deloitte asia pacific webcast€¦ · new driving forces millennials are driving the demographic...

Deloitte Asia Pacific Webcast REsilience Series

RE-defining and Capturing the “NOW CONSUMER” to thrive in the Next NormalJuly 30th 13:30 – 14:30 (GMT+8)

2© 2020 Deloitte Asia Pacific Services Limited

WelcomeVivian Jiang Deloitte Asia Pacific Clients and Industries Leader


Poll Question: During the last 6 months, which part of your business has been disrupted the most?

A

B

C

D

Supply chain disruptions – 45%

Workforce management – 27%

Consumer engagement / retention – 37%

Business continuity and financing – 61%


Economic Briefing Sitao XuDeloitte China Chief Economist / Voice of Asia Leader

David RumbensDeloitte Australia Access Economics Partner

© 2020 Deloitte Asia Pacific Services Limited 5

Key messages:

• China’s second quarter in terms of growth was explosive. Not only was the GDP growth rate indeed strong at 3.2% - we can also see that recovery and manufacturing is firing on all cylinders.

• This can be attributed to the fast speed of resumption by businesses and Chinese government capabilities in containing the virus. But of course, there is always room for improvement

• What is going to happen in the second half of the year? Policy focus will be geared towards financial relief to small and medium sized enterprises.

• What does that mean for emerging Asia? In the initial phase of China’s recovery, the impact has mainly been felt on economies such as Taiwan and Korea.

• This year we won’t see Chinese tourism anywhere which means the impact in SEA so far has been relatively muted. What’s holding consumers back in SEA is really about lockdown and restrictions. It’s not convenient for them to shop but we do believe that will change next year.

• The reason we are optimistic in the second half recovery and also next year, is because when it comes to the external environment in SEA, every country is trade dependent. Oil price matters and it’s extremely favourable at the moment.

• This year’s growth in China is going to be around 3% - very strong. Next year it should be 7% - that is above trend.

• SEA this year is growing below trend –in fact like Singapore and Thailand, with large economic contraction. But putting that into perspective, Singapore can easily buy economic growth in both the short and medium term. Next year for SEA will be around 5 to 8%.

• The reason for growth to be less vigorous so far in Asian countries can be tied to the challenges around domestic politics and physical disbursement –overall though, still quite bullish.

Economist Overview

Sitao Xu, Deloitte China Chief Economist / Voice of Asia Leader


Key messages:

• When focusing on the consumer environment across AU, NZ and Japan, the best indicator of consumer health is the path of the virus. In those areas where it has been contained, consumers have come back very strongly.

• We have seen that retailers and consumer businesses have had volatility from month to month – 2020 has been a year like no other. This has been in the form of restrictions, openings and lockdowns –impacting consumer buoyancy.

• We have seen in Australia a number of phases on consumer spending. Retail sales in AU in June were 8% above sales of a year ago. In that market, after the initial wave of the virus and opening up, consumers were buoyant and spending strongly.

• We’ve also seen that in NZ – with a much sharper downturn in March and April via a severe lockdown. But we have seen by June, retail sales had recovered to pre-COVID levels.

• In Japan we saw a strong recovery –such that sales in Japan were only 1% below pre-COVID levels come June.

• Overall, sales performance has fluctuated. Some businesses are seeing contractions by 10% or more. Notably in apparel and travel related sectors and hospitality.

• On the other hand, other parts of the consumer sector are performing strongly – with double digit growth in supermarkets, pharmacy and hardware stores.

• At Deloitte, our State of the Consumer Tracker, operating across Asia Pacific and the Globe, provides a pulse check on spending intentions and sentiment overall:

• https://www2.deloitte.com/us/en/insights/industry/retail-distribution/consumer-behavior-trends-state-of-the-consumer-tracker.html

• We can see consumers in all markets are concerned about health. Consumers are also concerned about their employment prospects. Government support is going to be key in helping to support spending.

Economist Overview

David Rumbens, Deloitte Australia Access Economics Partner

https://www2.deloitte.com/us/en/insights/industry/retail-distribution/consumer-behavior-trends-state-of-the-consumer-tracker.html


Poll Question: As APAC recovers from COVID-19, which part of your business will be the most important in order to thrive in the future?

A

B

C

D

Supply chain disruptions – 20%

Workforce management – 26%

Consumer engagement / retention – 63%

Business continuity and financing – 54%


Capturing the Now Consumer in the next normal Tian Bing ZhangDeloitte Asia Pacific Consumer Products and Retail Sector Leader


The face of the Consumer Business industry has changed drastically due to driving forces of technology, changing demography and lifestyle

Capturing the Now Consumer in the next normal

New Driving Forces

Millennials are driving the demographic cohort in the marketplace.

This group are fingertip sticky, expect 360 degree experiences and are

tech-savvy.

The rise of the millennials

Digital technology has pushed e-commerce and mobile shopping to the

mainstream which has now flowed into the optimisation of supply chains.

Furthermore, businesses have also looked at digitalising their core.

Prevalence of Digital Technology

Juggernauts like Amazon and Alibaba are proving how real-time

convenience innovations are now transforming consumer and B2B

buyer expectations.

Platform innovation

1. 5G: Consumers will be able to connect with brands in real time and

will expect faster service and responses.

2. COVID: Consumer businesses have realised the need to accelerate

their digital transformation journey to ensure survival.

Accelerators


“What can we do now to build a future proof business model in the post Covid era?” APAC CEO, Quick service restaurant group

Due to these changes consumer companies executives are now overwhelmed with the implications to their business…


“Can we become a platform player to drive growth by 10x?” China CEO, Global beverage company

“How do we evaluate the merits of different digital and technology initiatives and design a transformation program that balances the short term and long term?” Asia Chairman, Conglomerate fashion retailer

“How can we create a control tower to provide value to our distributors?” Senior NPS Director, Global sporting brand

“How do we engage consumers directly to create private domain traffic” Global Cosmetics Brand

“What does our brand stand for in consumer’s life?” China COO. Global fashion retailer

“How can we leverage data and digital technology to create interactions with consumers so that we can maximize the value of our relationship across all of our retail formats?” China President, Japanese retailer

“What kind of future vision/technology architecture should we have if we want to grow our DTC business 5x in the next 3-5 years?” Global VP of Customer Experience, Electronics retailer

“What’s the relevance of our brand when everyone is talking about data, technology and digital?” Asia President, Japanese cosmetics brand

”

””

”

”

”

”

”

”


… and they have to re-think what the underlying “theory of business” is


Rethink business model

Relevance of brand

Prioritization of

technology and

capability

investments

Extract value from data and technology

Path to effective change


Therefore consumer companies can only achieve their transformation ambitions, by focusing on the Now Consumer…


The Now ConsumerWhere next for the Now Consumer?

Mapping future moments of opportunity

‘Now’ isn’t just about time; it also reflects an emotional expectation in our consumers. They liveand breathe in the here and now. And sharing that moment is where we all want to be.

How do we stay in touch with the Now Consumer?And how do we go about mapping theirinterconnected journey? By bringing our unique view of how today’s products and services are shaping our future together in one place. Where our experience can help plot the potential pathways of our future Now Consumer.


Online

Offline

Traditional competitive paradigm

The market paradigm needs to shift from products, place and channels to a 24 hour marketplace to capture a bigger share of a consumer’s time, mind and wallet


Time share Mind share Wallet share

24 hoursLifestyle

moments

Transaction

moments

The changing market paradigm

Market

share

Channel

Place

Products

New competitive paradigm

https://www2.deloitte.com/us/en/insights/industry/retail-distribution/consumer-behavior-trends.html

https://www2.deloitte.com/us/en/insights/industry/retail-distribution/consumer-behavior-trends.html



Deloitte’s Now Consumer approach provides a logical framework for consumer companies to transform their businesses to capture the Now Consumer

The Now Consumer Framework

1. Shift the consumer market paradigm Redefine the consumer market as 24 hours of consumer moments, from market share to time share, mind-share, and wallet share

2. Get to know the NOW Consumer Who they are? Where do they live? What do they like? What are their priorities? How, when, where and what do we do to engage with them?

3. Create the NOW Consumer story Build Now Consumer journeys through bespoke experiences at moments that matter

4. Deliver your brand Deliver a resonating value proposition and brand story to the Now Consumer

5. Empower the future businessDesign and build the supporting infrastructure for the future business

6. Unlock the value of dataEstablish a truly data-centric organisation where data is the driving force for executive decision making

7. Change the organisational mindset Embrace an organizational structure and culture that’s Now Consumer centric, boundless, and data and technology empowered


Client RoundtableWho is the Now Consumer? What do they need and how do we connect with them?

Vanessa Matthijssen (Moderator)Deloitte Australia Consumer Products Sector Leader


Panelists

Satyaki Banerjee Chief Operating Officer

Luxasia

Stephen EyearsHead of Strategy and Technology

7-Eleven Australia

Shirley LiuVP & CFO of

Coca Cola China, Korea and Mongolia


Key messages:

• It’s a focus on being very relevant and seeing the landscape as an opportunity to engage with consumers 24 hours a day. Post COVID-19 there are lots of changes around consumer behaviours, channel strategies and new areas unfolding.

• We need to ask key questions around: How can we connect more? How can we increase online stickiness? How do we make products accessible to consumers, taking them right to where they are?

• From a convenience store perspective, if customers need to wait more than 30 seconds, they can get frustrated. It’s about being quicker to serve their needs –making them more likely to come back.

• Contactless payment has been a big and advanced trend. Here in Australia people are walking away from cash –moving to a safe and contactless environment.

• Localisation is another element to consider, with neighbourhoods reacting very differently.

• A downtown CBD location/consumer might be different to the needs faced in suburban areas.

• We need to respond and tailor the experience to the Now Consumer accordingly.

• Loyalty is dying. The idea of holding on to a consumer as “mine” as a brand needs to be re-thought.

• It’s important to be connecting with the consumer across their entire journey –through as many touchpoints as possible.

• Consumers are constantly discovering a brand and one needs to be there and to be present – every step of the way. This is about thinking very carefully about every moment of consumer connectivity.

Spotlight #1

Who is the Now Consumer? What do they need and how do organisations connect with them 24/7?


Key messages:

• Digital journeys have certainly accelerated.

• Starting with one method of connecting – for example via a digital app – can build sentiment and feedback.

• When it proves to be very popular, that can give permission to start developing a maturing digital relationship with customers.

• As strategies and journeys evolve, they can start growing into the need for broader digital platforms – to connect with partners and offerings.

• Scalability is another element needing to be considered by businesses as they travel along their consumer centric transformation journey.

• The ultimate question to address is: What can we do to be convenient for customers?

• As transformation journeys unfold, businesses are making investments around data and client relationship management (CRM) systems –connecting with clients at every touchpoint.

• Contactless environments are also a growing element – putting the safety of consumers under the spotlight and making them feel comfortable throughout the journey.

Spotlight #2

7-eleven has been on a consumer centric transformation journey. What changes in the consumer proposition and operating model can you share and what moments have made a difference?


Key messages:

• Rewarding consumers via mini-programs in conjunction with other initiatives at flagship stores, is a way of connecting with them across their consumer journey.

• Businesses can also choose to partner with a variety of suppliers to see how they can get their products to consumers quickly and with ease and efficiency.

• It’s about taking the product directly the consumer – wherever they might be in this new 24-hour landscape.

• In reaching consumers, some organisations are using the franchise model and partners across their strategy.

• It’s important for leaders to ask: How can I ensure consistency end-to-end across the consumer experience? Right from the frontline engagement to the product delivery to consumers.

• It’s important for businesses to explore digital innovation – with a focus on enhancing the consumer experience.

• End-to-end, across the whole consumer journey, it’s about creating consistency and clarity for the consumer – not confusion.

• From QR codes to further messages placed on packaging (such as under bottle lids), there are a diversity of ways in which to connect with consumers via the product(s) being delivered –throughout the journey.

• With the landscape rapidly changing –businesses need to keep up-to-date and up-to-speed on all elements of a consumer’s journey.

Spotlight #3

Coca Cola continues to put innovation front and centre. In the unique and digitally savvy consumer market of China, what insights can you share on this?


Key messages:

• Driving innovation is a business imperative – across every single touchpoint.

• Planning is key. It’s a focus on ensuring consistency and driving connectivity. The right planning and preparation can indeed make or break your business.

• Mind-set and reskilling are both critical – everyone has a role to play in driving innovation and thinking how an experience can be made more seamless for a consumer.

• Through a time like COVID and beyond it’s about everyone playing their part, sometimes outside their specific remit, to ensure the team works together, with contributions coming from all areas.

• Making the right investment choices in technology is another vital area to consider.

• Rather than running each individual element of your operation, it’s important to look at technology that can connect your business with different marketplaces and options to integrate processes with various systems.

• Assess the physical elements of your workspace – some businesses are transforming their warehouses to cater for both B2B and B2C interactions.

• Everyone’s journey is still evolving – it’s about being nimble, agile, flexible, adaptable and future-focused – fuelled by innovative thinking.

• Continued innovation is fundamental in driving a seamless approach.

Spotlight #4

When it comes to distribution and logistics, there are many ‘unsung heroes’ in the supply chain – what role does innovation play in driving a seamless and connected consumer experience?


#1 You need a North

Star – to drive focus and to understand the journey you are on.

#3 Get the right team in

place – both from within and externally.

#2 Engagement is critical

– with your team and your people – putting their safety first.

#4 Fail fast – you don’t have

the luxury of time.

Closing Remarks from the Panel

Four key tips for every leader to keep top of mind in taking on challenges and evolving a business


Thank you!Vivian Jiang Deloitte Asia Pacific Clients and Industries Leader

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© 2020 Deloitte Asia Pacific Services Limited

deloitte asia pacific webcast€¦ · new driving forces millennials are driving the demographic...

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