Copyright © 2013 Accenture. All rights reserved.
Emerging Trends Program
China Summary
June 5th 2013
Christian Requena, Accenture, Shanghai
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Copyright © 2013 Accenture. All rights reserved.
Agenda
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Topic Time
Emerging trends program introduction 2 min
Key survey finding 3 min
Implications of emerging trends 12 min
Next steps 5 min
Accenture point of view on emerging trends 8 min
Copyright © 2013 Accenture. All rights reserved.
Emerging trends program introduction
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• Identify emerging trends that will impact the Consumer
Goods and Retail industries
• Publish report outlining “Trends that will shape the Asian
CPG landscape”
• ECR to develop programs to prepare members to capitalize
on these trends
Objective
• Trend long listing • Survey
• Exploration workshops: Singapore / Shanghai / Mumbai
• Report
Approach
Copyright © 2013 Accenture. All rights reserved.
Key survey findings
Top Trends – Now and in to 5 years
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Top trends: awareness of health issues, increasing digital lifestyle, shift in
income levels, more informed consumers, environmental sustainability and an
aging and active emerging society that can not be ignored.
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3
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2
3
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0 20 40 60 80
Increasingly Ageing Society
Scarcity of Talent
Increased Urbanization
Environmental Sustainability
The New Consumer
More Informed Consumers
The Shift in Income Levels
Increasing Digital Lifestyle
Awareness of Health Issues
Trends in 5Years
Trends Now
Copyright © 2013 Accenture. All rights reserved.
Shanghai workshop discussion outcomes
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6 trends were discussed in Shanghai’s workshop
Trends Characteristics Implications Examples
Increasing Digital
Lifestyle
•Online stores
•Social Medial
•Online business
•Logistic cost
•Fake/inferior products
•Social media
•Taobao: Both an eCommerce and a BBS
•L'Oreal and Nestle build ecommerce
•New business model: B to B/C to C
Shift in Income
Levels
•Opportunity for premium products
•Shop less, but with bigger basket
•Traditional channel
•Different middle class
•Favor brand image products
•Higher shopper expectation
•Key shopper identification
•Silver economy
•Skin care product is popular
•Logistic network and effective supply chain
•Different portfolio for different stores in
colgate
Awareness of
Health Issues&
Increasingly
Aging Society
•Shifting of population structure
•More active life style for aging people
•Healthcare issue
•Smoking problem
•More market opportunities
•More nursing houses
•Mobile phone for aging people
•Special travel groups for aged consumers
•Nestle provides special milk products for
aged consumers
Changing Retail
Environment
•Modern trade grows fast
•Retail expansion slows
•Purchase way change
•Local players grow faster
•HQ manage local store
•Serve multi channel
•Low tier city penetration
•New product launching agility
•Visibility and effectiveness challenge
•Product differentiation
•Macdonald’s change based on geographic
•Unilever education campaign
•Wal-Mart E-commerce use offline store as
warehouse
•Coca’s online sale with “Number1 store”
Environmental
Sustainability
•Demand for environmental products, but
not willing to pay more
•Environment sustainability company
culture
•Long term sustainability growth
•Company margin risk
•Customer shopping behavior change
•Communicate environment
sustainability value to consumers
•Unilever create sustainability KPI’s
•Coca reuse recycle water
•Starbucks help clean communities
•Red apple
•GS1 Case code usage
Scarcity of Talent •High turnover of talent
•Eager to personal growth
•Cultural conflict
•High economical rewards attractiveness
•Local leaders go abroad for expertise
•Rise the labor cost
•More recruitment/training cost
•Promote automation in China
•Succession plan
•Preparing incentive plans
•Incentive plans
•Automation plans
Note: Health Issues and Aging Society are combined together for discussion because of similarities
Copyright © 2013 Accenture. All rights reserved.
Overall implication of Asia emerging trends
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Organizations are learning to act upon identified emerging trends levering the
power and speed of new technologies and getting support across the different
departments to respond appropriately with renovated strategies and Route to
market
Trends For Manufacture For Retailer
Increasing Digital
Lifestyle • Utilize online presence • Utilize online presence
Shift in Income
Levels
• Produce innovative products
• Target entry level consumer
• Keep wider product range
• Multiply retail formats
Awareness of
Health Issues
• Focus on healthier products
• Educate consumers
• Invest in traceability
• Focus on aged consumers’
products
Changing Retail
Environment
• Focus on product portfolio
• Focus on supply chain • Lead to increased competition
Environmental
Sustainability
• Build long term sustainable growth
• Maintain margins
• Carry more eco-friendly
products
Copyright © 2013 Accenture. All rights reserved.
Next steps
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Based on the survey, ECR should develop programs and prepare members to
capitalize on top 4 trends:
1) Increasing Digital Lifestyle; 2) The New Consumer;
3) Environmental Sustainability; 4) Awareness of Health issues
…and add initiatives around the information society as this is missed
0 0.1 0.2 0.3 0.4 0.5 0.6
Increased Openness of Data
More Informed Consumers
Awareness of Health Issues
Environmental Sustainability
The New Consumer
Increasing Digital Lifestyle
Trends ECR should focus on
Copyright © 2013 Accenture. All rights reserved.
eCommerce and channel explosion
Rising middle class beyond developed urban areas
Increasing retail sophistication – likely concentration
Rising brand appeal – not so much recognition or loyalty
Accelerating shift from traditional marketing to digital
marketing and social media
Data explosion and analytics potential
Growing margin pressure/risk on lower tier/mass product
segments
Mobility becoming the norm – not the exception
Social media becoming a major driver of influence/opinion
‘War in store’
Multi-channel strategy and
enablement
Digital brand building and listening
Mobility
Technology at speed as key enabler
Trends Priorities
‘War in Store’
Gaining Visibility and Increasing Performance at Store Level
Pain Points Addressed How are these challenges being addressed?
Lost Sales Due to Out of Stocks
Poor Execution of Distribution Activities
Inefficient In-Field Activities
Inefficient Route Planning
Growth of Trade Spends
Lack of Visibility to Product Data & Supply Chain Spend
‘Perfect Store’ Capabilities & Improved Data Management
Strengthened Integration with Top Tier Distributors
End-to-End Sales Force Performance Management
Trade Promotion Management
Wholesaler Management
Point of Sale & Cost to Serve Analytics
Accenture point of view on emerging trends
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Copyright © 2013 Accenture. All rights reserved.
The art of winning the Chinese consumers penetrating the lower tier markets
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China consumers market background
Lower-tier cities and villages are the
new consumer battle grounds. They are
the frontier for high performance
• Fierce competition for consumers
• Growing demand for products and
services
• Faster disposable income growth rate
• Country’s fast pace of urbanization
Three types making the move to reach
Tier 3-5 markets: “Advanced Pioneers”,
“Explorers” And “Observers”
Six Capabilities to distinguish the
leaders from the rest
Invest in
supply chain
& distribution
infrastructure
Fuel growth
with high-
quality and
timely data
Find new
roads to
customers
Engage local
government
and social
communities
as partners
Build up
sales skills in
new
territories
Introduce
innovation to
the 4th “P”
(Product)
Favorable
opportunities
Geographica
l advantages
Harmonious
relationships
Copyright © 2013 Accenture. All rights reserved.
North America Europe APAC
Like to shop online (Apparel) 52% 54% 70%
Like to shop mobile (Apparel) 11% 13% 24%
Like to shop physical store (Apparel) 86% 82% 80%
Showroomed at least 1x in last 6 months 73% 74% 85%
Flexibility to pay anytime / anywhere, using
cash, credit, or other is Important / Very
Important
77% 70% 65%
Same day delivery – rated important or very
important
24% 35% 38%
% Who think “integrating stores / online /
mobile” is where retailers need to improve
shopping experience most
49% 49% 38%
The Seamless Consumer is a Global
Phenomenon
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Today’s non-stop customers expect to shop without barriers throughout a
multi-channel journey. At the geography level, there are many similarities and
some differentiation in consumer expectations of a Retailer’s seamless
capabilities
Copyright © 2013 Accenture. All rights reserved. Copyright © 2013 Accenture. All rights reserved.
Customer Experience
Must be seamless across brick and
mortar, online, mobile, social and other
emerging channels.
Must be seamless in terms of buying,
placement and promotion of merchandise,
having inventory visibility, developing pricing
strategies, and managing metrics and
incentives across channels.
Must be seamless as new disruptive
technologies such as mobile, social, cloud,
big data, etc. come into play.
Operations
Platforms
Retailers cannot deliver a seamless customer experience alone.
Technology, Data, Analytics and Process partners will become
equally as important as merchandise vendor partners.
Partners
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Becoming
Truly Seamless Requires Transforming
All Aspects of How a Retailer Operates
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Seamlessness - the ability to deliver a consistently personalized, on-brand
experience for each customer at every touch point, any time, anywhere - is
plainly a tall order for most traditional retailers
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Thank you
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