NEW YORK: Best Buy, PepsiCo and Whirlpool are all seeking to use consumer insights to drive the innovation process, an approach which is said to be particularly important at a time of financial uncertainty.
These three companies were among the contributors to the Collaborate to Innovate report, produced by the CMO Council in conjunction with AT&T, Sterling Commerce and the BPM Forum.
Based on a survey of 400 executives, this study found that 79% of participants viewed their customers as being "vital" partners to their business, falling to 72% for suppliers and vendors, and 56% for technology providers.
In contrast, just 34% of this cohort elevated their marketing and communications agencies to such a status, with 26% saying the same for retailers.
Marc Gordon, vp of finance at Best Buy, argued that acquiring in-depth knowledge about the visitors to its 3,000+ stores was essential both to research and development, and to its overall operations.
"The better we understand consumers' needs, the better we can predict demand, the better we can give our vendor partners or business partners insights as to where consumer behavior is going," he said.
"We as the retailer have the face-to-face experience with the customer that allows us to gather the insights as to what features, which elements of the products sell well with the customer."
"I think … collaboration and having those customer insights through behavioral patterns really helps both us and the manufacturer sharpen our game."
John Johnson, of PepsiCo's strategy and innovation unit, argued that the food and beverage giant is placing its focus on "big bets" which will make a real impact within the sector as a whole.
"We conduct a significant amount of market research that enables us to understand what our customers really want," Johnson said.
"Our goal is for us to turn those insights into foresights so that we can proactively prepare for what is coming and what the customer wants."
A key element of this process, he added, is "sensing" which areas of demand are being under-served at present, be it from a corporate or popular perspective, and reacting accordingly.
"We need to start by addressing needs, rather than coming up with the next big idea before fully understanding the business scenario we are trying to solve," Johnson posited.
Such a strategy has a substantial value in the economic downturn, when buyer behaviour has undergone a substantial transformation, providing major obstacles, but also a range of opportunities.
"People may not choose to go out to the movies to watch a film, but rather watch a movie at home in order to save some cash," said Johnson.
"When watching a movie at home they will still go buy a bag of Fritos and a bottle of Pepsi versus going out to eat."
Brian Hancock, vp, supply chain, at Whirlpool, similarly suggested that analysing current and potential shopper preferences offers advantages in terms of short-term adaptability and long-term planning.
"I think understanding what consumers are buying versus what we're forecasting for them to buy allows us to be a little bit more flexible," he said.
"There's a lot of change coming for us and it's a matter of how quickly we will be able to respond when either our trade partner or the end consumer changes the way they want to do things."
Data sourced from The CMO Council; additional content by Warc staff