The FINANCIAL — An incisive new report has found that 61 percent of senior executives in the consumer markets industry have building consumer trust as a core value; and 32 percent say trust is and will be one of their biggest challenges over the next one to two years – second only to expansion and top line growth.
The survey of 539 consumer industry executives from 41 countries, conducted by KPMG International and The Consumer Goods Forum (CGF), revealed that the majority of respondents said they have knowledge of consumers’ behavior, although only one in five had a strong confidence in this knowledge. A further 20 percent could not definitively claim that they have an accurate picture of what items their own customers are buying from their competitors versus themselves.
This third annual Global Consumer Executive Top of Mind survey from KPMG and The CGF focuses on what is top of mind for senior decision makers in the consumer food, drink, goods and retail industry globally, and is released just days before the CGF’s Global Summit convenes in New York.
The “knowledge gap”
The report suggests that some segments of the consumer industry lack understanding of the needs of their customers, an issue which could be hampering business growth. In response, businesses are attempting to close this “knowledge gap” by engaging more with customers as a pathway to growth. According to the report, there are two key priorities which companies are focusing on, apart from growth and expansion: an omni-channel customer focus (letting customers shop on their own terms) and winning consumer trust.
The Global Consumer Executive Top of Mind survey found that as well as understanding their customers, businesses need to win their trust and are starting to treat it as a core value. The survey highlighted a number of key trends:
One in three respondents (30 percent) said they have recently increased their investment in the area of consumer trust.
Two thirds of respondents commented that they saw investing in CSR or sustainability as a key part of building trust in their brand. Food and product safety and consumer health were rated as particularly important areas of CSR.
These strategies respond to the growing importance of gaining consumer trust , as reported for example by recent research in to trust, which found that nearly two-thirds (63 percent) of the consumers they surveyed “refuse to buy products and services from companies they do not trust”; while 68 percent said they would “recommend a company they trusted to others.”
The study highlights how businesses are having less of a transactional relationship with their customers and are competing to win emotional engagement. Respondents are using social media strategies (41 percent) and loyalty/membership programs (31 percent), due to the potential for personalization and targeted discounting. Behavioral research is starting to influence the way in which companies target their customers; the report highlights that some companies (19 percent) are turning to pre-populated shopping technology, which “remembers” and stores a customer’s favorite items.
Succeeding in an omni-channel world
To improve the “omni-channel” customer experience, the survey shows that companies must consider shifting their hiring strategies so that their workforce has the skills and experience needed to take radical new steps. This could be expanding into new markets, leveraging omni-channel strategies or adopting new innovative technologies. Over half of the retail respondents said that they offer a seamless shopping experience across channels, and slightly fewer offer the ability to shop from a mobile device—showing there is still a lot of scope for improvement across the sector. Businesses should also invest in research and data analytics so they can monitor consumer patterns, ideally in real time, and target their behavior accordingly. The report notes that some consumer-facing companies have been quick to use social networks to gather consumer data, which they can use to influence and personalize their marketing.
Peter Freedman, Managing Director of The Consumer Goods Forum, said “The world is changing for consumer-facing businesses. We’d encourage all of our members to invest in fully understanding their customers and their expectations in key areas such as sustainability, health and wellness and food safety. Without this insight, firms will struggle to win loyalty and trust which is essential to remain competitive in the digital age of a two-way dialog between brands and consumers.”
Willy Kruh, KPMG International’s Global Chair, Consumer Markets: “With topline expansion and growth being this year’s top priority as well as the top challenge, the survey data clearly shows that a new battleground is emerging—how to understand and win over customers. There are some hard choices to be made to build or maintain a competitive advantage. Furthermore, companies must be aware of and proactively address potential disruptors—the optimal time is usually long before you think it’s the optimal time.”