Consumer preferences are changing: Here’s what CSCOs need to know

It is no surprise that consumers are gravitating toward organizations that not only commit to, but put into practice certain critical values of their brands.

They are opting to support and get behind organizations that align with their priorities and belief systems. Looking beyond the purchase or transaction, people are increasingly ready and willing to abandon brands that don’t support their values and expectations when making purchasing decisions.

Accenture recently published its annual consumer research in the “Life Reimagined” report, specifically examining five distinct areas beyond price and quality that are increasingly driving consumers’ decisions.

These areas are health and safety, service and personal care, ease and convenience, product origin, and trust and reputation. The results speak for themselves: half (50%) of those surveyed are emerging from the pandemic having reimagined their behaviors and values as consumers.

Of these “reimagined consumers,” Millennials and Gen Z have shown themselves to be the most socially and environmentally conscious consumers ever. This changing tide is increasingly backed by regulators, policy makers, investors and stakeholders, indicating that these trends are here to stay and companies are expected to reduce their social and environmental impact.

What’s more, these new consumers are looking at products and companies in their entirety­—from what the products are made of, how they are produced, and how they are shipped. Three-quarters (76%) of respondents to Accenture’s survey say they are attracted to brands that source services and materials in highly ethical ways.

While consumer’s ethical expectations are increasing, so too are their expectations for ease and convenience. Accenture found that 50% of reimagined consumers are disappointed by many companies’ failure to provide enough support and understanding of their needs during challenging times.

For many, these needs are rooted in how they receive their products and the timeline for delivery, therefore requiring companies to rethink their supply chains.

Decentralized networks

These notable shifts in consumer behavior are having substantial impacts on the marketplace beyond key industries, like consumer-packaged goods (CPG) and retail. The CPG industry is struggling to break out of unagile and wasteful supply chain systems, which is made clear through the fact that CPG companies account for one-fifth of all freight shipping in the United States.

In our “Business Futures” report, Accenture explored how the use of new technologies, such as route-optimization algorithms and quantum routing, allow organizations to serve more customers while shrinking their footprint. Likewise, the report found that decentralized networks that use on-demand production, which Accenture calls “supply unbounded,” have minimized the impact of supply on businesses while improving the experiences they deliver.

As physical constraints, such as the length of supply chains, are major barriers to meeting shifting expectations, these technologies and methods to decentralize networks are critical to create more resilient and sustainable supply chains.

The ability to improve sustainability in a company’s operation requires identifying what the major contributors to its environmental footprint are and to see where those technologies and methods should and can be employed.

A recent SAP survey found that while 64% of consumer product respondents agreed that suppliers are major contributors to their company’s environmental footprint, visibility into the supply chain remains low across all sectors.

Increasing visibility is not only important for companies to address issues in their supply chains, but also to allow them to meet “reimagined consumers” expectations of transparency.

Nearly three quarters (71%) of reimagined consumers who responded to Accenture’s Life Reimagined survey believe that companies/brands are just as responsible as governments for the health of societies. Furthermore, a recent Forrester study finding that 70% of the most empowered consumers believe a company’s social responsibility is important.

Business leaders—especially the chief supply chain officers (CSCOs)—must therefore pay close attention to changing preferences and expectations to ensure business operations are flexible and meet the needs of consumer groups.

In addition to evaluating emerging trends, varying consumer habits and interests can be key indicators of the changes supply chain experts must make across the value chain. In order to drive growth and effectively advance the supply chain to meet customers’ needs, companies need to rethink their businesses through the lens of experience by doing the following:

• Investing continuously to understand customers’ evolving needs and mindset, especially regarding sustainability and ethical expectations.
• Reimagining business practices and meet rising motivations with agility and speed. Companies need to start proactively evaluating how to address supply chain obstacles and improve the customer’s experience, instead of conducting business with a reactive approach.
• Structuring the entire organization to advance supply chain processes to create experiences that capture consumers’ evolving demands across all aspects of operations. The “reimagining” proactive approach needs to be reflected in marketing, sales, innovation, R&D, customer service—everyone across the company who is expected to deliver on these experiences must see and understand these new motivations.
• Evolving the business model, especially as the pandemic has exposed critical supply chain disruptions. As brands emerge from the pandemic, moving out of pilot mode might require a new business model with better pricing, different distribution channels or new revenue streams. Any of these paths will likely require companies to align technology, data, and talent into one system. An evolved business model will allow brands to continuously improve experiences and give customers exactly what they desire without sacrificing profitable growth.

Meeting—and better yet, exceeding—the expectations of consumers with the actions of investing, reimagining, structuring and evolving is critical for businesses to succeed. And this success starts from, and is intrinsically tied to, the efficiency and productivity of supply chains and CSCOs’ strategic priorities.

In a post-pandemic world, supply chains must be embedded with transparency, resilience and sustainability—or brands risk their own longevity.