Want to survive the economic downturn? Get consumer-centric. That's the message from a new survey of retail leaders and product manufacturers that are ensuring the customer is always right.
DemandTec, Inc., a provider of on-demand optimization solutions for retailers and consumer products manufacturers, and Precima, Inc., an advanced analytics firm that translates retail customer data into insights, recently released the findings of a survey measuring how retailers and consumer products manufacturers use consumer-centric data and analysis to drive their businesses.
The survey, conducted by IDC Global Retail Insights and titled "Being Consumer-Centric: A Retailer and Manufacturer Update," shows companies are seeing benefits from the concept, but more opportunities are available. Consumer centricity was defined in the survey as any strategy for which an organization uses shopper data to develop insight as a driver for decision-making.
"This survey confirms that retailers and consumer products manufacturers have become more consumer-centric for several years and are serious about committing to this type of initiative," said Marc Dietz, vice president of marketing at DemandTec. "Given the difference between top-performing retailers and the rest of the pack, it is interesting to see the tremendous opportunity for additional investment and improvement."
Among the key findings of the IDC Global Retail Insights survey are:
- Most retailers (75%) and consumer products manufacturers (58%) rank consumer centricity as a top 3 success factor
- 80% of retailers and 67% of manufacturers expect an increased focus on consumer centricity in 2009
- Manufacturers need to work on leveraging consumer insights across the organization with only 43% indicating their ability is better than satisfactory, compared to 64% of retailers
- The limited availability of team resources is the largest impediment to consumer-centric success for both retailers (37%) and manufacturers (43%)
- Lack of support and executive sponsorship is no longer a significant barrier for retailers (16%) with more than 75% retailers appointing a senior consumer-centricity role
"As expected, this research clearly demonstrates a continued trend toward consumer-centricity as a critical business strategy. What is surprising, however, is that we find that many of the core obstacles - such as limited team resources - are unsolved as barriers to success," said Brian Ross, general manager, Precima. "This is a clear call to both retailers and manufacturers that getting the fundamentals in place, including the right data, the right people and the right tools is critical to a winning consumer-centric strategy."
"Overall, the research shows that while both retailers and manufacturers have taken steps to incorporate consumer centricity into their strategic and tactical activities, there are still many untapped opportunities. By dedicating the appropriate people and technical resources, retailers and manufacturers will create points of differentiation in their product offering that will retain existing consumers and attract new ones," said Leslie Hand, research director, IDC Global Retail Insights.
Additional key insights for Retailers and Manufacturers:
- Manufacturer high performers clearly use consumer insights more frequently for demand planning/forecasting (80%) compared to the norm (49%)
- Retailer high performers use consumer insights more frequently in sales/merchandising (80%) compared to the norm (60%)
- High performer retailers are motivated to share data to strengthen trading partner relationships (53%) compared to the norm (24%)
Survey Methodology:
The sample consisted of 120 respondents, including 55 retailers and 65 consumer products manufacturers. Respondent roles were director level and above. The survey was conducted through online and telephone interviews. Top performers in each group were defined as those having annual same store sales growth of at least 7% (for retailers) and those within the top ten in the survey based on percent annual revenue growth (for consumer products and pharmaceuticals). Outliers were discarded to maintain data integrity. Data is accurate within 90% confidence level and 10% confidence interval.
The complete survey can be downloaded here.