Consumer products companies have adapted well to the COVID-19 pandemic. The consumption shift to the home, together with the increased importance of health and hygiene, has boosted growth and profits for many. The companies have changed much faster than anyone thought possible: 84% of consumer organisations conducted a comprehensive strategic and portfolio review in 2020. After a tumultuous year, it could be tempting to take your foot off the accelerator, at least for a while. That would be a mistake.
The consumer you’ve adapted to serve today is not the consumer that will make you profitable tomorrow. As people around the world emerge from the crisis, they plan to fundamentally change how they spend money and live their lives as they emerge from the depths of the pandemic.
The latest economic data is showing the extent to which the economies in Australia and New Zealand are coming back to life, driven by consumer spend with the release of pent up demand. Concurrent with the spending, large tranches of Australians and New Zealanders confirmed in the Future Consumer Index (FCI), a global survey tracking changing consumer sentiment and behaviors across time horizons and markets, that they are trying to save more money than in the past (63% ‘saving more’ in both countries) to buffer for any headwinds. They do remain guarded, but there is a renewed energy as the future looks a little more certain. People’s concerns and what they value will continue to evolve, including:
- Affordability becoming critical, with 65% Australian, and 76% New Zealand consumers saying price will drive their choices three years from now.
- Purpose mattering more than ever, as 67% Australian, and 66% New Zealand consumers say brands must positively change the world.
- Consumers embracing data sharing, with 53% of Australians, and 60% of New Zealanders prepared to share personal data for healthier product recommendations.
Can you use your recent performance to accelerate the transformation of your business, to get ahead of the emerging needs identified in our research? It won’t be easy. It requires going beyond making your current portfolio more affordable, demonstrating the benefits of your products, innovating incrementally, and experimenting with direct to consumer channels. You must be bolder about meeting the needs and expectations of the changing consumer.
This article provides critical answers and actions to help leaders reframe the future of their organisations and identifies five steps to help you transform more quickly:
- Redesign your business around how people live, not what consumers buy
- Compete for shoppers wherever and whenever they are
- Rebuild your supply chain around the consumer
- Change your operating model to make it ‘asset right’
- Look at value through a wider lens