As consumers increasingly use new technologies and channels to guide their purchase decisions, consumer products companies have adapted omnichannel strategies to reach these customers directly, in addition to working through the retailer as in years past, according to a survey from SAP.
The vast majority (86 percent) of respondents agree that omnichannel has meant that customer and consumer expectations of the organization have increased, while the same percentage agreed that the benefits of investing in an omnichannel approach to consumer sales clearly outweigh the challenges.
The research indicated that innovation is the main focus for the next 12 months for 42 percent of consumer product companies.
"Social media is a critical component of any omnichannel strategy, as social media is, in and of itself, a channel for consumer products (CP) companies to engage and serve consumers," Mark Osborn, global lead for SAP’s consumer products industry marketing division, told eWeek. "And, unlike other channels, social media can either be a primary channel where consumers seek to interact with a brand directly through owned groups or a secondary channel where consumers interact with each other to share perceptions and impressions in response to their personal experiences with a product or service."
Osborne noted as a result, CP companies are increasingly leveraging social media monitoring to measure changes in consumer sentiment or brand perception in response to activities in the market, such as new product introductions, promotions, pricing, packaging changes or other events.
However, the survey also indicated the insights driven by consumer data are not widely applied for the purposes of innovation.
As a result of having a multi-channel strategy to sales, most companies say that their organization has experienced increased sales (74 percent), increased consumer loyalty or acquisition (64 percent), competitive advantage (62 percent) and better consumer experience (57 percent).
The survey data further suggests that simply operating a large number of channels is not a competitive strategy moving forward.
Rather, the key focus for consumer products companies now is to apply data gleaned from directly consumer interactions, through information inquires, online purchases, social engagement and more, to improve the consumer experience.
Just 16 percent of businesses say that they are currently meeting all business and analysis needs for consumer experience through multi-channel strategy.
The main competitive differentiators in the consumer products industry over the next two years are seen to be the quality of consumer experience (66 percent), integration of channels or omnichannel excellence (60 percent), consumer data and corresponding analytics (58 percent).
Just 51 percent of survey respondents said they think that the number of channels will be a main competitive differentiator.
Among those operating indirect channels, just one in ten said they intend to continue to operate without direct-to-consumer channels in the next three to five years.
The majority, on the other hand, either sell primarily through indirect channels but are making strategic investments in direct channel strategies (34 percent) or are selling through both direct and indirect channels while considering direct channels tightly integrated into their overall sales strategy (41 percent).
"As omnichannel strategies mature, companies will begin to assess how best to deliver compelling, timely, tailored and consistent consumer experiences directly to consumers across both physical and virtual channels," Osborn said. "This assessment will include highly developed segmentation strategies for defining the highest value channels for those consumers that companies most want to reach, engage and serve, as well as clearly defined targets associated with consumer perception and brand advocacy stemming from those experiences."