yet, do you know how to anticipate their needs over the next quarter, or even the next year?
We are experiencing what, to some, looks like uncertainty and upheaval in the consumer goods market. The way people are shopping is changing, and both brick and mortar and online retailers are facing unknowns as things seem to be in a constant state of flux.
While the market may look volatile, for those who are prepared there is actually an amazing opportunity (especially for small-to-medium sized businesses) to outpace the competition and influence their destiny by adopting three simple strategies. They include adopting new technologies, using that tech to remain nimble, and finding tech that can help you use your data efficiently.
In this article we’re going to give you those three strategies, show you more about what’s happening in the industry, and tell you about how some other consumer goods companies are using these strategies to anticipate their customers’ needs and take advantage of the current market conditions.
Let’s get started!
Let’s start by talking about change and what it’s going to mean to your organization.
For many small and medium sized organizations, change often comes from digital transformation. We can describe what we mean by “change” in this particular instance by telling you that this means implementing any digital tools that will help you to better understand your business and your customers. You should really understand the immediate importance of this need for change.
According to this article by McKinsey, small brands currently make up almost a third of the consumer goods market. Larger businesses are still relying on older operating models and this presents an opportunity for those smaller brands to outpace the bigger ones. From the article:
“While the large online providers recorded growth of 34 percent in the past six years, conventional companies barely grew 0.4 percent. It is the industry’s small outfits that benefit most from the digital marketing and distribution channels, accounting for over half of growth.”
So what is it that these smaller organizations are doing that is different? Again from the article:
“Future-oriented, consumer-centric manufacturers or retailers run digital and agile operations at all levels: they focus on customer data, use advanced analytics to make faster and better decisions, and win and retain digital talent. In their internal organization, they use agile methods to react quickly to changing requirements and to pick up on trends early on.”
What is really interesting here is that 60 percent of CEOs that McKinsey surveyed for another study noted that they plan to implement change in their organizations “within the next few years.”
We can, then, say with a high degree of confidence that those who adapt early on in the game are going to be ahead of the curve and way ahead of the game.
We should note here that it’s not just retailers in the consumer goods industry that are changing. The entire chain is in a state of advanced evolution as we speak. This article by Dr Amanda Williams talks about how “reduced barriers to entry for manufacturing, and availability of stock packaging have made it easier for agile upstarts to launch competing products quickly.”
Which is to say that those who are able to spot trends, seize opportunities, and move quickly are going to differentiate themselves and build a strong competitive advantage.
Recently, James Quincey, CEO of a little company you may have heard of called Coca-Cola, took on the topic of digital transformation in this article. From that article:
“The digital question gets oversimplified into ‘what percentage of your sales are e-commerce,’ but that tremendously oversimplifies how fundamentally digital will transform everything around us… Digital now impacts every single aspect of a business, from the supply chain to customer service. For digitally transformed businesses, Quincey continues, “Digital stops being a thing to measure, because it is the business. Digital success now becomes business success.”
We know that change is coming. In fact, we know that the only consistent thing in this or any other area of our lives is change. If we think about change as transformational to our entire business, it gives us the opportunity to make better decisions based on better data.
With your decision to embrace change and transform your business digitally comes the ability to make faster decisions that positively impact your bottom line. You’re now collecting reams of data, but it’s difficult to make sense of that data.
This is where you’re going to use your new-found digital freedom to stay nimble and react quickly to market trends.
The same McKinsey article from above recommends that businesses adopt an agile philosophy that gives them the opportunity to be proactive in their purchasing, packaging, and selling behaviors. In the past, we have seen research, analysis, and planning cycles that take months. And when it’s all said and done, there can be a vast difference between the planned outcome and what’s really going on with customers and the market.
Employing agile methodologies allows businesses to “cushion the reality shock,” as the article describes. It goes on to note how “ideas are developed, reviewed, and continually improved. As a consequence, the goal remains the same, but the pathway there can change.”
Sound familiar? It’s the reality for all businesses who don’t have the ability to change as quickly as the market can. The article uses this example of what’s possible when a business stays on its toes:
“A fashion brand showing signs of weakness decided to restructure its marketing organization. Its redesign took place in agile sprints in which employees from marketing, IT, product management, and creative departments iteratively exchanged ideas and developed and modified concepts. As a result, it was possible to efficiently rework the new operating model and ensure its tight fit with the marketing strategy.”
Staying nimble means being able to fulfill the needs of the market and the customer without sacrificing quality. The businesses that employ these methodologies will need to understand the data that they’re gathering in order to make the right decisions. Which leads us to our next section.
Given the heading above, it seems like this would be a great place for some folksy wisdom. Instead, allow us to just reassure you that what we have described so far does not mean that you are going to have to invest in a team of data scientists. What we recommend here is that you achieve these lofty goals using artificial intelligence.
Data is useless without someone to make sense of that data. You have a particular problem you want to solve, or a hypothesis that states that if you do X then the result will be Y, and you have data that you believe will help with either of those things.
When businesses employ data scientists, they spend nearly half their time making data usable, according to this study. If you are a small-to-medium sized business, it’s likely that you would not be able to hire a team of data scientists to help you make decisions and glean insights from data.
This article from Forbes explains how AI lets smaller businesses make data usable without the same resources as larger companies. The author stresses the importance of the usability of data, and how “true data democratization will happen when AI can enable any business end user to easily apply and change AI models to their specific needs.” From the article:
“Data democratization is a medicine for many corporate ills. But how you deliver that medicine makes all the difference. If the tools you’re going to rely on aren’t built for the people, your democratization efforts will quickly fade away. Help lift employees from the mess of disjointed, dark data, and empower them to do more.”
Some AI business tools are already making it simple for business users to ask relevant questions, get the answers they need to make the right decisions, and make them faster than ever before. Your agile philosophy is now paying off as you have the information you need from your data to predict customer behaviors and user trends.
Heather Black, Senior Director of Marketing at Stradigi AI, in her article in Consumer Goods Technology magazine talks about how small and mid-sized businesses will be able to use the power of AI to react quickly, spot trends, and embrace change to outpace the competition and compete—and in many cases—eclipse larger businesses. She says:
“As a consumer goods company, you have the ability to take this unprecedented industry change and leverage it into an opportunity to innovate and exceed previous standards.”
She cites the example of Seculus, a global watch manufacturer who “was seeking a solution to avoid revenue loss from lack of supply, high overstock and liquidation pricing.” Using artificial intelligence that allowed the business users there to parse their data and to understand their specific problems, Seculus was able to forecast which models would be most popular in a given time frame, enabling them to reduce the amount of unused inventory they had, which reduced the amount of liquidation pricing they would have to employ in order to make room for more stock.
Heather goes on to say:
“Seculus exemplifies how mid-market companies can reap the full benefits of AI enterprise software. Within a few weeks, they were able to build their AI models with over 85% accuracy, using a data team that included only one junior data scientist and a CTO. Evidently, you don’t need headline-worthy investments, large teams, or even coding knowledge to leverage AI for noticeable business improvements.”
With interfaces that are easily understandable to anyone using them, and algorithms built right into the software that answer specific questions, it has become much easier for small-to-medium sized businesses to make those on-the-fly forecasts. With a better understanding of the data, we’re now entering a more democratic way of doing business across the globe, and across all sizes of businesses in many industries.
The solutions to many of the problems businesses face are right at our fingertips. Without a PhD in data science, any previous experience with AI, or giant budgets to build vast teams of data scientists, smaller companies can now use AI to react quickly and take advantage of—instead of being stymied by—what many have come to call “The Great Reopening.”
You have the opportunity to reap the positive benefits of an unpredictable market by using AI tools that are simple and effective. And the best news is that you can get started today.