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Market Views
Consumer Packaged Goods
Market Views

## Highlights

- >1 bn new consumers by 2020 spending $10 – $100 per day
- Generation Y will spend $65 bn on CPG over the next decade
- 80m Generation Y consumers shop differently
- By 2025, 50% of retail purchases will be mobile
- Consumer demand for variety and authenticity
- Digital is driving innovation in delivery models
- Brand loyalty is declining in food, beverage & household goods
- 3D printing will create new business models

## Digital Journey

CUSTOMER EXPERIENCE
  Today’s consumers readily use their mobile device for taking pictures, comparing prices, finding coupons and accessing detailed product information, along with the peer reviews and recommendations that have a greater impact on their choices than traditional marketing.
BUSINESS REINVENTION
  To increase brand loyalty, manufacturers need to focus on providing the consumer with value-added services. Their ability to inspire consumers to use their products in new ways and deliver innovative services that add real value, drive loyalty and deliver insight will be critical to their future success.
OPERATIONAL EXCELLENCE
  Satisfying market demands anywhere and at any time is now a key differentiator. Brand manufacturers, retailers and partners are exploring how to align and share information while demand-driven supply chain management minimizes inventory levels and reduces stock outs.
TRUST AND COMPLIANCE
  Collaboration and cooperation across the supply chain is becoming increasingly important for satisfying regulatory requirements and demands for transparency from retailers and consumers. CPG companies need to be able to track and trace products all the way through.

#### Thomas Collins

Senior Vice President, Global Market Head Consumer Packaged Goods

> Brand manufacturers must be present at every step of the buying process, engaging consumers through relevant and inspiring content while they’re both learning about the product online and experiencing it in the store.

Technologies in the Digital Journey
Technology | x | y | x (phone) | y (phone) | Impact | Range | Section | Keys | Description
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
Augmented reality | 83 | 37 | 80 | 70 | Adolescent | 2017 | Low | experience,excellence | Augmented reality provides detailed information on the customer they’re assisting and the products they’re interest in. This information may be displayed in an employee’s line of sight through augmented reality glasses.
Advanced robotics | 56 | 60 | 65 | 51 | Emerging | 2019+ | Medium | excellence | Advanced robots work side-by-side with humans, but on tasks that require high levels of dexterity and precision: on components too small for humans to handle. Enhanced sensing and AI capabilities allow them to work autonomously inside the factory, automatically tailoring goods to meet the increased personalization customers are demanding.
5G networks | 36 | 40 | 45 | 45 | Emerging | 2019+ | High | business,excellence | Customers are taking advantage of low power, low latency, extended range 5G networks to access the information and services whenever they need them.
3D printing | 41 | 10 | 40 | 20 | Emerging | 2018 | Transformational | experience,business,excellence | New 3D printers allow some products to be printed within the store. A customer might customize a pair of shoes at home and then collect the finished product from the store an hour later, for example. 3D printing is increasingly being outsourced to specialists who not only supply services across multiple brands but who are also increasingly offering delivery services. Customers can schedule prints of products from multiple brands and request that they’re delivered together to optimize costs.
Beacons | 81 | 12 | 50 | 40 | Early Adoption | 2016 | High | experience | As a customer enters a flagship store, for example, a beacon recognizes them and sends a trigger to the central control system to note that they’re in the store. Further beacons placed strategically around the store trigger targeted text messages offering personalized vouchers on the shopper’s smartphone or highlight items of interest that are currently on offer on screens in their line of sight.
Cloud Service Integration | 47 | 35 | 49 | 35 | Adolescent | 2018 | High | excellence | Leading manufacturers have moved towards integrated manufacturing, which enables information transparency and collaboration between MES / MOM, ERP and PLM systems, to accelerate time to market. This vertical view along the value chain becomes increasingly critical as product lifecycles shorten and the continuous evolution within product releases accelerates. Cloud Service Integration ensures tight integration between all these different cloud services, from the generation of ideas to the manufacturing of the product. Cloud-based federated identity governance will provide secure federated access to both operational systems and customer information across systems, between MOM, ERP, PLM and CRM systems.
Context-rich systems | 75 | 15 | 71 | 25 | Mainstream | 2017 | High | experience | These messages are highly contextual. They’re tailored to the shopper’s preferences and buying history, the current environments (such as the weather outside or local events) and where the shopper is standing in the store. Context-rich systems combine intelligence from diverse systems – from social media and purchase histories to weather forecasts and diaries of local events – to fully understand the shopper’s current context.
Edge computing | 66 | 47 | 70 | 60 | Adolescent | 2018 | Medium | excellence | Some CPG companies are also leveraging edge computing to both process relevant data more quickly and ensure scalability within the end-to-end integration. Indexing data close to the point of capture, for examples, lightens the load of centralized servers while making it highly accessible to the systems that need it soon after capture.
Geo-location technologies | 87 | 13 | 72 | 46 | Mainstream | 2016 | Medium | experience,excellence | Combined with geo-location technologies and radio frequency identification (RFID) tags, sensors ensure devices such as vending machines, fridges and other product displays are running well and haven’t been moved from their designated location. Diagnostic and location data is continually transmitted back to the central control room where an intelligent system alerts maintenance teams to issues as they arise. Any misplaced, or even stolen, machines can be tracked in real time. These technologies also allow brands to track and trace their products from factory to store.
Hybrid cloud | 93 | 6 | 85 | 20 | Mainstream | 2016 | Medium | experience,business,excellence | Cloud computing enables companies to use the in-depth intelligence derived from that data to deliver a seamless experience across all channels and locations. No matter where the customer engages with a brand, or where an employee or partner is working from, the systems that they interact with and the data these systems use will be the same. Hybrid cloud then allows companies to augment their own omni-channel services with relevant third-party services – such as news on trends, hints and tips or even weather forecasts – further enhancing the experience.
Internet of Things | 65 | 5 | 64 | 15 | Early Adoption | 2017 | Transformational | experience,business,excellence | By connecting devices, people, processes and information, the Internet of Things (IoT) has opened up the opportunity to deliver a compelling experience, the likes of which have never been seen before. Real-time data gathered from social media, smart devices, wearables and more gives brands a great deal of insight into their customers’ needs, desires and behaviors.
Machine-to-machine | 84 | 9 | 65 | 30 | Mainstream | 2016 | High | excellence | Two way machine-to-machine (M2M) communications allow shelves or vending machines to manage their own stock. Stock levels are automatically transmitted to a central control room in real time, where advanced analytics assess requirements and schedule any deliveries needed into an optimized schedule.
Near Field Communications | 91 | 9 | 78 | 30 | Mainstream | 2016 | Medium | experience | When they require more comprehensive information they make their way to a brand store where Near Field Communications (NFC) has become the norm for tapping into product details.
Prescriptive analytics | 54 | 26 | 60 | 30 | Adolescent | 2018 | High | experience,excellence | Brands are turning to prescriptive analytics to help deliver a highly personalized customer service, whatever the channel. This advanced analytics examines each individual customer’s preferences, purchase history, sentiment on social media accounts and more before presenting relevant recommendations or offers – whether on a web page or even as a text message. At a higher level, it’s also helping brands decide when to cut prices and how to optimize stocks across different regions or even stores in response to changing environments. For example, it’s helping them optimize beer or ice cream stocks as weather conditions change.
Privacy-enhancing technologies | 70 | 31 | 60 | 60 | Adolescent | 2017 | Medium | trust | As customers share more information with brands they will expect their information to be well protected and not shared with third-parties without their permission, for example. Privacy-enhancing technologies (PET) control the disclosure of data, helping CPG companies manage privacy risk by ensuring compliance with data protection legislation and regulation.
Semantic technologies | 63 | 36 | 65 | 50 | Adolescent | 2018 | Medium | experience,excellence | Companies are gathering data from right across their value chains – from their operations, suppliers, logistics partners and retailers as well their customers and the product itself – to help them build the intelligence that is improving efficiency and decision-making as well as enhancing customer experience. Behind the scenes semantic technologies help these intelligent systems to understand the relationships within and across data.
Sentiment analytics | 94 | 21 | 90 | 30 | Mainstream | 2016 | Low | experience | Brands have employed social media and network analytics to understand general customer issues and desires for some time. Its sentiment analytics allows them to quickly identify and respond to individual customer’s gripes and any other reputation-damaging sentiment. They’re now also leveraging it to gather intelligence on individual customers.
Wearable computing | 69 | 15 | 55 | 30 | Early Adoption | 2017 | High | experience | Brand employees in stores can access vital intelligence hands-free through modern wearable devices. These wearable devices infuse insights with the real-world, blurring the lines between digital and physical.

Radar View

BUSINESS IMPACT
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Click on the radar points to see technologies details
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Highlights
Key Market Challenges
CUSTOMER
EXPERIENCE
BUSINESS
REINVENTION
OPERATIONAL
EXCELLENCE
TRUST AND
COMPLIANCE
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