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The Top 3 Blind Spots of Consumer Products Companies

Smart Consumer Products

Products that consumers want can be generally classified into 3 types:

  1. Convenience

  2. Shopping

  3. Specialty Goods

Convenience goods are our regular purchased products such as milk. Shopping goods are those that we will research on and make comparison before purchase, for example, mobile phone/TV. As for specialty goods, they are primarily associated with brand preference and considered premium products like the luxury bags.

Consumer Products (CP) companies are in an extremely competitive business especially for the Convenience (FMCG) and Shopping goods. Their markets are influenced by diverse factors in supply chain, sales and marketing. Brand owners faced constant pressure to handle the speed, changes and accuracy in our fast-paced modern environment. With many challenges to tackle, there are some blind spots often being overlooked by companies that are crucial for their continuous success.

1st Blind Spot: Missing Out on Direct Engagement with Consumers

For Convenience and Shopping (C&S) goods, the approach for success used to be relatively simple. So long as companies have great relationships with retailers, with good products and brand awareness, things tend to move smoothly.

Many C&S brands fail to capitalize on Direct to Consumer (DTC) engagement because they are too dependent on retailers for constant revenue. Some might even fear that having a direct consumer business strategy will damage their relationship with the retailers. Furthermore, most companies built their business with retail distribution in mind.

The current market has since become more complex. Consumers want to have engagement and experience. Owning the ultimate relationship with customers is now the only way to build a sustainable business for brands. The insights on consumers trend and behavioral data are the engine of new growth. However, the data often are not being shared real time from the brick & mortar retailers.

With rise of E-commerce space, the “middleman” (retailers) basically moved from Physical departmental stores to Online Platforms such as Amazon, Taobao etc. Retailers have very efficient supply chain and distribution networks. Their advantage over C&S companies are access to millions of end consumers in their systems, hence gain the ability to cater and refine to meet user experience.

A good way to reach out directly to consumers and yet maintain a good relationship with the retailers is to establish an omni-channel approach (Figure 1). By unifying user experiences from brick-and-mortar to mobile browsing and everything in between, brand owner can provide customers with a fully-integrated shopping experience.

Figure 1: Omni Channel Approach: Covering different aspects of marketing engagement channels

According to Harvard Business Review, on a study for 46,000 shoppers in 2017 shows that only 7% were online-only shoppers and 20% were store-only shoppers. The remaining majority, or 73%, used multiple channels during their shopping journey.

Through various sales touch points (both online and offline), better insights about consumer preference and market trend can be gathered. Better marketing engagement and customized products can be provided, which increase customer loyalty and stickiness. This information will be an asset for the brand owners in the new economy.

2nd Blind Spot: Not Getting into Smart Packaging

We are now living in an increasingly connected and mobile world. According to a research from Ericsson Mobility Report, by 2020, smartphone subscriptions are set to increase more than double to around 6 billion. 70% of people will be using smartphones, and 90% will be covered by mobile broadband networks.

Consumers attention span now has become even shorter. They seek for more detailed information and personalized offers at their fingertips. It is no longer enough to offer a good in-store experience or competitive price. Consumers will do research prior to purchase (be it at retail shops or online shopping). They want to have product visibility and active engagement with brands.

Consumer Product (CP) companies run the risk of missing out significant opportunities and face potential disruption without being able to address the business issues in the new connected economy. There are 3 types of business issues, namely (1) Real time Supply Chain Management, (2) Product Integrity and Authenticity, (3) Consumer user experience.

Conventional packaging is unable to address them. However Smart packaging is able to do so which further drive value creation. Below figure 2 shows an overview on smart packaging

Figure 2. Smart packaging market value overview for 2018, $ USD

Intelligent packaging often involved used of technologies such as sensors, codes and taggants. These technologies are capable of generating data that can be captured, analysed and communicated to companies for insights, thus create value along the supply chain.

RFID, NFC and QR code enabled packaging or labels allow real-time track and trace in production, distribution and sales cycles. According to Deloitte analysis, the use of smart packaging is just entering the initial growth stage for FMCG and Pharmaceutical industries. For sectors, such as Cosmetics, Food and Industrial products, it is at the introduction phase (Figure 3).

Figure 3: Application and Adoption of Smart Packaging

Given that the smart application has yet to reach high growth and maturity levels, forward looking companies should start to think how to embark on various solutions to capture bigger market share of the future. With stronger, faster 5G network connectivity that we are going to experience in the very near term, smart packaging is no doubt part of the next business revolution.

3rd Blind Spot: Using Obsolete Solutions to Tackle Counterfeiting Issues

With increased complexity of the buyer’s journey, generating high sales growth for Consumer Products have become more difficult. Things are worsened if your brand is facing another competitor that does not need to abide by industry regulations. The rise of global counterfeiting with better fakes produced are destroying companies and consumers.

By 2020, the total amount of counterfeiting is expected to reach US$1.82 Trillion. (Source: The Global Brand Counterfeiting Report 2018). In additional, according to the Edelman Trust Barometer, only 52% of global respondents trust businesses. Consumers are experiencing a crisis of faith. With Fakes getting rampant both ON and OFF internet, it is difficult to differentiate them from the genuine ones.

Many consumers unknowingly ended up buying fakes. Brand reputations are tarnished by counterfeiters monetizing their presence. Product recalls and liability claims further add insults to injury when counterfeits infiltrate the supply chains. Some good examples were incidents of tainted fake milk powders reported in China 2008 and in Malaysia Dec 2017. Nobody will actually buy fake food or products for their children and themselves to consume. The primarily reason is inability to confidently verify genuine products prior to purchase or consumption.

Consumer product companies are aware of the related issues of counterfeit and how they can be affected. Some made commendable efforts to protect their brand and products while others generally accept their fate. However, most have limited success against the knock-off because they view having brand security as a cost rather than revenue generating strategy. Hence, they are normally not willing to implement new solutions or upgrade their current obsolete ones unless they are badly affected. Their inertness gave counterfeiters plenty room to grow and erode their rightful revenue.

In the past, internet and smart phones are uncommon. Hence, the technologies that were deployed for consumers authentication are all often offline. Optical technologies such as Holograms and Security inks are considered good security to have. However, they have 3 major limitations. Firstly, special device is often needed for verification. Operationally, it is not realistic for consumers to have the device readily available to check. Secondly, optical technologies are hard to differentiate with naked eyes. Consumers can be easily fooled with simulated or copied ones. Thirdly, they don’t provide brand owners with visibility along the supply chain,

With greater smartphones usage and penetration globally (GSMA forecast to be 79% by 2025), technologies such as encrypted QR code, image recognition, NFC, augmented reality, artificial intelligence and blockchain present new unique opportunities. They allow interlocking security authentication, product data capturing and consumer engagement to occur among brand owner, distributors, retailers and consumers. As end consumers’ demand for insights of their purchase grow, the new approaches of brand security (Figure 4) create great values for brand owners.

Figure 4. New Approaches of Brand Security Solutions

Data and insights of the distribution channels along the supply chain can now be better analysed. This allow implementation of a more targeted marketing and effective operation. Without embarking on a holistic brand protection program as a business strategy, companies will be missing out greatly an engine to grow their business further.

In conclusion, it is no longer business as usual for Consumer Product companies. Innovative ways are needed to connect directly with customers, improve engagement and understand purchase decisions.

Packaging of the product should not only be attractive; it has to be engaging and smart too! Brands should aim to build relationship with consumers directly. By delivering exclusive relevant content with discounts for cross-selling and up-selling to occur, customer loyalty will increase. To prolong customer satisfaction and strengthen relationship, securing the brand and product integrity cannot be ignored.

If companies want to stay ahead of their game, it is the time to develop a proactive, cost effective strategy to safeguard customer confidence, brand equity and sales revenue.

Article Written by:

Guankai (GK) Ng,

Director – Business Development

Nabcore Pte Ltd



To learn more about Guankai Ng visit his Contributor Bio page or to contact him directly you may email him at the email address listed above.

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