This was one of the assessment questions presented in “Succeeding in a Volatile Market—2018: The Future Value Chain”, a report published late last year by the Global Commerce Initiative (CGI), Capgemini, SAP, and HP. The report highlights several key trends that will impact CPG-Retail value chains in the near future, including a changing society (e.g., urbanization, ageing population, low income, and a new middle class); rising cost and scarcity of raw materials; increasing awareness and action on sustainability; and growing consumer access to technology, especially in Asia. The latter trend was one of the key topics that Deborah Lentz, Vice President Customer Service and Logistics, Kraft Foods Europe, highlighted last week at the CSCMP Europe 2010 Conference.
(I will write a more detailed posting about the conference in a few days, but considering all of the writing we’ve done the past year about the iPhone and the importance of mobile apps, I want to focus on mobile commerce today).
“Business will be mobile and supply chains have to respond,” Ms. Lenz stated. She talked about using mobile phones for ordering and payment, about consumers scanning items with their phones to comparison shop and obtain product details, and the growing use of mobile coupons. The iPhone, she said, has brought about significant change. In the United States, Kraft Foods launched iFood Assistant, an app that allows consumers to access recipes, create shopping lists for those recipes, locate nearby retail stores and receive alerts about special offers, and watch cooking videos.
Kraft Foods iFood Assistant (Click to enlarge)
As the CGI report underscores, Asia will likely lead the way in mobile commerce. Here is an excerpt from the report:
We can easily see Asian consumers, in 2018, having access to retail and consumer product information anytime and anywhere using any communication device. Without the legacy of 20th-century communication infrastructure, many of the Asian markets, particularly the developing markets, can leapfrog some of the hurdles faced by developed nations. We envisage, for example, the roll-out in Asia of ubiquitous, free, wireless broadband in urban centres.
To get to this position, great changes in the way we think about and share information will be needed. And consumers will need to develop trust in the information they receive.
The diversification of communication channels between both manufacturers and retailers and consumers (and shoppers) opens up the opportunity to develop uniquely personalised brand and retail communications. In fact, to do so will be essential by 2018 as existing mass-market communication channels will continue to decline in importance for a large share of our consumer base.
The technology-adept Asian consumers of 2018 will expect consolidation of marketing messages from the brands and the retail channel from which they buy the brands.
Last October, in “Mobile Internet and Supply Chain: Bigger Than Most Think,” I highlighted a presentation by Mary Meeker from Morgan Stanley where she discussed “8 Key Mobile Internet Themes.” One of these themes was “Next Generation Platforms (Social Networking + Mobile) Driving Unprecedented Change in Communications + Commerce.” What Kraft Foods is doing with iFood Assistant, and what the CGI report outlines, underscores this point.
I’ll end with the same words I wrote in October: Nothing happens overnight in supply chain management, so the opportunities created by mobile internet devices and technologies will likely take years to fully materialize. And of course, if there’s no strong business case, there’s no action or investment. But based on how quickly mobile internet and social network technologies are transforming the consumer world, I’m betting a similar transformation will occur in business and supply chain management.
