Cloud is the
JOIN THE CONVERSATION
Estimated reading time: 1 minute
Consumer Goods Industry Viewpoints
Until recently, the global retail model had remained largely unchanged for hundreds—if not thousands—of years. The notion of creating a valuable commodity or product, showcasing it in physical premises, and selling it to the consumer is as old as currency itself. But now all that is changing. We’re making, selling, and buying things in entirely new ways, and the lines between supplier, manufacturer, and retailer are blurring.
“I’ve never seen the speed of change as it is today. If I could go back 10 years, I might have done some things earlier.”
Millard ‘Mickey’ Drexler, CEO, J.Crew, The Wall Street Journal (2017)
Groundbreaking new technologies, and agile, cloud-native competitors have given rise to the hyperconnected consumer. These new buyers have unprecedented power, information and choice in the palms of their hands, and as a result, their expectations are higher than ever. But the same technologies that are disrupting Consumer Goods Industry deliver an opportunity to better understand the hyperconnected consumer, and deliver the frictionless, personalized experiences they demand.
To succeed in the new consumer landscape, suppliers, manufacturers, and retailers must be willing to recognize, embrace, and become catalysts for change.
76% of consumer goods executives say competitive advantage will be determined by the strength of their business partners and ecosystems.
Accenture, Insight Tech Vision 2017
Estimated reading time: 5 minutes
The Latest News and Updates
To successfully adjust to a new consumer-packaged-goods landscape and effectively serve the hyperconnected consumer, you’ll need all the facts, figures, and insights you can get. But it’s impossible to read everything. That’s why we’ve hand-picked a selection of links to provide you with the best information and opinions on the hottest topics in consumer markets.
Adapt to data-driven customer expectations.
Discover five data-driven tech trends shaping customer expectations, and learn how businesses can adapt quickly to these crucial influences. From mobile ‘micro-moments’ to the AI-influenced 360-degree customer view, chatbot customer connections, IoT-driven insights, and customer experience cloud suites, find out how data analysis allows for richer customer understanding organization-wide.
Discover Oracle Modern Marketing
Watch an interview with Steve Krause, Group Vice President of Product Management at Oracle Marketing Cloud, and explore how Oracle’s marketing platform brings data insights to the modern marketer. Steve joins John Furrier and Jeff Frick on theCUBE to discuss how Oracle is enabling the concept of modern marketing, and how businesses can build more valuable customer relationships.
Our Connected Age: Imagining the Future, Today
Join Michael Forhez, Global Managing Director for the Consumer Markets Industry Solutions Group at Oracle. As our collective industry evolves, Michael explores key impact trends to watch and the attributes of a modern, successful company in this “connected age".
The latest from Oracle.
Innovation has Never Been More Complex or Rewarding
Why staying ahead increasingly relies on orchestration and collaboration. Ulf Köster, Business Solution Director, Product Value Chain at Oracle EMEA, explains why today products are less important in delivering value to businesses; it’s the service wraps and ancillary revenues that count.
Estimated reading time: 4 minutes
Tripling customer engagement with Oracle Social Cloud
Sapporo, Japan’s largest brewer and the most popular Asian beer in North America, wanted to strengthen and expand its marketing channels across its retail and wholesale businesses through digital and social channels.
Sapporo implemented Oracle Social Cloud and completed the deployment in just two months, achieving engagement rates three times greater than its competitors, and increasing social-driven visitor traffic by 135%
"Our legacy method was static and limited to the current state. Oracle Social Cloud’s social listening and engagement capabilities would allow us to perform strategic analysis for customer interest and sentiment across international websites and social media channels, enabling us to create better campaigns and support business growth,"
Yuichi Mori, Assistant General Manager, Digital Marketing Section, Sapporo Breweries Ltd.
Giving parents the support they need for their baby’s nutrition
Nestlé BabyNes Boosts Marketing Efficiency and Consumer Service, Optimizes Budgets with Cloud Platform.
“From a corporate perspective, we should have used an existing solution. Yet none of those systems was capable of meeting our needs the way that Oracle Service Cloud does, for example concerning the unique customer relationships we develop. Oracle was superior in all key aspects for BabyNes, including flexibility, native features, and integration. Isabelle Simal, International Customer Service Manager, Nestlé BabyNes (Nestlé S.A.)
Sweet vision, sweeter results.
Tony’s Chocolonely is an ethical chocolate company established by Teun van de Keuken—a Dutch investigative reporter who, appalled at the slavery involved in West African cocoa production, decided there was a better way to make chocolate. Hence Tony’s Chocolonely—100% slave-free chocolate.
Tony’s Chocolonely was a medium-sized business exhibiting 50% year-on-year growth. But the company’s supply chain and IT systems weren’t always able to keep up with this rapid expansion.
The business adopted Oracle Planning and Budgeting Cloud Service for a more holistic overview of sales data, allowing them to match supply with demand in every country in which they operate.
“I would definitely recommend co-operation with Oracle, because although they are a multinational, they’re able to work closely with medium-sized companies like ours.” Frits Snel, Sales Manager, Tony’s Chocolonely
Henkel Deploys Oracle to Unify Group-Wide Transportation Operations
Henkel Increases Agility and Reduces Transportation Costs by Unifying Processes and Consolidating Transport Across Business Units on a Single Platform.
“With Oracle Transportation Management, we have a group-wide IT solution that has enabled more efficient management of our transport operations across all business units and countries. It has increased our competitiveness, and will boost customer satisfaction and significantly reduce cost.” Matthias Czaja, Corporate Senior Vice President, Henkel Global Supply Chain B.V. – Beauty Care
Estimated reading time: 5 minutes
Retail Opportunity and the Hyperconnected Consumer
The one trait that sets human beings apart—the trait that allowed us to transform the planet with our societies and our infrastructure—is our remarkable adaptability. This has enabled consumers to embrace groundbreaking new technologies with incredible eagerness. In 1995, less than 1% of the world’s population was internet connected. Today, it’s greater than 40%.
By 2020, it’s predicted that there will be 6.1 billion smartphones in circulation globally. And with the internet of things (IoT) taking off, the total number of connected devices is expected to reach 20-30 billion worldwide in the same timeframe.
The hyperconnected consumer.
Today’s consumers are hyperconnected. The smartphone revolution has put unprecedented power and information in the palms of their hands, and their expectations have grown accordingly. Modern consumers expect mass personalization, speed-of-thought commerce, and a blending of physical and digital retail experiences. If they don’t get what they want, they’ll simply go elsewhere.
The hyperconnected consumer is increasingly fickle, and brand loyalty is diminishing—yet consumers care more about the provenance of what they’re buying, and the sustainability of who’s producing it. The hyperconnected consumer can connect with brands from farm to fork, and expects both transparency and honesty throughout the brand relationship.
Capturing the loyalty of the hyperconnected consumer means delivering the personalized experiences they’ve come to expect. Increasingly, the customer experience—whether pre-shop, shop, or post-shop, is as important as—or perhaps more important than—the product itself.
Hyperconnected consumers—and the new technologies they depend on—are transforming Consumer Goods.
Driving new consumption patterns.
Hyperconnected consumers have an appetite for innovative new consumption patterns—like the as-a-service models pioneered by disruptors such as Netflix, Uber, and Dollar Shave Club—and technology is making such consumption patterns possible. The industry is moving from a ‘product’ supply model to an on-demand ‘service’ model—convenient, personalized, and experiential. It’s no longer seller-dictated, but consumer-defined.
Technology has changed the definition of ownership, delivering instant, disposable gratification. Increasingly, consumers want their products delivered in a way that matches their lifestyle and needs.
CPG at the tipping point: how brands can win in the new routes to market
Transforming the physical store.
Physical stores are closing in their droves, but statistics like the above can be misleading. The stores themselves aren’t necessarily disappearing—merely changing in nature. Where there may have been two dozen ‘mom and pop’ stores a generation ago, there might now be a single superstore capable of delivering a retail experience better aligned to the needs of the modern consumer.
And then there are ‘experiential stores’, where prospective buyers can purchase products in person, or try out new, enriched services. Think of Apple stores—they don’t just serve a traditional retail purpose, but act as a unique opportunity to build stronger brand/customer relationships.
Breaking down the silos between physical and digital.
To deliver the seamless experiences consumers demand, retailers will be expected to go ‘phygital’. That means demolishing the silos between ecommerce and traditional retail models, and better connecting with consumers across every interaction.
To deliver rich, personalized experiences and enable consumer-centric growth, brands need cloud services integrated with social, mobile, and analytic capabilities. They need the power to deliver commerce at the speed of thought, and they need to simplify and optimize their businesses for sustainable, profitable growth.
“In the digital world, it is imperative for CPG companies to create platforms tailored to their products that facilitate consumer engagement with their products and build off the success of what’s happening in the retail and travel industries.”
Deloitte, 2017 Consumer Products Industry Outlook
Estimated reading time: 7 minutes
Digital Technologies: Enabler and Disruptor
Consumer Goods companies are caught in a cycle of constant reinvention and transformation. But innovation for innovation’s sake is no use to anyone. With disruptive new consumption models emerging all the time, suppliers, manufacturers, and retailers must retain perspective and create a technology strategy capable of delivering the relevant experiences consumers expect. To capitalize on the opportunities of digital transformation, industry players must define their purpose, identify new possibilities, and prioritize the opportunities available to them.
Source: IDC FutureScape 2017.
Personalization and customization.
The technology now exists to provide batch-of-one manufacture, delivering 1:1 personalization and meeting consumer expectations in entirely new ways. Thanks to technologies such as 3D printing, the internet of things, blockchain, and the digital thread, manufacturers can now deliver unprecedented scalability, personalization, and order customization. And through distributed manufacturing, businesses can maximize flexibility and minimize expense by reducing shipping costs and related logistical expenses.
Consider this passage on the level of personalization embedded in the latest Apple iPhone:
“Apple’s latest innovations dramatically improve the degree of personalization that can be embedded in products. Things like customized labels, materials, and supporting information services to enhance consumer value propositions can all be more effectively rolled out, used and tracked for iterative innovation.”
Kevin O’Marah, Apple and Personalization: A Digital Bridge to Consumer Products, Forbes (2017)
Demand and supply chain management.
With the internet of things beginning to proliferate, the digital thread now runs through every process, factory, machine, and product. Real-time, sense-and-response, demand and supply chain management has linked the connected consumer, home, product, and store with the broader supply chain. This provides brands with access to new insights and an opportunity to modernize through value-added services.
Speed to market.
Digital technologies are slashing time to market. Retailers and manufacturers have an opportunity to become first to market, or at the very least, fast followers—rapidly responding to consumer demands with innovative product offerings.
Disruptive players and technologies.
Disruptive, consumer-centric players like Amazon and Alibaba are redefining the industry and raising the bar for end-to-end experience. They’re innovating rapidly, acquiring other industry disruptors, and developing new purchase models based on breakthrough technologies.
“Walmart, Costco, and Kroger lost 18.8 billion USD in market capitalization on Friday (16 June), after Amazon announced it would buy Whole Foods.” Quartz Index (2017).
Consider also Dominos Pizza’s recent ‘order-by-voice’ innovation, exploiting the capabilities of Amazon Alexa. Using just a simple voice command, consumers can order a Dominos delivery simply, intuitively, and the instant they realize they want one. It’s real-time, sense-and-response, demand and supply chain management in action.
The war for talent.
The future of Consumer Goods—indeed, the present—is technologically driven. With suppliers, manufacturers, retailers and consumers becoming less distinct, new business and consumption models becoming commonplace, and consumer expectations becoming increasingly demanding, brands must adapt rapidly, or perish. To thrive in this landscape demands top talent, but individuals with the required skills and experience are in high demand.
To attract, retain, and develop the best talent in this competitive marketplace, players will be forced to innovate and offer attractive workplace environments.
Estimated reading time: 2 minutes
Blurring the Line Between Manufacturer and Retailer
Like it or not, the consumer is increasingly in the driving seat. Manufacturers are moving from a push model to a pull model, adopting a demand-driven value chain where the wants and needs of consumers dictate production. This means fewer mass-produced products, and greater delivery of personalization and customization direct to consumer.
Source: PLMA, 2017
A combination of consumer demands and technological developments are blurring the line between supplier, manufacturer, and retailer—helping to reduce time to market, wastage, and operational expense. They’re causing manufacturers to completely reimagine the supply chain, moving from a traditional, linear string of processes—source, create, deliver, consume—to a more interconnected, organic approach. In our new digital world, a rigid supply chain is no longer practical—or necessary.
Value chain disruptors/thought starters:
Amazon and Alibaba—are vertically-integrated logistics providers, not just ecommerce retailers.
Bingobox—is the unmanned, automated store being rolled out for 24-hour access.
Manufacturers are becoming retailers and retailers are becoming service providers. They’re discovering new opportunities to foster collaboration, increase revenue growth, and get ahead of the competition. And digital is changing the way trading partners manage beyond their singular enterprises—all parties, suppliers, distributors, and retailers must connect to increase efficiency and find mutual success.
Blockchain: set to revolutionize the value chain? A blockchain is a digitized, distributed ledger that records every transaction across a peer-to-peer network. It’s a true game-changer: reliable, effectively tamperproof, and secure. It removes the ‘third party’ element from digital transactions, underpinning cryptocurrencies like Bitcoin. And because blockchain effectively guarantees data ownership, protects data privacy, and prevents unauthorized duplication, it’s going to enable countless new business models—while disrupting many existing ones.
In Consumer Goods, change remains continuous—so predicting the next big thing is far from an exact science. Players must improve operational agility and adopt cloud-enabled, consumer-centric data analytics to better forecast where consumers are going if they’re to anticipate the next disruptive influence.“What often starts as a realignment of the business around the customer is leading to the invention of new products and business models. This cascades to changes in organizational structures, required skills, and more.”
Harvard Business Review: The Ecosystem Equation: Collaboration in the Connected Economy (2016)
Estimated reading time: 2 minutes
Driving Business Growth with New Digital Technologies
Technology gives organizations the chance to use industry disruption as a catalyst for innovation and business growth. Game-changing technologies like chatbots, AI, machine learning, blockchain, IoT, and 3D printing are emerging all the time, putting consumer goods manufacturers on the back foot—when’s the right time to invest, and which technologies are worth exploring?
Source: Gartner CSCO Survey, 2017
Chatbots can play the role of a virtual shop floor assistant, guiding consumers through purchase decisions and enhancing the customer experience. Chatbots enabled by AI are a more effective means of answering customer queries than web pages—they’re responsive, intuitive, and quick, and can even help to close sales that might otherwise be missed.
“A time and place will come where more complex questions can be answered by chatbots, but for now they offer an excellent opportunity for retail brands to answer users’ questions quickly, easily, and without needing to fight with a new app, platform or service.” Adam Bastock, Chatbots Magazine (2017)
According to Accenture, artificial intelligence will double the economic growth rate of 12 developed countries—including the US, UK, Japan, and Germany—by 2035. Tech entrepreneur Elon Musk, meanwhile, described it as humanity’s “biggest existential threat”. For better or worse, AI promises to disrupt all kinds of industries. AI allows businesses to automate labor-intensive processes through robotics—helping enhance the customer experience, and arming staff with the knowledge to improve performances and outcomes.
Effectively, machine learning involves ‘training’ a computer with vast quantities of data until it ‘learns’ correct responses by identifying patterns in that data. It’s already found its way into consumer technologies—such as Amazon’s Echo and Google’s Home—and it’s revolutionizing numerous business processes, too.
The internet of things.
The possibilities offered by the internet of things (IoT) can be broken into two distinct parts: ‘products’ and ‘data’. IoT is giving rise to a wealth of new connected products and services—from white goods to central heating systems, cars, cities, assembly lines, and even entire factories. The data generated and captured by IoT will enable the creation of new business models, enhance existing business processes, reduce costs, and offer new value-added services.
“For the first time, [blockchain provides] a way for one internet user to transfer a unique piece of digital property to another internet user… the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.” Marc Andreesen, entrepreneur and software engineer, The New York Times: Why Bitcoin Matters (2014)
Virtual reality and augmented reality.
It’s easy to dismiss virtual reality (VR) and augmented reality (AR) as fads, but both technologies are finding a host of new practical applications—from Snapchat filters to the heads-up displays in executive cars to the entertainment industry. The gaming industry alone—already worth more than double the international film industry—will be completely transformed by VR, providing the opportunity to explore entirely new immersive dimensions. As a creative tool, VR could prove just as groundbreakingly disruptive as the moving image.
Early trials of VR in retail show strong promise for the future virtual in-store experience, while AR applications can provide the consumer with new levels of insight and information overlaid on real-world scenarios.
The possibilities afforded by 3D printing are only beginning to be realized. It’s helping to slash time to market, enable rapid, on-demand prototyping and widespread customization, and greatly enhance the speed and accuracy of manufacturing. While integration issues have hampered early adopters, 3D printing has already disrupted the medical technology, automotive, fashion, and manufacturing industries, and many more are likely to follow.
Tech trends in Consumer Goods.
Manufacturers, and suppliers must:
no longer react to disruption, but cause it
adopt a fail-fast culture of innovation
develop new ways of designing, creating, and delivering products
connect with consumers through new technologies
embed AI to amplify value across the application portfolio
eliminate the complexity of combining and integrating data sets, and gain new insights with big data and visual analysis
align marketing across every stage of the consumer journey—pre-shop, shop, and post-shop.
Estimated reading time: 2 minutes
Cloud is the Destination
Consumer goods manufacturers are changing rapidly and fundamentally. In an unpredictable future—dictated by transformative technologies, agile competitors, and changing consumer expectations—only the cloud can deliver the scalability, flexibility, cost efficiency, and future-readiness consumer markets demand.
“Oracle Service Cloud enabled us to provide superior customer service, launch better campaigns, and monitor our activities on an integrated omni-channel cloud platform. We have saved time, effort, money, and can focus more on giving parents the support they need for their baby’s nutrition.” Isabelle Simal, International Customer Service Manager, Nestlé BabyNes (Nestlé S.A.)
It’s imperative that manufacturers construct a cloud strategy capable of exploiting digital opportunities, enabling new consumption models, meeting the expectations of hyperconnected consumers, and responding proactively to change.
Cloud transformation helps brands:
transform their technology footprint from on-premise to as-a-service
enable seamless integration of analog and digital worlds
deliver rich, personalized experiences and real-time insights
improve trading partner collaboration
reduce costs and increase speed to market with simplified IT.
Rethinking Consumer Goods.
In this era of profound change, we’re being forced to re-examine the nature of consumer markets themselves. What is a manufacturer? What is a retailer? What is a consumer? No longer will they slot so neatly into individual boxes. With the lines between supplier, manufacturer, and retailer blurring, the new world of Retail and Consumer Goods Industries practically defies description.
In a world where innovative manufacturers go direct to consumer, where innovative retailers own no stock, and where hyperconnected consumers want to combine the physical and the digital in entirely new ways, consumer markets must recognize, embrace, and implement change.
With the right cloud strategy in place, businesses can prepare for—and thrive in—a challenging future.