Product or Consumer: A Strong Vote for Consumer Data?
I am continuing my quest to get a balanced view of where Consumer Goods (CG) companies should invest their (potentially limited) budgets in developing meaningful consumer relationships. I had a very fruitful discussion with Kees Jacobs from Capgemini. Kees’ view that a focus on customer data is what should be top of this list was equally strong and immediate as another industry commentator on the importance of product data. Of course we are influenced by our personal environment and interactions, which is why I am speaking to our partner network in the first place (I feel my view is too limited by my environment). It also explains why two very knowledgeable and experienced people can have very different viewpoints.
Kees started our conversation by giving some context to his opinions, and it makes sense for me to do the same. He has recently finished a large piece of work where he was leading an engagement with the Consumer Goods Forum to rethink the entire consumer goods value chain. The report makes a very insightful read, and concludes that in the near future existing value chains will evolve to value networks with the consumer at the center. Kees sees these networks being developed for a specific reason, i.e. to create additional value: “The real value will come from being relevant in the context of somebody’s life, rather than hoping for a consumer to have a need.” He goes on to point out that even today the consumer is firmly in charge, and will become more so in the future.
This leaves CG companies (and retailers and other players in the service oriented consumer network) left with a large challenge. As Kees puts it: “CG companies must empower consumers, and be relevant and responsive to them.” Separate research by Capgemini and the MIT Center for Digital Business shows that many CG companies have achieved this in small pockets – but scaling up is always a huge challenge. Every company will have constraints and challenges in delivering these new business models while using existing system architecture, and in the face of ingrained organizational culture. Kees suggests that many companies can be seen as ‘Fashionistas’. They don’t truly organize digital engagement, but rather follow current trends. I would think it is also easier for these Fashionistas to show pockets of progress, before challenging the inherent constraints mentioned above.
With this background, it is clear why Kees feels strongly about the need to invest in consumer data. It’s not only because consumers will be firmly in the center of the value network in the future. The real trick is in the empowerment. Consumers are becoming increasingly aware of large corporations ‘mining’ their personal data, which raises concerns. Trust is further eroded when large scale data breaches make headline news – which is alarmingly frequent. In order to address issues of trust, and to ensure consumers feel they are truly engaging in a 2-way dialogue with companies, in how their information is stored, handled and used, The Consumer Goods Forum has agreed on 7 Consumer Engagement Principles. Kees summarizes these as being about “putting the consumer in control, simplicity and fair value exchange.”
This is where my concerns are raised. Based on my own experience, consumer data that most CG companies have access to is spread across multiple brands, systems and a number of agencies. I am not confident any of the CG companies I have spoken to in my professional capacity would have the capability to provide me a complete picture of what they know about me in my personal context. How they use my data would be a further challenge. I suspect it is next to impossible without me having to contact multiple different people who work for a variety of brands within the CG company – and then I would probably still be left with building the complete picture myself. In short, I personally don’t feel many (if any) CG could give me a level of trust that they empower me to manage my own data, and opt in or out of specific services that I consider a fair value exchange. Perhaps they could, but how they do this today would almost certainly violate the ‘simplicity’ part of the engagement principles. Thinking back to my conversation with my previous commentator, Devashis Senapat of Cognizant, he highlighted the fact that not many CG have managed to build a single view of a customer. So it appears I am not the only one sharing this concern.
There is clearly a lot of investment needed in this data set for CG companies to become relevant to consumers in the context of their lives. I find myself wondering if a CG company that is not in control of their own consumer data can ask, with a clear conscience, to be part of a consumer value network? By default these networks require some level of consensual data sharing. Who would want to invite a weak link into their network, which has a high potential of undermining the trust in the entire network? Kees makes a highly compelling case for an investment in consumer data capabilities.
After my first conversation, Product Data took a 1 – 0 lead on Consumer Data. On the surface, this conversation should square it up – but there is a twist. Having read the Rethinking the Value Chain report by Capgemini and The Consumer Goods Forum, I discovered two things:
- Kees’ name is on it as a primary contact.
- The report concludes three ‘strategic thrusts’, one of which is highly dependent on having high quality product data almost universally available.
I’m not going to write a spoiler here – if consumer and product data interest you, it is definitely worth reading the entire report. However, I am going to award product data 1/3 of a point for Kees tacitly supporting investment in this data set as part of a 3-prong strategy. (Even if we did not discuss it in depth during our brief conversation)
The score to date: Which data capabilities should CG companies prioritize?
Product Data: 1⅓
Consumer Data: ⅔