Digital Transformation: Analog to Digital

Analogue to Digital: Consumer Goods Trends

Copyright © 2013 Accenture All rights reserved. 2

Agenda

What the future holds for the

consumer goods industry

The journey to a digital operating

model

How to transform to a digital

operating model


What the future holds in consumer goods

In Emerging Markets

1 billion new consumers

• New drive for localized products and choice

• Newly affluent emerging market middle class

• Newly urban populations as new consumers

In Developed Markets

Mature markets seeking value

• Growing cash-strapped segment of consumers

• Greying urban population living longer, healthier lives

• Green consumers seeking sustainable options

In The Digital World

An entire generation of consumers has grown up on digital / social media

• Low-cost connected devices are widely available to consumers worldwide

• The rise of multi-channel buying is dramatically changing the consumer experience

• Consumer expectations for products and services are at an all time high


More than 720 million Africans have phones, some 167 million use the Internet, and 52 million are on Facebook

Africa is undergoing a digital

revolution…

..with consumer becoming more

connected to a global marketplace

Egypt

13 010 580

Kenya

1 886 560

South Africa

5 534 160

Nigeria

5 357 500

Ghana

1 465 560

Algeria

4 322 820

Tunisia

3 436 720

50 386 760 African Facebook Users

D.R Congo

891 140

*source: www.socialbakers.com

Africa is going Digital

167m

Internet users in

2012

600m

Internet users in

2025

67m

# of smartphones

in 2012

360m

# of smartphones

in 2025


In Africa new consumers and digital are happening at speed and simultaneously

Retailers will need to open 15

million outlets by 2015 to reach

these new consumers or connect

online

Millions of first time consumers are

there to become loyal to brands

Emerging and developed market

consumers are going digital and social at

the same time

Leveraging

digital

technology is

the only way it’s

economically

viable to

compete and

win in this

environment


Converging Moments of

Truth Digital blurs the distinction between

“selling” and “marketing”. Increasingly

even off line purchase is proceeded by

points of search to drive purchases.

The digital world is driving dramatic industry disintermediation

Monologue to Dialogue Traditional analog media are one way.

Digital is all about engagement and

interactions leveraging huge amounts

of data to be relevant.

Extended Enterprise Digital is changing the way CPGs

manage their whole ecosystem

beyond the enterprise – suppliers,

distributors, retailers are all connected

Retail Revolution Smaller formats emerging in developed

markets and remains key in emerging

markets. New consumers may leap frog

brick & mortar retail. New digital retailers

emerge – merchandising and

promotions will be different.

Reinvent Product Marketing It does not work digitally. Product ranges

should expand exponentially as physical

store constraints disappear and

customization becomes possible.

Focus on Individual Consumer, influencer, shopper,

employee – they are all digital and

expect specific attention


This digital revolution has become a launch pad for a new generation of digital entrepreneurs

Digital Case Studies

Jumia Paga moWoza

The rapid growth of

Jumia.com has seen it

emerge as arguably the

country's number one online

shopping portal

The site controls 70 percent

of the online retail market in

the country and has serviced

about half a million

customers in its over one

year of existence

moWoza is a mobile phone

marketplace platform that

allows informal cross-border

traders to access price-

related information and an

order and pre-pay inventory,

and to receive delivery

status notifications and

access credit on their mobile

phones

Paga allows its users to

transfer money to anyone via

a mobile phone or other

internet connected device.

According to the Paga

website, its service is

currently being used by over

57,000 Nigerians. The

company has a grand

ambition to serve 40 million

users by 2015


And the impact is significant for consumer goods companies

Boundaries between the traditional

participants will continue to blur

Manufacturers will become retailers,

distributors and media owners

Shoppers will drive product design

and development


Industry trends have influenced the development of consumer goods companies over the last two decades

Global reach, billion dollars brands and global capabilities have

been the targets for the past decade

The alignment and synchronization of the enabling capabilities and

a sustainable business case along the transformation have been

key elements of the Operating model evolution

The journey defined winners and losers (growth, M&A, profit).

Different speed and navigation paths were followed.

Generally this transformational journey has been associated with

increased earnings and profitability - more than double digit growth

in earnings in every year since 1995. However earnings have

outpaced sales growth in all but the last two years.

They have been on a journey from their

local roots to become global giants.


And now it is time to evolve to a digital operating model

Scale

Reach

Margin

Leverage

Increase

Profitability

Double Size

of Business

Local Regional Global Super Global/

Super Local

Digital

Disintermediation

Fluid

Business & Operating Model

Autonomous

Market

of One

Improve Margins

Through Cost

Reduction

En

ab

lin

g C

ap

ab

ilit

ies

Global trends

provide

opportunities.

Economics drive

change, and each

operating model

change delivers a

competitive

advantage.

Where We Have Come From Where We Are Going

Global

Economy

WTO

New

Consumers

Digital



Super Local

Digital

Disintermediation

Fluid


Pro

cesses &

Technolo

gy

Capabilities have to evolve to support the journey to a digital operating model

En

ab

lin

g C

ap

ab

ilit

ies

First

Movers

Some

Companies Most of

the Industry

Few and

Far Between

Very Few

Companies

None

Interactive

Real Time

Consolidated

Archetypes

Fragmented Ba

ck-e

nd

Pa

ck

ag

e

Dri

ve

n

Fro

nt-

en

d

Pro

ces

s

Dri

ve

n

Re

lati

on

sh

ip a

nd

Ex

pe

rie

nc

e

Dri

ve

n

CPG Push Ecosystem Leverage Consumer Pull



Super Local

Digital

Disintermediation

Fluid

CPG Push Ecosystem Leverage Consumer Pull


Pro

cesses &

Technolo

gy

Interactive

Real Time

Consolidated

Archetypes

Fragmented Ba

ck-e

nd

Pa

ck

ag

e

Dri

ve

n

Fro

nt-

en

d

Pro

ces

s

Dri

ve

n

Re

lati

on

sh

ip a

nd

Ex

pe

rie

nc

e

Dri

ve

n

What’s made you successful in the past will not make you successful in the future

En

ab

lin

g C

ap

ab

ilit

ies

Command

Consensus

Top Down

Bottom Up

Ge

ek

Agencies

Big Bang

Leap Frog


Digital Disintermediation

Leading consumer goods companies will abandon geography as

a basis for organization and reorganize around archetypes for

route to market / retail and category /consumer types

Emerging Market

Challenge

End Of Dominance of

Bricks And Mortar Retail

Local Product

Marketing

Digital Media

Ownership

Local Sensing Mass

Customization

Centralized and

Decentralized Extended Enterprise

…will involve a fundamental rethink of corporate structures, customer

engagement, product development, supply chain, marketing and sales.

Leverage Brand

Global Product

Marketing

Global R&D

Centralized

Global Super Local

Evolving the operating model


It will revolutionize how consumer goods companies operate

Disrupt with a digital operating model!

Must be driven by your commercial business, not

IT department

Be deliberately digital. Move digital responses from tactical

to strategic.

Start with the consumer and work back

Not about digital marketing – about the digital enterprise

Integrated across the business

Geography is no longer the basis for management

and organization

Digital Transformation: Analog to Digital

Business

Transcript of Digital Transformation: Analog to Digital