WIXLIB

How Consumer Goods CompaniesCan Lead Transformative,Responsible Change

The consumer industries are criticallyimportant: This is not vanity. They employone in five workers around the world, andthey shape people’s daily experiencesmore so than many other industries. Fromthe comforting morning cup of coffee ortea, to the products that protect andnourish babies, relieve headaches, andsoothe sore muscles, to clothing,electronics, and so much in between,they are there.That’s why it was no surprise that theseindustries stepped up in the early daysof the COVID-19 pandemic.If these issues remainunaddressed, then any socalled recovery (judged, forexample, on a return to prepandemic spending levels)will be false and likely shortlived. The consumerindustries can—and should—step up to lead this effort.Among other measures, they producedpersonal protective equipment, providedtouchless delivery of goods and services,and introduced stringent sanitationpractices to protect employeesand customers.But much more is needed. The pandemicgreatly exacerbated pre-existing andsystemic global challenges, revealingfault lines and enormous flaws in howsociety treats its most vulnerablepopulations (see “Fault linesand flaws, exposed”).

Fault lines and flaws, exposedCollateral damage from COVID-19, at a dashboard level,includes: The fragility of small and medium-sized businesses: Projectedfailure of 20%–25% of SMBs in 2020—for a total of some 60million businesses.1 A crisis in the informal workforce: Severe impact on theworkers who make up approximately 60% of the globalworkforce, and have minimal employment protection, if any.2 Young people’s economic future at risk: According to theNational Bureau of Economic Research, those graduating into arecession experience losses that can last a decade. Millennialsearn 20% less than their Baby Boomer parents did at the sametime of life.”3 The reversal of almost a decade of economic gains: TheUnited Nations and Oxford University estimated that 490million people across 70 countries could fall into poverty.4 Disproportionate impact on already-vulnerable populations:Some 265 million people projected to suffer acute hunger aswell as exacerbated health and wellness effects due to limitedaccess to care for pre-existing conditions such as obesity,diabetes, addiction, and mental health challenges.5

Individual company action isn’t enough. Onlycollective action will create the solutionsneeded at scale. To create and sustain changeof this magnitude, the consumer industriesmust deploy new and disruptive businessmodels—in concert.They must proactively involve companies, organizations, and agenciesthroughout their business and community ecosystems.They must also involve consumers themselves—by providing solutionsthat consumers can back with confidence through their spending, andby engaging consumers in the design and deployment of thosesolutions.Consumers say responsible consumption is important to them;this sentiment has been widely reported. At the same time, over30% say they don’t makeresponsible buying decisionspurposefully because it is too difficult to assess the effects of theirpurchases—much less compare the options.

5The challenges are daunting.But recently, the path totransformative change hastaken on a more tangible shape.Earlier in 2020, the World EconomicForum introduced a vision and missionto advance its focus areas throughunified action. The Forum’s power asan independent, convening body canalso prove game changing. And digitaltechnologies are providing the means.Business commitment and followthrough are the remaining pieces ofthe puzzle.

Consumers’ views (and changing behaviors)Four trends1Holistic HealthThe vast majority (94%) of consumers in Accenture’songoing consumer research have made at least onehealthy change since the pandemic began—and mostplan to continue this behavior in the future. Thechanges consumers are making indicate a multifaceted definition of health, spanning health-consciousshopping, mental wellbeing and gathering with othersto exercise. Nine out of 10 consumers see health astheir own responsibility (vs. their doctor’s), and, asindividuals take more responsibility for their ownwellness, they are also actively seeking more userfriendly, holistic solutions that they can find in theirown time. Increasingly, they see more companies aspossible contributors to holistic health—and expect aone-stop shop supported by cross-companycoordination and collaboration.2Closer to CommunityFifty-six percent of the survey participants arebuying more from local stores, and 80% of thatgroup plan to continue the practice. Concurrently,56% of consumers are buying more locally-sourcedproducts, and 86% of that group expect to continueto do so. Moreover, these behaviors are on track tocontinue. Consumers increasingly expect to developrelationships with, and share responsibility for, thebusinesses they frequent and the people who workthere.

3Responsible ConsumptionSixty-five percent of consumers expect businessesand governments to “build back better”—sustainably and responsibly. And 63% reported thatthey are personally limiting food waste by planningtheir shopping decisions more carefully and usingup what they purchase. Additionally, even in themidst of severe health and economic stress, 60%are buying sustainable or ethical products, withmost of that group saying that they will continuedoing so.4New (and Lasting) Ways toEngagePeople have increasingly migrated their activitiesonline—and in many cases, engaged in entirely newways of interacting. From doctor appointments, tofitness classes, concerts, and get togethers with familyand friends, experiences are increasingly virtual. Newoccasions—and digitally-powered business models—continue to emerge. And,75% say they will continueonline/virtual interactions after the pandemic.Consumers of all ages have moved up the digitallearning curve; for example, historic ecommerceholdouts permanently doubled the proportion ofproducts they buy online.

A unifying visionfor consumer industriesThe unifying vision articulated by the World Economic Forum and its partnersin the Consumer Industries community and the Future of Consumptionplatform puts the societal interests of humans at its core:are first and foremost human-centric, creating“ Weshared value and operating with integrity toensure a sustainable and resilient future.”Human-centricity, its focal point, meansthat industry actions will be shaped firstby a holistic consideration of humanneeds. Shared value means that actionswill benefit all stakeholders—individuals,business, governing bodies, and theplanet on whose resources they depend.And operating with integrity to ensure asustainable and resilient future aborativeActionsthat all actions will support long-termeconomic viability.The Forum and the consumer industries’community developed this vision andarticulated priorities to bring it to life(see graphic below).Read the full World Economic Forumreport on these recent activities.Improve ConsumerHealth & Well-BeingAdvance SustainableConsumptionAccelerate InclusiveGrowthBuild Trust &TransparencyBetter Nutritionfor AllEnable ResponsibleConsumer ChoiceNew Deal for theWorkforceESG LeadershipOngoing: Upskilling& ReskillingCollaborative PilotOngoing: GlobalSupply SystemDashboard (GSSD)

What’s different nowNew business models and collaborative ecosystemsCompanies have worked on these verycomplex, widespread, and deeply rootedproblems for a long time in one form oranother. What’s different now are theinnovations brought about by the fourthindustrial revolution, which have opened thepossibilities of new capabilities, and new waysin which people, companies, governments,and other entities can collaborate at speed.Used well, these factors can tip the balance infavor of sustainable solutions at scale. Theyhave enabled the disruptive business modelsand the potential for collaboration throughhuman-centric ecosystems that bring suchgoals within reach.For example, circular models can ensure thatproducts and materials are used (and reused) to yield the most possible utility.Inclusive ownership models, by design,propel commercially viable businesses thatalso contribute to the communities in whichthey operate.All these models create significant change,integrating business and societal value whichis amplified by new technologies and anecosystem approach.The imperative for collective action, as illustratedthrough packagingProviding and promoting sustainable packaging is a more complex issuethan meets the eye—and just one example of the urgent need forcollective action. In fact, every element of the value chain mustcontribute to realize a widespread solution. The problem is not justoverreliance on certain types of packaging (company behavior). It is alsoconsumer confusion about which packaging types are more sustainablethan others, and a lack of widespread ability to recycle differentmaterials. Lasting solutions will demand holistic action, includingconsumer education; municipalities investing in—and standardizing—recycling facilities; and product and packaging manufacturers agreeingto use a range of materials that facilities can handle.

Disruptive Business Models open new possibilitiesNew Business ModelsBUSINESS MODELELEMENTSConsumer/ CustomerProduct/ ServiceWho do youtarget?ChannelWhat doyou offer?Revenue ModelHow doesvalue reachthe consumer?How do youcapture value?DISRUPTIVESTRATEGIESAchieve relevance,competitiveness and ingOn-demandIncreasingaccessEnd to endsolutionExperience AsA red ValueChainEMERGENTCOMPONENTSReinvent the solution andmethod of deliverySource: Accenture AnalysisDisruptive ervingOn-demandIncreasingaccessEnd to endsolutionLancôme’s LeTeint Particuliermanufacturescustomizedfoundation at thebeauty counter,based on skinanalysisLoop reduces use ofsingle-use plasticthrough a convenientdirect-to-consumermodel providingbranded products inreusable packaginggoPuff’s on-the-goconvenience storedelivers from localproviders inminutesRural Tao Baointroducesecommerce tosmall villages inChina through localentrepreneurs/guidesIKEA’s purchaseof Task Rabbitenablesconsumers tobuy their IKEAfurniture and getit assembled

Four examples illustratewhat’s possible. Each isaligned to the WorldEconomic Forum’sconsumer industry goals.12Improving consumer healthand well-beingAction:Better nutrition for allAdvance sustainableconsumptionAction: Enablesustainable consumer choiceImperfect Foods is an online social enterpriseselling high-quality produce that either doesn’tmeet store standards (for size or looks) or isconsidered surplus. Imperfect orchestrates anecosystem of more than 200 growers, food bankpartners, and private partners, including Krogersupermarkets, and Feeding America, a nonprofit.In 2018, (the most recent data available) while 20billion lbs. of food went to waste on US farms,Imperfect recovered 1149 million lbs.—selling 325million lbs. and donating 824 million lbs. to foodbanks.6C’est Qui le Patron (Who’s the Boss)?! usesan inclusive business model to ensure thatit creates broad value. In doing so, it alsoillustrates the power of building trust andtransparency. The farmer-members of thisFrench dairy cooperative set thecompany’s overall direction, then engageconsumers in each subsequent phase,e.g., voting to choose new products anddetermine all product specifications,choosing packaging and setting prices. 7