Emerging Trends Program China Summary

Transcription

1 Emerging Trends Program China Summary June 5 th 2013 Christian Requena, Accenture, Shanghai Christian.Requena@accenture.com 1

2 Agenda Topic Emerging trends program introduction Key survey finding Implications of emerging trends Next steps Accenture point of view on emerging trends Time 2 min 3 min 12 min 5 min 8 min 2

3 Emerging trends program introduction Objective Identify emerging trends that will impact the Consumer Goods and Retail industries Publish report outlining Trends that will shape the Asian CPG landscape ECR to develop programs to prepare members to capitalize on these trends Trend long listing Approach Survey Exploration workshops: Singapore / Shanghai / Mumbai Report 3

4 Key survey findings Top Trends Now and in to 5 years Top trends: awareness of health issues, increasing digital lifestyle, shift in income levels, more informed consumers, environmental sustainability and an aging and active emerging society that can not be ignored Awareness of Health Issues Increasing Digital Lifestyle The Shift in Income Levels More Informed Consumers The New Consumer Environmental Sustainability Increased Urbanization Scarcity of Talent Increasingly Ageing Society Trends in 5 Years Trends Now

5 Shanghai workshop discussion outcomes 6 trends were discussed in Shanghai s workshop Trends Characteristics Implications Examples Increasing Digital Lifestyle Shift in Income Levels Awareness of Health Issues& Increasingly Aging Society Changing Retail Environment Environmental Sustainability Scarcity of Talent Online stores Social Medial Opportunity for premium products Shop less, but with bigger basket Traditional channel Different middle class Shifting of population structure More active life style for aging people Healthcare issue Smoking problem Modern trade grows fast Retail expansion slows Purchase way change Local players grow faster HQ manage local store Demand for environmental products, but not willing to pay more Environment sustainability company culture Long term sustainability growth High turnover of talent Eager to personal growth Cultural conflict High economical rewards attractiveness Local leaders go abroad for expertise Online business Logistic cost Fake/inferior products Social media Favor brand image products Higher shopper expectation Key shopper identification Silver economy More market opportunities More nursing houses Serve multi channel Low tier city penetration New product launching agility Visibility and effectiveness challenge Product differentiation Company margin risk Customer shopping behavior change Communicate environment sustainability value to consumers Rise the labor cost More recruitment/training cost Promote automation in China Succession plan Preparing incentive plans Taobao: Both an ecommerce and a BBS L'Oreal and Nestle build ecommerce New business model: B to B/C to C Skin care product is popular Logistic network and effective supply chain Different portfolio for different stores in colgate Mobile phone for aging people Special travel groups for aged consumers Nestle provides special milk products for aged consumers Macdonald s change based on geographic Unilever education campaign Wal-Mart E-commerce use offline store as warehouse Coca s online sale with Number1 store Unilever create sustainability KPI s Coca reuse recycle water Starbucks help clean communities Red apple GS1 Case code usage Incentive plans Automation plans Note: Health Issues and Aging Society are combined together for discussion because of similarities 5

6 Overall implication of Asia emerging trends Organizations are learning to act upon identified emerging trends levering the power and speed of new technologies and getting support across the different departments to respond appropriately with renovated strategies and Route to market Trends For Manufacture For Retailer Increasing Digital Lifestyle Shift in Income Levels Awareness of Health Issues Changing Retail Environment Environmental Sustainability Utilize online presence Produce innovative products Target entry level consumer Focus on healthier products Educate consumers Invest in traceability Focus on product portfolio Focus on supply chain Build long term sustainable growth Maintain margins Utilize online presence Keep wider product range Multiply retail formats Focus on aged consumers products Lead to increased competition Carry more eco-friendly products 6

7 Next steps Based on the survey, ECR should develop programs and prepare members to capitalize on top 4 trends: 1) Increasing Digital Lifestyle; 2) The New Consumer; 3) Environmental Sustainability; 4) Awareness of Health issues and add initiatives around the information society as this is missed Increasing Digital Lifestyle The New Consumer Environmental Sustainability Awareness of Health Issues Trends ECR should focus on More Informed Consumers Increased Openness of Data

8 Accenture point of view on emerging trends Trends ecommerce and channel explosion Rising middle class beyond developed urban areas Increasing retail sophistication likely concentration Rising brand appeal not so much recognition or loyalty Accelerating shift from traditional marketing to digital marketing and social media Data explosion and analytics potential Growing margin pressure/risk on lower tier/mass product segments Mobility becoming the norm not the exception Social media becoming a major driver of influence/opinion War in Store Gaining Visibility and Increasing Performance at Store Level Pain Points Addressed Lost Sales Due to Out of Stocks Poor Execution of Distribution Activities Inefficient In-Field Activities Inefficient Route Planning Growth of Trade Spends Lack of Visibility to Product Data & Supply Chain Spend Priorities War in store Multi-channel strategy and enablement Digital brand building and listening Mobility Technology at speed as key enabler How are these challenges being addressed? Perfect Store Capabilities & Improved Data Management Strengthened Integration with Top Tier Distributors End-to-End Sales Force Performance Management Trade Promotion Management Wholesaler Management Point of Sale & Cost to Serve Analytics 8

9 The art of winning the Chinese consumers penetrating the lower tier markets China consumers market background Six Capabilities to distinguish the leaders from the rest Lower-tier cities and villages are the new consumer battle grounds. They are the frontier for high performance Fierce competition for consumers Growing demand for products and services Faster disposable income growth rate Favorable opportunities Geographica l advantages Engage local government and social communities as partners Introduce innovation to the 4th P (Product) Build up sales skills in new territories Country s fast pace of urbanization Three types making the move to reach Tier 3-5 markets: Advanced Pioneers, Explorers And Observers Harmonious relationships Invest in supply chain & distribution infrastructure Fuel growth with highquality and timely data Find new roads to customers 9

10 The Seamless Consumer is a Global Phenomenon Today s non-stop customers expect to shop without barriers throughout a multi-channel journey. At the geography level, there are many similarities and some differentiation in consumer expectations of a Retailer s seamless capabilities North America Europe APAC Like to shop online (Apparel) 52% 54% 70% Like to shop mobile (Apparel) 11% 13% 24% Like to shop physical store (Apparel) 86% 82% 80% Showroomed at least 1x in last 6 months 73% 74% 85% Flexibility to pay anytime / anywhere, using cash, credit, or other is Important / Very Important Same day delivery rated important or very important % Who think integrating stores / online / mobile is where retailers need to improve shopping experience most 77% 70% 65% 24% 35% 38% 49% 49% 38% 10

11 Customer Experience Must be seamless across brick and mortar, online, mobile, social and other emerging channels. Operations Must be seamless in terms of buying, placement and promotion of merchandise, having inventory visibility, developing pricing strategies, and managing metrics and incentives across channels. Platforms Must be seamless as new disruptive technologies such as mobile, social, cloud, big data, etc. come into play. Partners Becoming Truly Seamless Requires Transforming All Aspects of How a Retailer Operates Seamlessness - the ability to deliver a consistently personalized, on-brand experience for each customer at every touch point, any time, anywhere - is plainly a tall order for most traditional retailers Retailers cannot deliver a seamless customer experience alone. Technology, Data, Analytics and Process partners will become equally as important as merchandise vendor partners

12 Thank you 12