The changing nature of the consumer. The power of social influencers on buying behaviour. Sustainability. Corporate transparency. Localisation. The increasing role technology and innovation will play across the retail and consumer packaged goods (CPG) landscape. And of course, Brexit. These were the topics on the agenda when over 800 retail and consumer goods executives came together at the Consumer Goods Forum Annual Summit for three days in June.
Words such as 'transformative' and 'seismic' set the tone for the rate of change currently experienced by many retail and CPG brands. And all are wrestling with consumers who are changing much faster than the corporations that serve them. Corporations, meanwhile, are dealing with disruptive businesses such as Amazon, Zalando and Rakuten, and having to reinvent themselves to become more responsive to consumer demands.
Retailers and CPG brands are talking about changing from centralised to localised businesses to better serve micro geographies. They say the traditional segmentation model for marketing is 'dead', one-to-one marketing is now the goal and that customisation and personalisation at scale is on its way. And there's the desire for brands to serve consumers directly - a point made by Mark Schneirder, Nestle's CEO.
Amazon and Google both continued to show innovation leadership in shaking up customer experience norms. Whilst Amazon Go may have experienced some teething troubles, we were told it's now testing well and the technology's robust. Google's presentation focused on the power of AI (through their Deep Mind technology) to help brands curate much more personalised and 'on trend' decisions based on a complex mix of personal data and social trend information.
Ultimately, both delivered a clear message - the gap between 'new world' and 'old world' retail is stark. And perhaps this represented the biggest takeaway of all - tech companies are doing retail better than retailers.
Old world versus new world
When we look at Amazon acquiring Whole Foods, this represents a significant catalyst for change in the retail market. In effect, Amazon have completed the first 'reverse takeover' at scale in retail – a digital company acquiring a physical business. It could change everything.
And so big questions hung over delegates such as how do 'old world' retailers get even (let alone ahead) of their new world competitors? What's Amazon going to do with its new acquisition of Whole Foods? And how disruptive could this be? The truth is, no one had any hard and fast answers. Senior retail and brand leaders are clearly worried.
From my perspective, it's great to see the beginning of retail being disrupted. More by luck than design, retail has managed to side-step fundamental change in their business and operational models as other industries have recently experienced.
The hard question is whether retailers have the vision, culture and capability to change at a rate that enables them to stay relevant. It's a complex challenge that's forcing retailers to re-evaluate how they remain relevant as retail becomes a technology business. Ultimately, if 'necessity is the mother of all invention' then we should expect retail to represent a hotbed of innovation and creativity in the years ahead.
One lighter moment at the Summit came from Lego Chairman, Jorgen Vig Knudstorp. He spoke about how Lego have reinvented their business and put imagination back into the core of what they do.
Unbeknown to delegates, each had a small pack of Lego in the pocket of their seat and were challenged to make a duck from six Lego bricks in 30 seconds and share their creation with their neighbour. Each one was unique and I confess mine was particularly poor as I managed to put its head on backwards. But Jorgen's lesson was clear: "Lego is unique, because we (the creators) are unique. This is the purpose of Lego." A simple and powerful expression of a brand and their mission, which was received spectacularly well.
So it's clear the world retail and consumer goods now find themselves in is a fast-changing one. Are you ready?
On the changing state of the customer
On business change
On the Amazon difference