consumer of the future - barkley inc. · consumer-centric brand portfolio strategy. operating model...

ConsumerOf The FutureInsights on Consumer Packaged Goods

January 2019

COPYRIGHT © 2019 BARKLEY, INC. AND FUTURECAST, LLC. ALL RIGHTS RESERVED.NO DISTRIBUTION OR REPRODUCTION WITHOUT PERMISSION.

Table of Contents

All of the material in this document is copyrighted and may not be reproduced in whole or in part without express written permission. For permission, contact Joe Sciara at [email protected].

05 About This Study

07 ConsumerPackaged Goods

14 AboutBarkley

22 Resources

COPYRIGHT © 2019 BARKLEY, INC. AND FUTURECAST, LLC. ALL RIGHTS RESERVED.

5

NO DISTRIBUTION OR REPRODUCTION WITHOUT PERMISSION.

AboutThis Study

Full of noise, constant competition and easy access to just about everything, the modern market is congested with brands doing anything to stand out, while consumers too often respond by shutting off. Potent modern brands understand why: They listen to and study consumers, then evolve to meet their needs.

It’s our business to help brands get to know their consumers, to connect with them through ideas that drive the entire spectrum of a brand, from business strategy to marketing strategy. And, ideas that are not just for now, but for what’s next. Our commitment to knowing modern consumers better than anyone inspired

this latest deep-dive into modern brand mindsets and brand impact levers as they pertain to various categories.

In partnership with Jefferies and Accenture Strategy, we conducted a proprietary survey of 2,851 consumers that studied consumer preferences and purchase drivers across multiple categories, including personal care & beauty, apparel, packaged foods and QSR restaurants.

We investigated modern brand mindsets — or the cross-generation collection of behaviors and attitudes that a brand can leverage to drive performance in terms of share, growth and loyalty. These mindsets are informed by the impact of Millennial and Gen Z expectations of modern brands, as they form

the majority of people engaging in commerce — the core of what we call modern consumers.

Brands that understand the modern consumer will be more likely to create an emotional connection that drives brand love and loyalty — which equates to higher brand value.

Modern Brand Mindsets

Adding GoodPurposeful

Simplifies My LifeAccessible

ReinventingInnovate

Emotional ConnectionSelf

Puts ConsumerTrustedNeeds First

Conversational +Social Circle

Participative

COPYRIGHT © 2019 BARKLEY, INC. AND FUTURECAST, LLC. ALL RIGHTS RESERVED.NO DISTRIBUTION OR REPRODUCTION WITHOUT PERMISSION.

Consumer Packaged Goods

01

Product

Communications

Design

Experience

Workforce

What the brandtakes to marketand sells

The symbols and narratives that tell a brand story

The manifestations of a brand that make it top of mind

Customers’ directexperience with a brand

The internal culturethat defines a brand from the inside out

Brand Impact Levers We also looked at impact levers, defined as the sub-system of product, experience, communications, design and workforce activities. These levers connect a brand’s business and marketing ideas with its consumers and stakeholders.


9Personal Care

& Beauty


9Consumer

Packaged Foods


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Important Factors Today vs Two Years Ago

Important Factors Today vs Two Years Ago

More than half of all consumers now expect brands to meet their emerging needs.

66%

50%90%>

50%42%27%

Health Benefits are more important

of consumers say taste or price is the most important factor

of consumers agree taste and price are as or more important than two years ago

Quality, Safety & Trust are more important

Social Impact is more important

Brand Recognition is less important

Important Factors

Taste and Price

figure 2.1Brand Beliefs and Expectations by Generation

Help me discover new

things

Anticipate my needs

Be consistent with the image I want to convey

Supports issues I

believe in

Allow me to create and customize

0%

20%

40%

60%

80%

100%

Source: Brands Still Matter Consumer Survey 2018

Source: Marketing to Gen Z 2018

Gen ZMillennialsGen XBoomers

Taste and price are still the most important factors driving performance in Packaged Foods. This hasn’t changed for two years. Still, other factors are becoming more important, with emphases on health benefits, quality/safety/trust and social impact.


13


MindsetStatements

Trusted

Innovative

Is honest in its actions and communications

Creates innovative products and solutions

Self

Accessible

Helps me live a simpler, healthier life

Makes it easy for me to use their products

SocialCircle

Purposeful

I love to tell my friends about them

Cares about sustainability and the environment

Mindset StatementsModern Brand Mindsets

figure 1.2Modern Brand Mindsets - Consumer Packaged Goods/Food & Beverage Index to All Categories

Source: Accenture / Barkley / Jefferies 2018 Consumer of the Future Study

Social AccessibleSelf Innovative Trusted Purposeful

40

80

120

160

0

When looking at the importance of the Modern Consumer Mindsets in this category, accessibility,

trust and self are important overall to driving performance.


15


BrandImpact Levers

figure 1.4Brand Impact Levers

Brand Impact Levers While performance measurements across categories find that product matters most when buying staples such as packaged

foods and household goods, brand experience and communications become more critical in other categories.

PackagedFood

Brand Communications

Brand Experience

Product + Service


figure 1.3TURF

MaleFemale

Makes it convenient to shop for

and buy their products

Makes it easy

for me to use their products

Helps me live a simpler,

healthier life

Cares about sustainability

and the environment

Reflects my

lifestyle

Is honestin its

actions and communication

Is always testing

new ideas

Creates innovative products

and solutions

Is authentic and true to

its roots

0%

20%

40%

60%

80%

100%

We used a TURF analysis (total unduplicated reach and frequency) to see what individual Modern Brand Mindset statements drove reach in this category. The chart below indicates that it only takes four factors to reach 70 percent reach

with men and women. Shopability, ease of use, brand promise and sustainability are key attribute factors. Men prefer brands that portray images they can relate to, and look for more innovation.


ModernBrand Mindsets

Fast Food Restaurants

Packaged Food

Personal Care & Beauty

Household Products

Fashion & Apparel


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KeyTakeaways

0% 20% 40% 60% 80% 100 %

Has advertising that is easy to understand.

Has a logo, packaging or storefront that is easy to recognize.

Has a logo, packaging or storefront that is visually appealing.

Has a logo, packaging or storefront that is modern and up to date.

Offers products/services that are reliable or consistent.

Offers products/services that are good value for my money.

Has products/services available in the size/flavor/format, etc. that fits my needs.

Offers products/services that are high quality.

Regularly launches new product variants (flavors/fragrances/colors/styles).

While product is the most important performance factor for Packaged Foods, individual statements indicate that package design plays a more amplified role in helping to navigate products on shelf. In fact, design statements scored at the highest levels of importance in this category.

figure 1.5Brand Impact Statements


DESIGN

PRODUCT/ SERVICE

61%

65%

64%

59%

59%

62%

62%

62%

55%

Key TakeawaysModern consumers view brands as a collection of ideas that embody a mindset(s) and activate across brand impact levers, albeit not all equally. As a result, brands do well when they:

• Shift away from the Golden Rule of Treat others as you want to be treated, and move toward the new Platinum Rule, Treat others as they want to be treated.

• Understand that modern consumers value authentic brand purpose built through a virtuous cycle of trust, purpose and loyalty, with accessibility being paramount.

• Recognize that brand impact levers vary by demography, category, mindset and brand lifecycle — there’s no “one size fits all” when it comes to connecting with consumers.

• Clearly and consistently convey their brand value and use personalized engagements to build emotional connections.

• Invest in experience and communications levers.


19


Capability

Growth Opportunities To extract growth, brand owners need to focus on three types of next-generation capabilities.

Consumer Insight & Strategy Formulation

Continually renewing market awareness driving consumer-centric brand portfolio strategy.

Operating Model Agility

Living organization with modular plug-and-play structure that adapts to changing market conditions, balancing speed, flexibility and efficiency.

Brand Activation: Bringing Brands to Life

Meaningful consumer engagement integrated in consumers’ lives through deep insight, agile innovation, and authentic, relevant brand stories.

Source: BSM Executive Interviews; Accenture Research

However, brands must build new capabilities to win in the marketplace: larger brands must invest in such capabilities more than emerging brands due to their leadership role in the marketplace.

CAPABILITYRequired Mastery by Brand Type

Leading Retailer Emerging

Con

sum

er In

sigh

t &

Stra

tegy

Continually Renewing Market and Consumer Awareness: Holistic, data-driven external outlook that continually scans the market and identifies disruptive opportunities.

Compelling, Balanced Portfolio: Clear and disciplined brand portfolio strategy.

Bran

d Ac

tiva

tion

Agile Innovation: Deep consumer insight drives rapid product/service/business model innovation.

Consumer Intimacy: Hyper-relevant consumer engagement creates authentic brand stories and meaningful relationships.

Consumer-Centric Omnichannel: Brand alignment across proliferating array of business models based on consumer occasions.

Ope

rati

ng M

odel

Agi

lity

Market-Adapting Supply Chain: Demand-sensing manufacturing and supply chain balances flexibility and efficiency.

Living Organization: Nimble and modular organization that supports multiple business models with diverse strategic objectives.

Ecosystem Mastery: Design, form and manage ecosystems for value creation.

Source: BSM Executive Interviews; Accenture Research


21


Authors &Contributors

About Barkley At Barkley, we are committed to knowing the modern consumer better than anyone. We take pride in future-proofing business models and modernizing iconic brands. However, we are more than an ad agency. We are integrated business partners who are analytic and innovative at the core, using data to drive marketing conversation

and strategies. This culture of innovation allows us to partner with our clients to create the solutions of the future. Our emerging technology innovation practice has built and deployed new technologies that create more engagement with the savviest generation of consumers we’ve ever seen.

About Authors & ContributorsBrad Hanna | [email protected] is an Executive Vice President and Director of Business Strategy at Barkley. Brad serves as senior advisor and strategy lead across a portfolio of major brands. He has played a vital role in shaping the research and strategy design projects for Barkley, as well as collaborating with FutureCast on major projects since 2011.

Jeff Fromm | [email protected] Jeff is President of FutureCast. Jeff has co-authored two books on Marketing to Millennials and a new book on Gen Z.

Chad Nicholson | [email protected] Chad leads Barkley’s Business Strategy team, responsible for providing deep insight into factors affecting overall business and brand performance. Focus areas include food and beverage categories such as meat protein, dairy, produce and alcohol beverages across retail and food service.

Accenture and Jefferies contributed to this report through the Brands Still Matter Survey and Consumer of the Future Survey.


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Credits

Resources Credits

Production

Arthur Cherry Associate Design Director

Sara LeutyDesigner

Anh Truong Designer

Contact

Joe Sciara EVP of [email protected]

Editorial

Jennifer MaziWriter

Eli Lafollette Designer

Joni Thomas Designer

Max Jaffee Designer

Danielle Smith Proofreader

1 Brands Still Matter Survey (2018). Accenture Strategy; Jefferies.

2 BSM Executive Interviews (2018). Accenture Strategy.

3 Consumer of the Future Study (2018). Accenture Strategy; Barkley; Jefferies.

4 Marketing to Gen Z (2018). Jeff Fromm; Angie Read.

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Insights on Consumer Packaged Goods

Consumer of the Future

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