Digital Revolution is a top priority for 54% of consumer good firms - but one-third lack the know-how. Research finds over half of business leaders place digital strategy and data analytics high on their agenda, and the supply chain rates as their number one challenge and area of investment.
Together with KPMG International, The Consumer Goods Forum released on 17 July 2014 the results of the annual Global Top of Mind Survey - Transforming for Growth: Consumer Business in the Digital Age
. The survey, which polled nearly 500 C-suite and senior executives globally, reveals how important the digital revolution will be over the next 12 months to consumer goods and retail companies – impacting everything from business growth and supply chain management to food safety, sustainability, and data security and privacy.
The summary of findings below has been contributed by The Consumer Goods Forum.
A Shift towards Digital
The replies from our membership and key industry representatives showed that, more than any previous year, the focus of executive attention has shifted from economic uncertainty to data, technology and the supply chain. As the consumer demand for digital experiences and e-commerce grows, retailers and manufacturers are looking at how they can meet these needs and operate in this new era of disruptive technology.
- 54% of respondents cited digital strategy for mobile/digital platforms as top of mind for their business over the next 12 months; 32% of respondents however currently see themselves as having weak or no capabilities in these areas
- 56% of consumer goods and retail business leaders cited data analytics as being important to their firm’s strategy, making it the highest-ranked strategic area in the survey
- 47% of the respondents cited data security as being very or critically important to their business, and 29% said it will be one of their biggest challenges over the next 12 months. Data analytics were also cited as one of the three biggest business challenges over the next 12 months (21%)
Top of the Charts – the Supply Chain
The supply chain was rated as the number one challenge for their companies - and is also the most likely to receive increased investment this year.
- 38% of executives cited supply chain management as their main challenge
- 42% placed supply chain management at the top of their list for increased investment over the next 12 months. This was followed by international expansion (32%) data analytics (28%) and digital strategy (28%)
- 45% of executives said speed and agility is their top priority for improving the supply chain
Sustainability and Health Driving Decisions
A significant number of consumer goods and retail leaders also indicated the importance of corporate social responsibility in their plans for the next 12 months through transparency and environmental considerations.
Peter Freedman, Managing Director of The Consumer Goods Forum, commented:
- 44% of business leaders cited traceability and transparency around end-to-end value chains as a top goal for their company just ahead of reducing waste and emissions (42%) and sustainable sourcing (41%)
- Food retailers and manufacturers listed health and wellness (47%) and securing food safety (46%) as their top goals for the next 12 months
- 52% of respondents reported that they have a strong or good capability to meet their sustainability agenda. Reputation and brand (41%), consumer demand (34%) and competition (28%) were cited as three main drivers behind sustainability
- 56% said health and wellness and/or CSR and sustainability priorities are very important to their business
“This year’s research clearly shows how important digital strategy is to the modern consumer goods industry, as new technologies and new entrants to the market disrupt traditional consumption. Getting this strategy right and acquiring new digital skills will allow businesses to reach out to consumers in new ways, drive growth and enhance other important elements of their businesses; not least when it comes to ensuring a transparent and collaborative end-to-end value chain. The Consumer Goods Forum is already helping members get to grips with these important challenges through our programme of major projects, events and best practice communities”.
Willy Kruh, Global Chair, Consumer Markets KPMG International, added:
“The survey results reveal that improving capabilities in the area of data analytics is the number one strategic priority for executives in the consumer space in 2014. At a time when 90% of the data currently available has been generated in the last 2 years, the volume is overwhelming. And while data analytics may be at the top of the corporate agenda, the challenge that should really be keeping companies awake at night is data security. Although 47% of the respondents cited data security as being very or critically important, this is not enough. Companies are still a long way from where they need to be in terms of protecting their client and proprietary information from security breaches. Hackers will always be one step ahead, and companies need to ensure they are not overconfident in their ability to protect themselves.”
This research report is the second annual report to be released by The Consumer Goods Forum and KPMG. It was conducted by Oxford Economics on our behalf during April 2014. 469 C-suite and senior executives were surveyed from food, drink and consumer goods manufacturers and retailers based in 32 countries.
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for the full report.
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