Boston Consulting Group paints a clear picture of the reality facing consumer goods companies today:
“From 2011 through 2016, upstart brands took $22 billion in sales from incumbents in North America alone.”
“… these attackers often act more quickly and creatively than incumbents in bringing brands to life.”
‘Bringing brands to life’ is an excellent choice of words to describe the essence of what these incumbents are excelling at, which is connecting their brand to the things that matter to consumers today.
These nimble and capable competitors understand the consumer’s desire to identify with brands, products and companies that reflect their beliefs and values. For many consumers today, some of these values include:
- commitment to natural ingredients, local sourcing, and social responsibility,
- transparency into manufacturing processes, and
- innovative, novel, personalized experiences.
Brands that can address these needs simply win the hearts and minds of more consumers.
But the brand isn’t just about the packaging or even the digital experience. The brand is born, lives and breathes inside your company. It’s inside the value chain, in the way your people work, in your technologies, processes, your supplier community and across every stage of the product journey.
Consumer goods leaders who understand this are actively finding ways to protect their brand from irrelevance, while becoming even more relevant because they know that it’s about agility and old ways of doing business simply can not work in today’s market.
This means being brutally honest about what’s not working and charting a path out of the pain.
The Pain for Consumer Goods Brands is Real
Here are a handful of pain points we have seen surfacing within consumer goods organizations. The specifics vary from company to company, but the issues are universal…
- Increasing supply chain complexity and a variety of siloed systems makes it nearly impossible to collaborate and innovate with speed.
- Entering and exiting product categories, and the pressure to introduce new products means compliance teams, quality and marketing are facing constantly changing demands and competing priorities.
- Document management complexity and manual work habits have created pervasive inefficiencies, errors, and compliance risks.
- New acquisitions are forcing companies to evaluate, and consolidate disconnected operations including Regulatory Affairs, Legal, Marketing and Quality not to mention suppliers and sub-suppliers.
In the past, ambling along under the stress and drag of these restrictions was tolerated. Big manufacturing with big retail distribution was sufficient for brands to dominate shelves and find their ways into consumers’ homes. Despite the burden and inefficiency that took place internally, big brands did okay.
Now Big Consumer Goods Brands Are Struggling
Today, however, internal inefficiencies are causing big problems.
The explosion of product choice at the hand of upstarts, the shift in consumer preference from retail to digital channels, and the ultra-high standards that consumers now demand are simply too much for existing business processes and technologies to handle.
We know this because we’ve seen organizations try to get better, faster and more creative by making what seems like promising improvements to the way in which they work.
But old ways are hard to overcome. Upgrades and integrations on legacy technology, for example, only allow only so much improvement. Manual processes still abound.
Take the claims defense process as just one example.
At most consumer goods companies, defending a claim and protecting your brand means your people have to fight their way through the very technologies they use every day. Digging through email inboxes, excel trackers, and stacks of paper files to find the final versions of documents that haven’t been touched for months is both discouraging and a huge waste of time, money and creates a big opportunity cost. It’s disjointed, unnecessary rework that’s laden with risk. And it doesn’t seem to go away even when companies are running the latest version of their technology tools. The claims defense woes are a microcosm of what happens across the whole organization.
Marketing deals with high-complexity, disjointed work when it comes to document flow, and making brand assets accessible globally and locally.
Quality struggles with document and quality management challenges that make it hard to trace with confidence, or provide clear visibility throughout the supply chain.
Information is hard to share and act on. And so the story goes.
There is a better way
What’s required in order to ensure your brand doesn’t fade away into irrelevance as far as consumers are concerned? The answer, In one word, agility.
Again, BCG puts it simply, saying: “Companies that learn how to become more agile will recapture momentum; the rest will continue to lose share to smaller rivals.”
‘Learning to become more agile’ may sound like something that is easier said than done, but the truth is, you can go a long way in a short time by simply pinpointing where some of the greatest time wasters are. For example, in many companies a number of issues are directly related to poor document management practices. Uncovering even just a few of the root causes and finding a better way can have exponential benefits.
The Biggest Predictors of Brand Irrelevance are Here—Bet You Can’t Name All Five?
We’ve found there are five predictors of brand irrelevance in consumer goods companies, and they’re usually found in places where nobody thinks to look.
We cover them all in our latest report, 5 Signs Your Brand is Winning the Race to Irrelevance.
Download it now, so you can quickly assess if your brand is at risk of becoming irrelevant, and stop it from happening.
- 5 signs that your brand is becoming irrelevant (Try to name all five before you peek inside.)
- The new set of consumer values that drive connection with brands and purchase behaviors
- Easy-to-read visual layout that gives you the insight you need to take action
We’ll be covering more about this topic in an upcoming webinar, but don’t wait. The race to irrelevance is on, and this is one race no consumer goods leader wants their brand to win. Download 5 Signs Your Brand is Winning the Race to Irrelevance now.