Executive Briefings

'Digital World' and 'Fight for Resources' Are Megatrends Affecting Future Value Chain

A report from he Consumer Goods Forum and Capgemini calls for the consumer goods and retail industries to meet head on challenges posed by increasing digitalization and the availability of resources.

The report, Future Value Chain 2022: Industry Initiatives Address Challenges of the Digital World and the Fight for Resources, is the latest installment to be issued in the Future Value Chain program, which was established over the past 7 years with a focus on extensive industry research and analysis. More than 200 executives from some of the leading consumer goods and retail organizations worked together as part of the program to focus on how, through a set of collaborative initiatives, the industry can continue to bring benefits to consumers.

"We identified the two key megatrends of "˜Digital World' and "˜Fight for Resources' as likely to have the greatest impact on the consumer goods and retail industry in the coming 5 to 20 years," said Thomas Storck, Merchandising & Multi Channel Retailing Officer, Galeria Kaufhof, and co-chair of the Consumer Goods Forum's Emerging Trends Steering Committee. "Digitization is changing consumers' lives and shopping behavior. At the same time, global demand for resources like food, water and energy is rising rapidly with the potential for demand to outstrip supply in the next decade. The industry must work together to develop concrete milestones to respond to these megatrends and build an action plan to move these from theory to reality."

Three initiatives address the megatrends and highlight the need for swift action:

Consumer Engagement Protocol: This initiative is designed to address the changes being witnessed in consumer behavior. The potential power of user-generated and social media technology platforms to disrupt established institutions and the associated brand equity is undeniable. However, there are opportunities to connect directly with consumers as shoppers look for improved transparency in digital channels. At the same time, there is an inherent need to mitigate risks from privacy invasion. Increasingly, companies recognize the requirement to be proactive versus being regulated in this area, but currently there is no voluntary global commitment concerning this in the consumer goods and retail industry. The project is focused on establishing guidelines for digital engagement with consumers.

"¢ Next-Generation Product Identification: Today, in a world of rapidly expanding online commerce solutions, barcodes are unable to provide companies and consumers with the rich digital product information they seek. Consumer barcodes do not uniquely identify product or package variations that carry the same product identifier, meaning minor product variations cannot be accurately disclosed. This initiative focuses on connecting the dots to improve supply chain transparency, efficiency and traceability. The goal is to provide the industry and the consumer with accurate product information by using new technology capabilities for product identification to replace the current barcode.

"¢ Sustainable Packaging Coalition: This potential initiative is designed to establish a coalition of companies to work together on non-competitive topics to improve the sustainability of packaging across the different value chain stages. The focus of potential activities will be around the three R's of packaging and packaging components: Redefine, Reduce and Reuse.

"The industry is at a critical tipping point and must ensure its future by implementing these initiatives to drive innovation. Success is hard to quantify but we must focus on collaboration and non-competitive improvements that will protect consumers and the vital components that will create one of the most innovative and forward-thinking sectors," said Sabine Ritter, executive vice president, Strategy, Industry Initiatives, Strategic Alliances at the Consumer Goods Forum.

Click here to access the full report.

The Consumer Goods Forum brings together the CEOs and senior management of more than 400 retailers, manufacturers, service providers and other stakeholders across 70 countries and reflects the diversity of the industry in geography, size, product category and format.

Source: Capgemini, Consumer Goods Forum

The report, Future Value Chain 2022: Industry Initiatives Address Challenges of the Digital World and the Fight for Resources, is the latest installment to be issued in the Future Value Chain program, which was established over the past 7 years with a focus on extensive industry research and analysis. More than 200 executives from some of the leading consumer goods and retail organizations worked together as part of the program to focus on how, through a set of collaborative initiatives, the industry can continue to bring benefits to consumers.

"We identified the two key megatrends of "˜Digital World' and "˜Fight for Resources' as likely to have the greatest impact on the consumer goods and retail industry in the coming 5 to 20 years," said Thomas Storck, Merchandising & Multi Channel Retailing Officer, Galeria Kaufhof, and co-chair of the Consumer Goods Forum's Emerging Trends Steering Committee. "Digitization is changing consumers' lives and shopping behavior. At the same time, global demand for resources like food, water and energy is rising rapidly with the potential for demand to outstrip supply in the next decade. The industry must work together to develop concrete milestones to respond to these megatrends and build an action plan to move these from theory to reality."

Three initiatives address the megatrends and highlight the need for swift action:

Consumer Engagement Protocol: This initiative is designed to address the changes being witnessed in consumer behavior. The potential power of user-generated and social media technology platforms to disrupt established institutions and the associated brand equity is undeniable. However, there are opportunities to connect directly with consumers as shoppers look for improved transparency in digital channels. At the same time, there is an inherent need to mitigate risks from privacy invasion. Increasingly, companies recognize the requirement to be proactive versus being regulated in this area, but currently there is no voluntary global commitment concerning this in the consumer goods and retail industry. The project is focused on establishing guidelines for digital engagement with consumers.

"¢ Next-Generation Product Identification: Today, in a world of rapidly expanding online commerce solutions, barcodes are unable to provide companies and consumers with the rich digital product information they seek. Consumer barcodes do not uniquely identify product or package variations that carry the same product identifier, meaning minor product variations cannot be accurately disclosed. This initiative focuses on connecting the dots to improve supply chain transparency, efficiency and traceability. The goal is to provide the industry and the consumer with accurate product information by using new technology capabilities for product identification to replace the current barcode.

"¢ Sustainable Packaging Coalition: This potential initiative is designed to establish a coalition of companies to work together on non-competitive topics to improve the sustainability of packaging across the different value chain stages. The focus of potential activities will be around the three R's of packaging and packaging components: Redefine, Reduce and Reuse.

"The industry is at a critical tipping point and must ensure its future by implementing these initiatives to drive innovation. Success is hard to quantify but we must focus on collaboration and non-competitive improvements that will protect consumers and the vital components that will create one of the most innovative and forward-thinking sectors," said Sabine Ritter, executive vice president, Strategy, Industry Initiatives, Strategic Alliances at the Consumer Goods Forum.

Click here to access the full report.

The Consumer Goods Forum brings together the CEOs and senior management of more than 400 retailers, manufacturers, service providers and other stakeholders across 70 countries and reflects the diversity of the industry in geography, size, product category and format.

Source: Capgemini, Consumer Goods Forum