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Innovation in Collaboration

Kees Jacobs, Capgemini

DLF Høstmøte - Autumn Conference, October 2018

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Consumer behaviour has changed

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Shopping journeys and missions are changing

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A new paradigm for marketing and sales

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A blurring of the line between CP and R

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A supply network no longer fit for purpose

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All these seismic shifts are disrupting Value Chains, leading to New Value Networks that are organized around consumers

Muhtar Kent

Chairman

The Coca-Cola Company

Motoya Okada

President & Group CEO,

AEON Co., Ltd.

“If we do not

understand and start

to adopt this

fundamentally

different approach,

we will struggle to

create value and

secure long term

growth.”

Source: Rethinking the Value Chain, Capgemini & CGF, 2016

How does this impact Commercial Collaboration between retailers and CPG manufacturers?

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Facilitated by The Consumer Goods Forum, a group of commercial top-executives across retailers and manufacturers have come together to initiate a step-change across the industry on ‘Innovation in Collaboration’, in order to better serve consumers and to jointly grow the industry’s share of wallet in a profitable manner.

Under the CGF umbrella, manufacturers and retailers have drafted a new collaborative model

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Insufficient collaborative focus on delighting shoppers and consumers

Lack of mutual profitable growth commitments

Limited sharing of shopper and consumer insights

Too short term focus

Pure focus on the physical product

Abundant sources of inefficiency

Lack of mutual trust

Lack of speed and time to market

Negative dominance of annual negotiation-cycle

Addressing some current collaboration challenges

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The ambition is to have both retailers

and manufacturers adopt joint

approaches and build best practices to

improve shopper experiences by

innovating in collaboration, driven by

consumer needs and occasions, and

based on clear joint ‘profitable growth’

commitments.

Innovation in collaboration

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13 13

Disruptive agile approaches to drive mutual value from digital technology innovations

Cut out current sources of inefficiency in the retailer-manufacturer interface and tactics

Delivering relevant experiences and services beyond the product (in store and across other digital channels)

Breakthrough in mutual trust via collaborative cultures, skills and rewards

Joint commitment to establish mutual profitable growth

Laser focus on jointly delighting shoppers and consumers

Multi year building blocks delivered and managed via short cyclic value sprints (‘test and learn’) and monthly scorecards

7

2

1

6

8

5

3

Synergetic sharing of deep shopper and consumer insights4

Increase decision-speed and time to market (responding quickly to changing needs and conditions)

9

Frame the negotiation process with clear value-sharing mechanisms10

We jointly defined 10 Guiding Principles to succeed in innovation in collaboration

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We designed a joint ‘Innovation in Collaboration’ framework in order to establish a common understanding on what value can be added to consumers

The starting point is the consumer

/shopper – how can we get to know them

better and understand their needs and wants

– how can we add more value to their life

The next part is to establish the different roles between the teams in meeting those needs, identifying the data and capabilities

required to do so including services, touchpoints and channels

This then leads to developing a joint proposition – could be a product innovation,

could be a joint data campaign, could be a service offer, it could also be something that

drives efficiencies for both brands

By jointly executing upon this Innovation in Collaboration process, the negotiations will

be framed with measured value delivery for both brands and will

capture learning for future collaborations

This will also provide the foundation for a

jointly focused approach to cut-out all inefficiencies that are

hindering the realisation of the joint

value proposition

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Customer ExperienceData and Insights Innovation

Let’s look at some best practices

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Customer ExperienceData and Insights Innovation

Let’s look at some best practices

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Consumer Driven Insight Services are critical to drive innovation in collaboration

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Pricing EffectivenessWhat is the price-perception and optimal (dynamic) price-points ?

Shopper EngagementWho are our target-shoppers and where / how to invest in shopper acquisition and path-to-

purchase engagement ?

Assortment RelevancyWhat s the optimal target mix of merchandising and

services accross channels ?

Value SharingWhat trade terms will provide a

balanced value proposition ?

Promotion ImpactWhat promotions generate incremental and sustainable revenues and margin ?

Sales effectivenessWhere can we be more effective in

driving insotre sales ?

Digital Channel SalesHow can we improve sales

performance accross digital and omnichannels ?

Store ExperienceWhat are the shopper experiences

around our products in specific stores ?

Needs and OccasionsWhat are the real shopper needs and occasions in the context of individual

people’s lives ?

Instore Digital BehavioursWhat’s the impact of digital interactions and

services within stores?

Channel coverageHow are we reaching our shoppers (what’s the potental of eg new stores or channels ?

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Collaboration in Data Science will drive collaboration even further

• Secured data-ownership• GDPR (privacy) compliance• Authorised usage

(only for specificcollaborative analysis)

• Joint data-science• Collaborative

dashboarding

• Data & Insights filtering (as relevant forcollaborative sharing)

Collaborative Business Data Lab

Data

Insights

Collaborative Business Insights

Retailer

Data

Insights

Manufacturer

LoyaltyPOS

Geo-location

ProductData

SearchWeather

3rd Partydata

SensorData

Onlinetransactions

Social Media

Consumer Needs and Occasions

CollaborationValue

(topline/bottom-line)

Categories

Promo’s

Pricing

Products, Services,

Experiences

Collaboration inefficiencies

Click-Stream

Supply Chain

External

Data

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Customer ExperienceData and Insights Innovation

Let’s look at some best practices

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Collaborative innovation is more important than ever in today’s increasingly-blurry categories.

OLD WORLD NEW WORLD

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We see different ways in which companies can drive growth through collaborative innovation.

Routes to Growth

Through

Collaborative

Innovation

New

Services

New

Product Categories

New

Business Models

Collaborate with Customers to unlock

insight and test entry into new segments

and categories through

existing channels.

Google + Levi’s

Collaborate with Customers and

Partners beyond existing channels to

build platforms to bring new

services to Consumers

Apple + Nike

Collaborate with Partners in the broader

ecosystem to develop fundamentally

new ways of generating revenue.

IKEA + Task Rabbit

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Impactful collaborative innovation is approached through a strategic ecosystem approach.

Bars

& Restaurants

Immersive

Experiences

Digital

Content

Social

Media

Sporting

Events

Retail

Events &

Festivals

Product

Hardware

Home

Entertaining

Subscription

Services

As traditional category boundaries continue to blur, understanding the current and future ecosystem of customers, partners and end consumers, becomes integral to prioritising opportunities and focusing attention for collaboration.

Only an ecosystem approach will create sustained and defensible growth.

CPG Brand

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Customer ExperienceData and Insights Innovation

Let’s look at some best practices

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The extension of the physical world with new digital solutions opens up new ways to enhance the

customer experience and unlock savings and revenues.

Physical Store Proposition

Out-Of-

StoreIn-Store

Online Store Proposition

Virtual

Store

Web

Store

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A next wave of disruption will come up:

Conversational Commerce

Vision Report MIT, Capgemini, Intel

Capgemini consumer research

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Personalized Service

SocialObservation

Trust &Empathy

Voice & VisualDialogue

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Brands have got their voices back, but what is their personality ?

"VOICE, AS A THING RATHER THAN AN ABSTRACT CONCEPT, OPENS UP A WHOLE NEW PALETTE FOR BRANDING, WHICH TRADITIONALLY HAS BEEN VERY VISUAL,“

▪ Voice assistants will soon sound significantly more like human beings

▪ Voice assistants are also learning to better use pitch, volume, rate and tone - all elements of speech used to effectively convey emotion, and emotion favors connection

▪ In the past, 'brand voice' has been metaphorical, now what the brand sounds like will be a key attribute

▪ What should your brand sound like?

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Conclusion: Data, Insights, Innovation and Customer Experience will drive collaborative success

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How to start building a successful future together ?

1. Qualify and select the trading-partner(s) with best cultural fit

and trusted relationships to accelerate Innovation in

Collaboration.

2. Establish top-down joint executive commitment to Innovate

in Collaboration, with longer-term mutual profitable growth

ambitions.

3. Assemble mutual (cross-functional) leadership-teams, that

have the right spirit and belief to gain the trust of the

collaboration partners and to demonstrate joint value.

4. Kick-off with a joint (facilitated) session to define the

common vision, mutual value objectives and metrics, ways to

innovate services and experiences beyond products,

collaboration roadmap planning and governance-cadence.

5. Launch and execute via short-cyclic value-sprints (‘test and

learn’) and monthly scorecards, with tangible value-delivery

in the context of the agreed multi-year ambition

THANK YOU

DLF Høstmøte, October 2018

Kees Jacobs

Capgemini

kees.jacobs@capgemini.com