The Idea: Bain and Company’s recent consumer products analysis stated that the biggest hindrance to CPG’s success in the digital era is the reluctance to be agile in an increasingly fast-paced world. Leaders in the industry have distinct characteristics: they learn to embrace digital’s versatility; they learn to reconfigure the relationship between product and the mobile customer; they prioritize a superior shopping experience. More than anything, though, they seek out discomfort and disruption before their competitors. What does every team need to remember in an age of disruption?
Every brand must expand its capacity for change in a complex world. As futurist Alvin Toffler defined it, complexity is “when there is too much change in too short of time. Amazon has disrupted everyone’s world, and we must change along with it. The IMPACT Forum explored how to protect and grow your traditional retail business and thrive in the digital space. The forum featured four unique voices commenting on new thinking and strategy in building your business in a digitally disrupted world. Five ideas resonant with me:
- Bryan Gildenberg, Chief Knowledge Officer of Kantar Retail, discussed the “New World Order” and the global implications to disruptive change. Gildenberg shared, “90 percent of all big brands have lost market share. By 2020, the average consumer will be spending $2 on non-stuff (intangibles), and $1 on stuff (tangibles). Premium products must deliver a measurable premium benefit. The future is about moving from product to transformational experience.” Gildenberg shared, “all brands are now in ‘Perpetual Moments of Truth.’ It’s about moving consumers to conversion.” The future is transitioning from shopper marketing to conversion marketing. We are competing for customers’ time and energy. ABC: Always Be Converting.
- Nathan Rigby V.P. of Sales & Marketing at One Click Retail led a discussion on “Best in Class Digital Intelligence.” Rigby led off his discussion by sharing “Granular data understanding is vital in uncovering the truth about your digital business. Digital brand trends are often dramatically different than brick and mortar trends. You may be misled and not even know it.” Sales people are purposefully removed from the quote process at Amazon. And brands must create thoughtful strategy, structure, and skills to drive Amazon’s success and optimize their conventional retailer business. You must create a disciplined go-to-market strategy.
- Melissa Burdick of Leigh & Burdick E-Commerce & Amazon Advisory presented, “Blind Spots in Amazon Partnerships.” Burdick corrected misperceptions about Amazon’s pricing strategy: “Amazon is a huge magnifying glass. They are price followers and do not set national price strategy. They essentially follow the price dynamic you have created in the national marketplace. Amazon is not a price setter; the manufacturer creates their own pricing problems.” To be relevant, brands must manage a portfolio of distribution streams to meet the customer where they are at with a long-term pricing strategy.
- Patrick Miller, Co-founder of Fly Wheel Digital discussed “Optimizing the Amazon Ecosystem.” Miller explained to the group that “Amazon is customer-obsessed, long-term oriented, and fueled by innovation. And they are dramatically more efficient at buying media than Facebook and Google. Customer Experience is their ultimate scorecard; everything runs through this filter.”
- Amazon is simultaneously a growth catalyst, a developer of brands, and a threat to your organizational health. Tomorrow’s best organizations must cultivate new thinking, capabilities, structures, and mindsets when partnering with Amazon. Resource optimization no longer creates competitive advantage. It’s now about creating new platforms, brandable services, and true value creation that matters to the consumer. The best retailers are artists, filled with emotion, personality, and purpose. Learn to quickly spot new trends, focusing on value creation and testing, not efficiency.Do you have enough Amazon specialists and partners on your team?
What do you do in the era of fear and disruption?
Jimmy Iovine, music executive, producer, and co-creator of Beats by Dre. Iovine shared, “I have learned to harness fear. When I start to feel it, I move forward… I took the rearview mirror off my car a long time ago.”
The most interesting companies embrace the question, “what’s next?”