Consumer Product (CP) companies operate in an industry where the fundamental rules of the game are changing. The growth of e-commerce, the ability to bypass retailers, the rise of private labels, and the advent of niche CP startups are just some of the trends that are reshaping the sector.
But one significant change that stands out in particular is the direct connection that CP companies today have to the needs and aspirations – the ‘pulse’ – of consumers. This is, to a large extent, thanks to the rise of digital channels. With the growth in channel data on consumers, our new research shows that consumer insights is a core part of the strategic agenda for over 80% of CP companies. Companies are using consumer insights to enhance the effectiveness of marketing campaigns, to roll out new products and refine existing ones, and obtain cost savings and efficiencies in operations.
We found that an overwhelming 90% of companies have faced a data breach and nearly one in two companies do not comply with industry regulations. This concern is amplified by the fact that the EU’s new regulations on privacy (GDPR) are not too far away from coming into force. In fact, our analysis shows that hypothetically, if GDPR were to be implemented today, the global CP industry could face penalties of up to $323 billion, in a worst case scenario. Getting consumer insights right is not an impossible task, but it requires a structured approach. CP companies need to fix their governance structures for insights, develop the right capabilities and establish the role of a chief privacy officer.
The benefits of consumer insights are there for everyone to see, but sustaining value over the long term will require CP companies to focus on privacy issues as a matter of urgency.