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NRF's Big Show 2016: Retailers Must Future-Proof their Businesses for an Evolving Value Chain
Capgemini's Kees Jacobs outlines characteristics of a changing consumer climate.
Posted Jan 19, 2016
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NEW YORK — "We are witnessing seismic shifts in our consumer landscapes, and it is vital for retailers to be a positive part of it rather than [be] disrupted," said Kees Jacobs, global consumer products and retail engagement lead at Capgemini, to open his Monday afternoon keynote presentation on day two of the National Retail Federation's Big Show.

In front of an audience of thousands at the Javits center, Jacobs highlighted key findings from Rethinking the Value Chain: New Realities in Collaborative Business, a recent study conducted in concert with the Consumer Goods Forum (CGF) and headed by the CEOs of Coca-Cola and AEON.

Among its areas of investigation, the study analyzed trends in urban megacities in 2025, both from a consumer and an industry perspective. "One thing is clear," Jacobs asserted, and that's by 2025, "consumer behavior [will have] changed forever," as customer demands continue to rise and people begin to leverage an array of new technologies and business models to improve their daily lives.

"Traditional stores [will have] been repurposed, distribution models massively transformed, and manufacturing and sourcing [will have] shifted," Jacobs continued. Consequently, companies will play a different role in society, as the "current value chains are profoundly disrupted."

The industry, Jacobs explained, will transition away from linear, sequential value chains—where products are transferred through sourcing, manufacturing, distribution, and retailing to the customer—toward a new model. Companies will have to craft their operations around consumers, working to provide them with new flows of information, products, and transactions. "Consumers [won't] just buy stuff," Jacobs said. They will be at the center of these networks, as they "pull the strings...on their dynamic paths to purchase."

The new value chain, Jacobs said, is about catering to "the quality of living for individual consumers in their communities," as well as their desires for convenience and well-being.

Jacobs pointed out that to accommodate a hypothetical aging customer named "Maureen," for instance, players in the retail industry, as well as pharmacies, technology companies, insurance outfits, and other innovators, will have to work together to make her life as comfortable as possible. "Retailers need to develop new offers and collaborate with partners; they need to share information," Jacobs said, and seamlessly complement that aging person to take care of her beyond traditional boundaries.

Jacobs outlined some keys for success in this new marketplace. "Companies need to provide relevant experiences to consumers that will focus on the context of their lives." They will need to remove the constraints in their operations and take advantage of business models enabled by new technologies. Among these are new means of transportation, like drones or driverless vehicles; 3-D printing devices; augmented reality; and Big Data analytics. To cultivate long-term growth, companies should be focusing on sustainability, transparency, and gaining trust.

And the industry, too, will need to set higher standards, because at the moment companies are underperforming in key areas such as "transparency...tech-enabled business agility, and consumer engagement." Engagement levels are weak partly as a product of low trust and customer concern about potential data breaches. Naturally, these customers hesitate in the face of mobile location tracking and the sharing of information. "It's becoming important for the industry to take responsibility and protect the ability to add mutual value for consumers," Jacobs said.

The CEOs from 50 of the world's largest consumer goods and retail companies who serve on CFG's board of directors agreed on a set of principles, among them simplicity, a fair value exchange, transparency, control and access, protection of personal information, a true consumer dialogue, and integrity on social media, Jacobs said.

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