IBM Survey Serve as “Wake-Up” Call to Consumer Products Companies

IBM Survey Serve as “Wake-Up” Call to Consumer Products Companies

A new global survey of over 100 retailers and consumer products companies released today by IBM Business Consulting Services reveals a major disconnect between the views of retailers and the priorities of consumer products companies, one that threatens the productivity of the industry.

Consumer products companies are facing a dramatic shift, moving from the consumer as the primary focus to an expanded view that elevates their retail customers to a place of equal importance. IBM’s findings, from surveys conducted by IBM Business Consulting Services and the Economist Intelligence Unit, reveal that retailers view their suppliers as falling short in key areas.

Only nine percent of retailers surveyed by IBM felt their suppliers had a good understanding of their business objectives. In fact, retailers expressed low satisfaction with suppliers across many key areas of their relationships, especially those that help retailers differentiate themselves, such as consumer insight development and promotional design and execution.

Retailers themselves say they are asking suppliers for insightful shopper viewpoints and merchandising assistance, all with the ultimate goal of helping them build their business. Retailers are looking to their suppliers to leverage consumer and shopper insights into improved product innovation, shopper-targeted promotions and recommendations on merchandising and new store formats. For example, the survey revealed that retailers with over US$1 B in sales viewed store-level customer insights and merchandising and category management services as their top two requirements from suppliers over the next five years.

“Having historically focused on the consumer as their only ‘customer,’ consumer product companies must now seek ways to better understand and provide added value to their retail trade customers as well,” said John Breuer, Consumer Products Industry Partner, IBM BCS. “They have to balance the rapidly evolving needs of savvy consumers with powerful retail customers who are demanding exclusive services, pricing and products. To do that effectively, CP companies must redefine the way they do business.”

Read the complete Press Release