Consumer goods companies are transforming themselves into fully integrated, omni-businesses in order to respond to the needs of customers across all channels and at any point during the shopping process.
This is according to a recent survey conducted by KPMG International and The Consumer Goods Forum, which surveyed 400 consumer goods retail and manufacturing executives from 27 countries of which 11 were South African.
The report says by 2018, 32% of the respondents plan to evolve beyond their current single-, multi- or omnichannel retail operations into "omni-businesses".
This means a completely digitally integrated business - including not just sales channels, but also manufacturing, inventory, marketing, sales, payments and distribution, it says.
Forty-two percent of respondents say their customers already expect a seamless experience across sales channels - especially the influential millennial generation.
The consumer industry isn't facing disruption - it's already disrupted. Game-changing technologies have revolutionised supply chains and customer touch points, says the study.
More informed and sceptical consumers are holding the industry to increasingly higher standards and a company's success in achieving customer-centricity or loyalty is no longer a differentiator, but a determinant of survival, it adds.
KPMG says to be in the forefront, consumer retailers, manufacturers, and their supply chain partners are taking steps to transform their companies into digital-first, customer-centric, and fully integrated omni-businesses.
"The most critical focus for these companies is, and always should be, the customer and the customer experience," said Mark Larson, national line of business leader for consumer markets and global and US sector leader for retail at KPMG.
Consumer demands and expectations change rapidly, and companies must continue to adopt a highly 'customer-centric' mindset and leverage new, disruptive technologies to ensure they can understand, meet and even predict their customers' behaviour, adds Larson.
Dean Wallace, lead partner for consumer markets at KPMG SA, says the report highlights the pace of disruption the industry is experiencing from the prevalent influence of millennial consumers, social media and omnichannel business models.
"Customers are demanding an enhanced overall experience from organisations, spurred by the role of technology. According to the report, one of the top immediate priorities for local companies is increasing their use of social media in order to effectively reach their millennial audiences."
Wallace says the customer now has more discretionary control over their purchases and has the power to increase competition among organisations.
In SA's case, though digital maturity is at a beginner stage, the growth of consumer spending in emerging markets and the influence of millennials is a very important external trend for the country, he adds.
The changing landscape can be the biggest opportunity or hindrance, based on how an organisation chooses to see it, says Wallace.
Bill Nowacki, MD, data and analytics at KPMG, says the first step in getting closer to customers is rethinking how to use data and analytics for deeper customer insights.
"Best-in-class companies are going outside their customer relationship management systems to learn about their customers. They are developing more fine-grained data about their customers, including their non-spend characteristics. They are putting sensors around their customers to detect subtle shifts in demand."
The customer is the new point of sale and to compete in a global marketplace with shifting demographics, even today's best-in-class consumer goods retailers and manufacturers require a deeper, multidimensional understanding of their customers, says Willy Kruh, global chair of consumer markets at KPMG International.
"Hyper customer-centricity brings the customer into sharper focus through the use of advanced data analytics and smart technologies to track and anticipate consumer behaviour in near-real time and deliver personalised products and experiences when, where, and how the customer wants them."
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