POTENTIAL, UNTAPPED: Advancing Data Transformation For Consumer Products Firms

A Research Report from Publicis Sapient and Adobe

Though more than half of consumer products (CP) firms say they are “partially” or “mostly” digital, only 8 percent report being a “completely” digital organization or having fully mastered data/analytics platforms. While 71 percent of CPs believe they are ahead of competitors in AI adoption, 48 percent still struggle to monetize the technology for better return-on-investment.

Analytics and Data Maturity

Respondents were asked to indicate where their company aligns on a scale regarding analytics and data:

8% are experimenting with key technologies such as APIs, social media, blockchain, and cloud platforms.
3% are at an early adoption stage.
17% are adopting key technologies for platforms.
35% are progressing toward mastery.
38% have mastered key technologies for platforms.

On digital maturity:

8% are mostly not digital.
1% are at an early digital stage.
2% are partially digital in strategic areas.
37% are mostly digital.
53% are a completely digital business.

Despite these advances, only a small fraction have fully mastered data/analytics platforms.

CPs See Benefits of E-Commerce, but Outside Forces Accelerate Change

Owned e-commerce channels are projected to represent less than a fourth of overall CP revenues in 2020, but they remain a steady opportunity for growth. Subscriptions, though a smaller share (8.4 percent), are cited as an emerging source of income as CPs expand direct-to-consumer (D2C) services.

Investment in digital channels, artificial intelligence (AI), customer experience, and data/analytics remains prevalent. However, mounting pressure from digitally mature incumbents, D2C disruptors, and increased demand from the COVID-19 pandemic are prompting CPs to reallocate resources. As a result, CPs are exploring new D2C models (such as subscription business models) and shifting their marketing and business strategies to swiftly meet changes in customer demand.

Kristen Groh, Consumer Products Industry Lead, North America, Publicis Sapient, notes: “We’ve seen brands getting creative with how they have adapted to the changes in consumer behaviors driven by COVID-19. By standing up D2C experiences that differentiate with subscription models or specialty packs not found at traditional retail, brands were able to avoid channel conflict while serving their consumers, collecting valuable data, and creating more direct relationships.”

The Future of AI

65% of CPs have initiated 2-5 AI projects within their organization.
81% of organizations have defined a significant number of specific AI initiatives they plan to implement before the end of 2020.

A respondent from the Pet & Garden Industry shared: “Without COVID, we believe it would’ve taken years to get where we’re at now from an e-commerce perspective.”

When asked about organizational pivots due to COVID-19, CPs reported:

55% are increasing allocation of resources to new business models (e.g., subscriptions, e-commerce capabilities)
49% are revising marketing strategies to adapt to changing consumer sentiments and habits
35% are realigning business segments to adapt to new priorities
34% are investing in new and emerging capabilities
30% are pausing or discontinuing initiatives previously identified as top priorities
25% are resetting cost structures

For FY21, the greatest anticipated investments are:

Digital Channels: Top 18%, Top Three 45%
Consumer Experience: Top 15%, Top Three 36%
Customer Relationship Management: Top 12%, Top Three 32%
Data and Analytics: Top 11%, Top Three 41%
Operations: Top 11%, Top Three 28%
Products and Services: Top 9%, Top Three 34%
Loyalty Program/Initiatives: Top 8%, Top Three 21%
Customer Service: Top 8%, Top Three 18%
Physical Channels: Top 3%, Top Three 13%
Brand: Top 3%, Top Three 14%
Loyalty Ecosystem/Partnership: Top 3%, Top Three 18%

Advancing E-Commerce Transformation

With rapid innovation top-of-mind, CPs should focus on expanding existing e-commerce opportunities and D2C in a way that enables short-term value while setting a foundation for long-term growth.

Bruce Richards, Senior Industry Marketing Manager, Retail & Consumer Goods, Adobe, states: “There’s been an unprecedented growth in online shopping driven by COVID-19. Much of this consumer behavior will stick as we get back to a new normal. This is an opportunity for CP brands to capture and maintain a significant share of market by focusing on the right changes and priorities within their organizations.”

How to Get Started:

Evaluate the existing e-commerce business and company potential to bring new products or services to market. Identify areas of opportunity to quickly optimize and improve customer experience. Assess demand for particular D2C models and organizational infrastructure to support these initiatives.
Prioritize data strategy with a focus on providing the most value over time. Less advanced firms may need to establish the right technology or experiment with “lighter” D2C models, while more advanced firms can focus on testing, learning, and innovating.
Think like a tech company: Adopt an organizational mindset rooted in data innovation. Communicate the value of new e-commerce initiatives to leadership to secure buy-in and build dedicated teams.

A respondent from the Food & Pet Care sector commented: “We need to go there. We all want to invest there. We want to get organized there. The question is how? With whom? Today, you do B2B, B2C, but you go through the grocery and they sell to your consumer…Tomorrow, you will own the relationship, you will own the data, and you will get access directly to the consumer.”

How to Use Data to Extract Meaningful Insights Remains a Crucial Challenge

CPs have made strides in evolving data intelligence and analytics capabilities but face several core challenges. In addition to keeping up with privacy and data regulations, CPs face issues using data to operationalize decision-making, driving innovation through data, and building teams with the right skills.

Primary challenges in using data to maximize value and drive profitable growth (Top Three):

Use data to make better decisions: 43%
Using quantitative and qualitative data to drive innovation: 45%
Use data to operationalize decisions: 47%
Concern over stringent data privacy rules and regulation: 52%
Adopt a rapid test and learn environment: 37%
Achieve a 360-degree view of the customer: 37%
Lack of data and intelligence skills: 40%

A respondent from the Packaged Foods Industry remarked: “Data’s one thing, but what do I do with it? And what does it mean? I think turning that data into something meaningful is a skill and that’s where the value gets created.”

The Data Disconnect

While CPs are using data, the disparity between what’s collected and how it’s used is clear. More than half of CP firms are using data from social media and search, alongside e-commerce data, data generated from relationships with D2C partners, and transaction data.

Current activity in using data types:

Social media data: 64% Active, 28% Experimenting, 8% Non-active
Search data: 59% Active, 35% Experimenting, 6% Non-active
Direct-end customer data (first party) from D2C partners: 54% Active, 35% Experimenting, 11% Non-active
Predict customer intent from transactions: 53% Active, 43% Experimenting, 5% Non-active
Direct-end customer data from e-commerce transactions: 53% Active, 42% Experimenting, 6% Non-active
Syndicated POS data: 50% Active, 43% Experimenting, 7% Non-active
Create customer genome using transactions, site behavior, profile demographics, impressions, 3P data: 49% Active, 39% Experimenting, 12% Non-active
Detect customer product preference (utility) other than sold and price: 48% Active, 43% Experimenting, 10% Non-active
Customer IoT/sensor data: 48% Active, 46% Experimenting, 7% Non-active
Geolocate where customers are transacting: 40% Active, 50% Experimenting, 10% Non-active
Detect or predict live event: 35% Active, 50% Experimenting, 15% Non-active

AI in Business Today

63% of CPs are using AI to analyze product or consumer data.
54% say automating insight generation is the most relevant use of AI within their organization.

While a majority of CPs say they’re applying data towards improving service, personalizing customer experience, and improving product recommendations/search, only around a third are using data to its greatest extent in these key areas.

Most valuable areas for using data to optimize customer value and drive profitable growth:

Improve service: 64% Using, 32% Can use
Help customers discover products: 63% Using, 36% Can use
Save customers time: 63% Using, 34% Can use
Personalize experience: 62% Using, 32% Can use
Improve convenience: 62% Using, 35% Can use
Optimize experience (cross/up sell): 60% Using, 39% Can use
Build trust and advocacy: 59% Using, 37% Can use
Connect touchpoints for the customer: 55% Using, 43% Can use
Save customers money: 51% Using, 45% Can use

A respondent from the Health and Fitness Industry shared: “Keeping data current, clean and being able to analyze it well are the biggest challenges. Do you invest in the capability to do that before you grow the business? Or do you grow the business and then invest in the capability to do it when there’s really more to be gained from it?”

Current Level of Use

Customer communications are customer specific: 38% Fully deployed, 39% Advanced, 15% Moderate, 7% Early, 1% Not deployed
Automated marketing campaigns and lead management: 33% Fully deployed, 38% Advanced, 25% Moderate, 4% Early
Information provided to customers is consistent across sales channels: 33% Fully deployed, 38% Advanced, 25% Moderate, 3% Early
Customer interactions are tailored to the context: 32% Fully deployed, 38% Advanced, 24% Moderate, 6% Early
The overall consumer experience is aligned across channels: 30% Fully deployed, 43% Advanced, 18% Moderate, 7% Early, 2% Not deployed
Offerings from product to IoT-enabled services: 29% Fully deployed, 41% Advanced, 23% Moderate, 7% Early, 6% Not deployed
Customer insights from use of products/services are infused into R&D, product development, and marketing: 28% Fully deployed, 42% Advanced, 29% Moderate, 2% Early

Use of Analytics

Use analytics and data to improve visibility, the value chain, and the market: 36% Fully deployed, 43% Advanced, 17% Moderate, 4% Early
Leverage analytics to gain a deep understanding of consumers and segments: 28% Fully deployed, 47% Advanced, 24% Moderate, 1% Early
Leverage statistical models to minimize returns: 37% Fully deployed, 38% Advanced, 21% Moderate, 5% Early
Use analytics on external/internal drivers of demand: 35% Fully deployed, 37% Advanced, 22% Moderate, 6% Early
Leverage statistical techniques to determine optimal retail locations: 28% Fully deployed, 43% Advanced, 21% Moderate, 8% Early

(Scale: 1 - Not deployed / Does not describe your organization at all; 5 - Fully deployed / Describes your organization very well)

Connecting Customer Experiences

One of the greatest areas of improvement is using data from multiple sources to create connected customer experiences, indicating that data may be siloed and harder for companies to piece together holistically.

Kristen Groh notes: “While CPs have made strides in leveraging consumer data well in pockets within the organization, silos across markets, brands, and departments have made it difficult for these companies to fully capitalize the use of data across the enterprise—optimizing the supply chain; driving better, more personalized experiences; and improving the likelihood that new product innovations will meet consumers’ stated and unstated needs.”

Data Readiness for CP Firms

Less than half of CPs are enriching their first-party data with second and third-party sources.
Lack of understanding of how data plays a role in current or evolving D2C programs is a top concern when implementing AI.
CPs are just beginning to apply data-driven strategies into other areas of the business, such as R&D for product and service development based on consumer preferences. Less than a third are using data to improve cognitive search.

Bruce Richards adds: “Experience matters now more than ever. The consumer sees the collection of all interactions with the brand as the brand itself. Experience is the new brand. The CP industry must deliver experiences that connect and help the consumer achieve meaningful outcomes—not just commercial or sales-driven outcomes.”

A respondent from the Beauty Industry shared: “Sometimes it’s hard to build the path between all these data and of course we are losing a lot. We are losing a lot of good opportunities, and that’s a huge challenge for us.”

Advancing Data Transformation

CPs have the opportunity to improve by unifying and integrating data and analytics across the enterprise, automating processes, and planning more effectively with better intelligence.

How to Get Started:

Understand the consumer. Improving customer experience goes beyond just marketing and optimizing an e-commerce site. In an increasingly digital world where convenience is expected and consumers are inundated by choice, providing what people want, in the way they want, is critical. Managing data and analytics capabilities under one unified platform allows CPs to map the customer journey across every part of the business, providing clear visibility into business impact and operational improvement opportunities. AI can process data in near real time, enabling better demand planning and price optimization in the short term, while fueling long-term decisions through predictive modeling, product development, and future D2C efforts.

Access to first-party data makes a difference. CPs actively collecting first-party data (from owned or partner D2C channels) and enriching it with second- and third-party insights are better equipped to understand consumers, predict demand, and provide more contextual experiences than those that are not.
Build the right team. As CPs become digital organizations, they need teams capable of supporting a new way of working. Shortage of AI-specific skills (39%), lack of employee adoption (30%), and poor understanding of AI among leadership (28%) are top cultural roadblocks. Many CPs are scaling capability and mitigating cost through offshore partnerships, helping build the right skill sets for long projects or fixed periods. This approach allows CPs to focus on upskilling or reskilling internal talent for the long term while addressing immediate needs.
Embrace a culture of change. Despite adoption challenges, 97% of CPs say they continuously seek innovation. Fostering organizational change requires a deep understanding of both process and people. Who are the champions of data and analytics within the organization? How is the organization communicating change efforts? What can leaders do to provide employees with the resources needed to succeed?

Around 80% of respondents agree that leadership should involve stakeholders when setting KPIs for AI projects, establish an experimental, test-and-learn environment, and use analytics to monitor AI effectiveness. Providing a transparent look at the successes and roadblocks around AI implementation helps build trust and acceptance for AI projects. These C-suite actions are essential to avoid excessive skepticism or unquestioning acceptance of algorithm-driven actions.

C-suite Engagement in AI Initiatives:

34% strongly agree and 48% agree that leadership should be engaged in setting KPIs for AI projects.
32% strongly agree and 49% agree on fostering a critical-minded and experimental culture of working with algorithms.
38% strongly agree and 39% agree on tracking whether algorithms are improving results.
31% strongly agree and 45% agree on enforcing a critical-minded and experimental culture.
33% strongly agree and 40% agree on deciding which decisions can be delegated to algorithms.

A respondent from the Food & Beverage Industry stated: “You can have the best technology developed, but if you don’t know how to use it, how to operate it, how to install it in the company, it’s useless.”

Conclusion

This is an opportune moment for CPs. Digital tools and technologies are only becoming better. During uncertain times, e-commerce is serving as a way to evolve how CPs interact with consumers at a time when building relationships and providing safe, convenient experiences are more important than ever.

At the undercurrent is the data and analytics that fuel proactive business decisions. With consumer habits poised for rapid change and a market increasingly crowded by competitors, CPs must work to understand where opportunity exists to build their business and create a foundation for scalable growth. Operationally, a platform approach to data and analysis helps CPs bring their existing data efforts together across the enterprise. Culturally, building the right teams and fostering a culture of change helps align the business towards achieving data-driven goals.

Our Methodology

The Adobe Consumer Products study was completed via online interviews by a third-party research firm hired by Adobe and Publicis Sapient. The sample is composed of 120 Consumer Goods and Services respondents. Interviews consisted of an administered questionnaire, covering:

Introduction and Screening Questions
Digital and E-commerce Initiatives and Investment
Data and Analytics Initiatives and Investment
Artificial Intelligence Initiatives and Investment

Consumer Goods firm types include: Fast moving consumer packaged goods, Nondurable consumer packaged goods, Durable consumer goods. The study was conducted throughout June-July of 2020, with respondents from the US, France, Germany, and the UK. All organizations surveyed have $2 billion+ in annual revenue.

Our Partnership

Our partnership with Adobe, the leader in digital experience technology and platforms, allows us to power transformations in retail, financial services, consumer products, and more. Adobe has named Publicis Sapient their Partner of the Year seven times—a feat no other Adobe partner has achieved. Combining Publicis Sapient’s proprietary methodologies with the power of the Adobe Experience Cloud and the Adobe Experience Platform, our global clients choose our partnership to transform their operations and customer experiences through enriched customer profiles, AI-generated actionable insights, streamlined orchestration, and real-time personalization. Get in touch with us today to see how we can help you start your digital business transformation journey.

Get in Touch

Learn more about how Publicis Sapient and Adobe help leading Consumer Products firms build meaningful relationships with customers and stay top-of-mind using a range of data and analytics capabilities, user experience expertise, and dedicated brand skills to ensure e-commerce growth in an ever-disruptive marketplace. Continue the conversation with:

KRISTEN GROH
Industry Lead, Consumer Products, North America, Publicis Sapient
BRUCE RICHARDS
Senior Industry Marketing Manager, Retail & Consumer Goods, Adobe