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Author
Elli Vlachou, Customer Centric Transformation, PwC Switzerland
Even before COVID-19, smart consumer goods companies were realising the crucial importance of offering their customers outstanding experiences. The pandemic accelerated this development almost from one day to the next. It has also hugely magnified the importance of addressing consumers’ ESG concerns. In this article, with the holiday season approaching, we briefly look at what paying special attention to customers means for consumer goods industry leaders across the globe – and how it can help you stay ahead in uncertain times.
PwC has published a report in collaboration with the Consumer Goods Forum this summer, called What’s next: How consumer goods leaders envision tomorrow. It talks to consumer goods industry leaders across the world about what they learned in the course of responding to the immediate challenges of COVID and how this has changed their views of what success will involve in an increasingly uncertain operating environment.
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Consumers have made what’s probably a permanent shift to more online shopping for groceries and other goods. The concept of the store is evolving. Technology will be key in combining the best of physical and online to create omnichannel stores and enable hyperpersonalisation. Interestingly, though, technology is the means rather than the end: ultimately it’s about creating smooth experiences as customers move between online, mobile and bricks and mortar.
With consumers’ health, environmental and social awareness on the rise, the future of food will be more sustainable, more local and more personalised. Customers are demanding greater transparency on product origin and quality, and companies and the producers that supply them will be forced to deliver this transparency all the way ‘from farm to fork’.
COVID-19 ruthlessly revealed the vulnerability of the supply of goods – making this an issue of direct relevance to consumers – and underscored the urgency of resilient, transparent, sustainable and digital supply chains. Companies have had to completely reassess their global supply chains. Technologies such as blockchain and artificial intelligence will be key to enabling transparent, flexible supply chains.
Consumers – especially younger, more socially aware people – are increasingly attuned to what brands stand for and expect them to deliver on their promises. Consumer goods companies will have to understand trust and communicate their values and beliefs. But communication alone isn’t enough: to retain loyalty among well informed consumers, companies will have to nurture their brand carefully and consistently.
ESG, including issues such as climate, racial and social justice, political matters and diversity and inclusion, is increasingly recognised as a key driver of corporate value. Many consumers will only give their custom to businesses that credibly address these issues. But ESG is also firmly on the radar of corporate stakeholders and investors. Consumer goods companies will have to make ESG an intrinsic part of the way they do business.
«Among the five global macro developments mentioned above, three trends are of particular importance to industry leaders in Switzerland: creating the ‘store of the future’, preparing for the sustainable future of food, and increasing brand relevance.»
Creating the ‘store of the future’
The OECD predicts that Switzerland will get back to pre-pandemic levels of GDP per capita in the course of 2022. Pop-up stores, collaborations, eventing, personalisation, and omnichannel in-store journeys are just a few ways to offer customers a premium experience and help brick-and-mortar stores to modernise and survive. Thereby, offering different and easy payment options at the point of sale is key. Furthermore, data and environmental safety is at the top of shoppers’ concerns. Thus, providing transparency and relevant information at the point of sale helps increase conversion rates, especially among older shoppers. As most Swiss shoppers browse online before going to a physical store and given the huge online offering, it is increasingly difficult to create a shopping journey that ends in the physical store. In-store premium experiences based on additional services such as tailoring, education, recipes, and online bookings result in a seamless omnichannel experience.
Preparing for the sustainable future of food
Looking at the Swiss offering in all major food retailers, most of the offered products are fair trade, half of the local products are resource-friendly (IP-Suisse), and almost a quarter of the purchased fresh food is certified organic. Furthermore, shoppers increasingly demand reusable packaging, which is cited as one of the most frequent reasons to upsell. Swiss online retailers are also trying to optimise their shipping process and make it environmentally friendly. Unfortunately, only a small number of retailers are considered to do enough. This could be due to lack of options, lack of visibility, or lack of education during the shopper’s journey. While half of Swiss online shoppers also buy products abroad, preference for local origins varies per category. Popular categories for sales abroad are electronics and fashion, while food is predominantly bought locally.
Driving brand relevance
Swiss brands represent quality and luxury. Swiss shoppers expect top service, personalised experiences, and strong values from every brand they interact with – from luxury goods to groceries. Even well-established brands like Coca-Cola and Knorr have introduced the ‘Swiss made’ logo on their fast-moving consumer goods portfolio to portray their local values. For the past decade, the retail giants Coop and Migros have been voted amongst the most valued and trusted Swiss companies every year by GfK (https://www.gfk.com/de/home), and their performance hasn’t slowed after the aggressive expansion of the German discounters Aldi and Lidl in the Swiss market. Coop and Migros provide personalised offers based on past purchases to increase shopper loyalty; however, although more than 50% of Swiss shoppers use a loyalty card once a week, they don’t cash the points they collected.
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Partner, Leader Sustainability Tech & Data, PwC Switzerland
Tel: +41 58 792 47 97
