Simon Ellis and I recently attended Consumer Goods Technology (CGT)'s Sales and Marketing Summit in New York City, and we'd like to share some of the conversations that interested us most. The event drew an audience filled with CPG companies, with those on stage including Walmart, Kimberly-Clark, PepsiCo, L'Oreal, Kraft Foods, and Procter & Gamble. Of course, most of the presentations centered on reaching the consumer in new ways and better understanding consumer behavior.
Panel on Social Media, Trade Promotion Management, and Downstream Data in the CGT-IDC Manufacturing Insights Sales & Marketing Report
Simon joined a panel with L'Oreal and PepsiCo to highlight three of the topics in our 2011 Sales and Marketing Report (produced with CGT) – social media/social business, trade promotion management, and downstream data:
For social media, one of the interesting dynamics was about the push/pull nature; in other words, companies are investing in social media and exploring how they can use new channels to influence and reach out to consumers, but there's also an important aspect in terms of how social conversations can also drive companies to make decisions or investments where they didn't necessarily expect. PepsiCo's example was of a conversation about ideas for new chip flavors that essentially went viral and prompted PepsiCo to quickly develop a new product for the market to coincide with the public conversation. This is a great example of social media being very business-relevant, but to truly capitalize on this new form of customer relationship, PepsiCo also had to have the capability to respond by developing and introducing a new product quickly. We think this topic deserves more discussion, and we'll follow this up with a more-in depth report. (And you can hear more in a webcast recording "Moving Faster Than a Speeding Bullet - The Next Stages of Social Business Transformation," from our IDC colleagues.)
Conversations about trade promotion management (TPM) in the panel and also in a Kimberly-Clark presentation emphasized the fact that it's an area that continues to need improvement, making a distinction between management and optimization, and always looking for ways to make TPM more effective. Overall, consumer goods companies are getting better at using trade promotions to drive sales.
Downstream data is also far from a guarantee, as we heard about how CPG companies' expansion into new markets (in emerging and developing regions) often means gaps in sales data or data quality issues. And for those markets where manufacturers do have access to reasonably good quality point of sale (POS) data, we still think we're in the early stages of using POS data on the supply side, such as sending better quality production signals on to suppliers.
Mobility and Applications of Technology, New and Old
One of our emerging agenda topics was a frequent discussion point –mobility. Greg Stuart, the CEO of Mobile Marketing Association, made the point that the mobile channel is unique because of its "personal, pervasive, and proximity" characteristics, with my interpretation of proximity being a reference to knowing a person's physical location and proximity to a physical good but also for the device's ability to "be the store", with mobile commerce growing.
We also heard about more advanced technology applications, including Kraft's technology-embedded Meal Planning Center showcased at NRF as well as P&G's use of virtual reality to improve the product, shelf, and store. One of the connections we liked is how new applications of technology are improving the productivity of the business, in this case related to sales and marketing.
Data Quality and Governance Challenges
Simon joined a second panel discussion, towards the close of the event, on the importance of data quality and governance. Along with Dan Wilkinson of GS1's 1Sync, this was a lively exchange on the importance of data as a foundation for many of the new capabilities CPG are pursuing. There was a general consensus that data quality remains a challenge for the industry, and that new capabilities for mobile devices will depend heavily on the accuracy of the underlying data. Data quality is very much about getting back to the basics of governance and accountability, but the business case for a data quality initiative has proven to be tricky, given the pervasive nature of data and the difficulty in assigning cost benefits. Regardless, there was a view that increasing the visibility of data quality issues within the score-carding process might be a way to raise the profile.
Moving Forward – Technology and Change
It's also worth remembering one of the key points that was made at the conference and restated over and over in slightly different ways – technology is only valuable when it becomes part of the solution, and one of the most difficult challenges is getting people to change the way they do things today. We're looking forward to more discussions on these topics, and it's our experience that CPG companies are in different stages of technology adoption and maturity. We would like to learn from the best and keep looking ahead to find the possibilities.