Cognizant Reports

U.S. Consumer Goods: Putting Social, Mobility, Analytics and Cloud to Work
By deploying SMAC technologies as an integrated stack, U.S. consumer goods companies can improve operational nimbleness, unlock operational efficiencies and grow opportunities all amid the sluggish economic recovery, weak domestic growth, unabating cost pressures, tough private label competition and a significant shift in demographics and business models.

cognizant reports | June 2013

Executive Summary
For the last 50 years, consumer goods (CG) manufacturers have enjoyed year-over-year growth in developed markets as the baby boomer population increased spending as their families grew. Today, growth is expected to come from the new middle class in emerging markets and from increasingly targeted micro-markets in developed markets. Winning in this environment will require new analytical and technical skills in several key areas:

Social media: The new way to build meaningful, authentic and relevant conversations with new and prospective consumers. Mobility: The path-to-purchase is fast evolving. Mobile engagement, whether with smartphones in the developed world or feature phones in emerging markets, is compelling consumers to shop and check prices on the fly. Analytics: To create value from big data, CG companies need to invest in big insights. Cloud computing: Companies are increasingly looking for new, affordable ways to house information, including analytics-related data. Taken collectively, we refer to these capabilities as the SMAC StackTM. For the consumer goods industry, the case for putting the SMAC Stack to work is driven by two broad directional forces: macro industry trends and technology imperatives. These issues are exerting competitive pressures and creating new opportunities for CG companies. Even though spending by U.S. consumers is rising, a variety of factors (cost of living and employment challenges, among others) has reduced their buying power. This has forced many buyers to become increasingly value-conscious a situation that is impacting businesses across the CG spectrum. The painfully slow economic recovery underway in the U.S. is adding to the challenges faced by many CG companies, particularly those whose profitability has stagnated during the past few years. They continue to face cost pressures while competition from retailers private labels intensifies. Given diminishing growth opportunities in developed markets, U.S. CG companies are venturing into global markets adding complexity and cost to their operations.

Furthermore, a significant shift in demographics and business models is underway in the U.S. The 50-million strong, digitally-savvy millennials are expected to soon constitute the biggest segment of the domestic population. The rise of digital consumerism is also changing how CG industry conducts business. Many consumers now prefer to buy online and use coupons offered through digital channels. CG companies need to quickly adapt to these digital realities and foreverchanged consumer preferences, while focusing on improving operational metrics and building competitive advantage. Moving in this direction will require quickly shifting strategies to improve operational agility and responsiveness. CG companies should consider investing in social, mobile, advanced analytics and cloud technologies (the SMAC Stack) as an integrated set in order to reap the full business benefits. This can have a multiplier effect on benefits, and serve as a foundation for breakthrough results in business performance. For example, using SMAC technologies, companies can improve customer engagement by delivering differentiable and valuable digital experiences. With social media, it is now same here easier to market directly to millions of customers unique markets with varying preferences and tastes. Powerful analytics tools in conjunction with social media, mobile devices and cloud technologies can help CG marketers identify and target customers and customize campaigns at reduced costs. The SMAC Stack can also play an important role in driving operational efficiencies and handling complexity (i.e., product configuration, crosssegment marketing initiatives), especially for companies that are aggressively moving into global markets. For example, analytics, along with demand signal repositories,1 can help CG companies collect and glean deeper insights from operational data quickly identify customer demand and sync that demand with supply in real time to more effectively serve customers. And by using mobile devices and cloud technologies, companies can improve productivity by enabling employees to work from anywhere multiplying improvements in operational efficiency. As this white paper demonstrates, CG companies that invest in the SMAC Stack stand a better chance of increasing efficiencies, deliver-

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Decreasing Cost to Income Ratio*

0.87 0.85 0.83 0.81 0.79

2006

2007

2008

2009

2010

2011

*The cost to income ratio of the top 50 U.S. consumer goods companies. The list comprises the top companies based on revenues for FY 2012 from each of the sub-categories of the consumer goods industry in the U.S.
Source: CapitalIQ and Cognizant Research Center Analysis

Figure 1

ing greater business value and unlocking new growth opportunities.

improving operational efficiencies and providing more command and control for handling growing operational complexity. Slow Economic Recovery The U.S. economic recovery remains sluggish. IRIs MarketPulse survey notes that even after four-plus years (the official end of the global recession), 22% of consumers still find it difficult to afford groceries. Yet the consumer-spending and savings rate has increased, albeit marginally, over this time frame.3 This is a positive sign for CG companies; it means consumers may have more to spend as confidence improves. Financial Performance Our analysis of the Top 504 CG companies in the U.S. reveals that they have successfully managed to lower their cost-to-income ratio from 2006 through 2010 recording a marginal increase in 2011 (see Figure 1). During that time, the cost of goods sold constituted, on average, 66% of the

Driving Forces
The U.S. consumer goods industry is beset with several challenges. A slow economic recovery and competition from private labels is putting pressure on the bottom line. The emergence of the digital consumer (i.e., business conducted over digital media), commodity price volatility, shifting demographics and the expanded growth focus on global markets is making the consumer goods business more complex, and is negatively impacting operating metrics. With the significant shift toward digital transactions,2 the capabilities of the SMAC Stack can help CG companies make the strategic shift required to survive and compete. This starts with more effective customer engagement driving sales through lower-cost, higher-profitability channels and cascades across CG enterprises by

Break Up of Costs*
600 500 US$ Billions 400 300 200 100 0 2006 Cost of Goods Sold 2007 SG&A 2008 2009 2010 2011

Tax, Interest, Other

*Break up of the costs of the top 50 U.S. consumer goods companies. The list comprises the top companies based on revenues for FY 2012 from each of the sub-categories of the consumer goods industry in the U.S.
Source: CapitalIQ and Cognizant Research Center Analysis

Figure 2

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Flat Net Income Margin*

800 600 400 200 0

US$ Billions

2006 Total Revenues

2007

2008 Net Income

2009 Total Expenses

2010

2011

*Net income margin of the top 50 U.S. consumer goods companies. The list comprises the top companies based on revenues for FY 2012 from each of the sub-categories of the consumer goods industry in the U.S.
Source: CapitalIQ and Cognizant Research Center Analysis

Figure 3

total expense for the these companies (see Figure 2, previous page). Sales, general and administrative SG&A expenses constituted, on average, 31% of the cost of total goods sold from 2006 to 2011, although the industry managed to marginally reduce this expense from 2008 through 2011 (see Figure 2, previous page). Net profit remained relatively unchanged between 2006 and 2011 as total revenues and total expenses grew almost proportionately during that period (see Figure 3). Managing and Competing with Retailers The rise in value-seeking consumers is a direct aftereffect of the global recession. For instance, consumer resistance to price increases is propelling private labels to grab market share from traditional CG companies by offering compara-

tively cheaper products, albeit in select categories. According to IRIs MarketPulse survey, 50% of consumers are buying more private-label brands post-recession compared with pre-recession levels. In 2011, private labels accounted for approximately 19% of dollar sales and 23% of unit sales across CG channels.5 Retailers are employing their understanding of consumers buying behavior and using insights generated from the analysis of point-of-sale transaction data to promote and push more high-margin private labels. CG companies are under pressure to deliver products at lower prices, and manage retailers that seek products with everyday low prices. Consumer goods manufacturers also face a challenge to enure that their products secure appropriate shelf space in retailers physical and online stores.

Global Growth is Heavily Dependent on the Non-OECD Economies

8 6 4 2 % 0 -2 -4 -6 -8 2006 OECD 2007 Non-OECD 2008 2009 2010 2011 2012 2013 Contribution to annualized quarterly world real GDP growth 8 6 4 2 -2 -4 -6 -8 % 0

Note: Calculated using moving nominal GDP weights, based on national GDP at purchasing power parities.

Source: OECD Economic Outlook 90 database.

Figure 4

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Seeking Growth by Expanding Globally With mature markets such as the U.S. and the UK expected to grow slower,6 competition has intensified putting margins under pressure. The need to grow the top line is leading U.S. CG companies to tap opportunities globally. This shift is clear from U.S. CG exports, which doubled from US$40.3 billion in 2005 to US$80.3 billion in 2011.7 Emerging markets such as Brazil, India and China are expected to drive global GDP growth. In fact, the Organization for Economic Cooperation and Development (OECD) estimates that these countries will account for 75% of the global economic growth between 2012 and 2013 (see Figure 4, previous page).8 Rising Costs and Complexity in Operations Energy and commodity input costs for CG companies are rising. Weak economic conditions and volatile weather are undermining essential global commodity supply chains. Water, power and labor shortages are also expected to increase the cost of products. Streamlining manufacturing operations and containing energy costs, which account for 3% to 8% of total production costs, is crucial for CG companies that want to improve profitability.9 The planned expansion into global markets serving diverse customer segments with customized products is expected to result in

unprecedented complexity in the supply chains that support them (see Figure 5). Demographics and the Rise of the Digital Consumer In the U.S., baby boomers are expected to account for 40% of spending, while owning 60% of the nations wealth, by 2015.10 However, the 50-million strong, digitally-savvy millennials segment will consti- The 50-million tute the biggest percentage strong, digitallyof the U.S. population in the savvy millennials years to come. CG companies should therefore prepare to segment will deal with consumers who constitute the are comfortable with digital biggest percentage and those who are not. Rapid innovations in technology and social interactions have given rise to the digital consumer, who has different expectations and demands. Today, mobility and 24/7 social connectivity is allowing consumers to conduct a large part of their shopping over smartphones, the Internet and through social media, bringing about mobile commerce, or m-commerce. Value-conscious consumers are turning to digital media and tools that reduce their shopping bills.

of the U.S. population in the years to come.

Drivers of Complexity in the Consumer Goods Supply Chain

Customer demands, expectations and needs Product proliferation or variance (stockkeeping units/SKUs, excess product variant configurations) Increasing number of locations (customers, suppliers, internal operations) Increasing supply chain risk (economic, geopolitical, environmental) Managing supplier risk Globalization of supply chain Pace of new product introduction and innovation Talent Emerging markets Distributed manufacturing operations and supporting capabilities Compliance with government and trading partner mandates New competitors in market(s) Outsourcing to third parties Mergers and acquisitions Other 3% 72% 65% 51% 51% 51% 50% 49% 48% 38% 35% 34% 30% 28% 24%

Source: Technology Trends Report 2012, Consumer Goods Technology and Gartner

Figure 5

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An IRI MarketPulse report says that newer generations those that are even more tech savvy than millennials will increasingly leverage the Internet to seek deals and information on products they want to buy. The report further states that the number of channels visited by shoppers will continue to decrease to be limited to those that offer them the best value.11 Business Models Embrace Digital The forces of technology are rapidly changing the contours of the CG industry landscape. The digitally-enabled world is driving businesses to provide seamless service to customers across regions, time zones and business channels. CG companies need to examine how they CG companies need can rewire their business to examine how they models to adapt to the new digital realities of the marcan rewire their kets they operate in.

(researching products, making use of coupons, the Internet and online deal sites) as an integral part of their money-saving efforts (see Figure 6).13 In 2012 alone, consumers saved US$3.7 billion using the 305 billion coupons distributed by CG marketers.14

Putting the SMAC Stack to Work

The stack of social media, mobile, analytics and cloud technologies (SMAC Stack) can help CG companies in their efforts to react and stay ahead of ever-changing consumer behavior by improving their operational metrics and thus building competitive advantage. Strategic Shifts Required to Survive and Compete To survive in this highly competitive and fast-changing business environment, CG companies must fast-track a shift in strategy, and overhaul their operating structures to be more nimble and responsive. A key pillar for companies treading such a path is an IT function that provides the necessary tools and technologies for competing in an increasingly digital world. The SMAC Stack of technologies is ideally suited to serve CG companies in such a scenario. However, to reap its full benefits, companies should deploy them as an integrated stack. This can result in a multiplier effect (e.g., mobile inputs driving realtime analytics) and serve as a foundation for breakthrough results in business performance (For more insights, see our white paper Dont Get SMACked).

business models to adapt to the new digital realities of the markets they operate in.

Consumer preference for e-shopping is now influencing the CG industrys online strategy. Nielsen reports that online sales are growing at a CAGR of 25%, and estimates that by 2015 they will contribute 5% of total CG sales up from the 2% two years ago.12 According to the latest IRI MarketPulse Survey, more than two-thirds (69%) of consumers are making shopping lists to carefully plan their grocery shopping trips and save money. The survey adds that consumers have accepted digital media

How Consumers Save Money

Digital Media Usage (% of Shoppers - Top 2 Box) I download coupons from manufacturer Web sites I download coupons from retailer Web sites I download coupons from couponing sites, such as SmartSource I research products on Web sites I visit online deal sites, such as Woot.com and Groupon 0% * Not Asked in Q1 2011 10% 29% 26% 23% 24% 24% 19% 21% 21% 20% 30% 40% 40% 42%

35% 35% 35%

33% 31% Q1 2013 Q1 2012 Q2 2011* 50%

Response base: n= 2000 for each of the MarketPulse Surveys (Q1 2013, Q1 2012 and Q2 2011)

Source: IRI MarketPulse Survey, Q1 2011 - Q1 2013

Figure 6

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Consumer goods companies have relatively less physical exposure to their customers since retailers are, most often, the endpoint in the value chain. Also, retailers have a head start in the adoption of social media. Having Web stores and digital touchpoints such as a presence on social media networks and mobile apps that allow consumers to research, shop and share feedback on products certainly helps. However, moving in this direction requires CG companies to rethink their IT strategy focusing on leveraging new technologies to not only reduce costs but also create new business capabilities. It is also essential for these businesses to manage and make effective use of the significant volume of social and customer data that is generated by customers using social media networks and mobile devices during their shopping expeditions. This calls for marketing and IT departments to collaborate seamlessly in order to deliver differentiable and valuable digital experiences to customers and gain sustainable competitive advantage. (For additional insights, read Time for Consumer Goods Companies to Rethink Digital Marketing.) Using the SMAC Stack to Engage Customers and Drive Sales For CG companies, the game has changed from solely selling products to courting, engaging and converting customers into product advocates. As customers increasingly turn to digital channels, companies must follow the same path to interact and influence them. Companies can start by deploying strategies that complement their traditional marketing efforts and by identifying which digital touchpoints are the most effective.

It is here that social media, mobile, analytics and cloud technologies play a major role. Some points to consider:

Use social media to better engage customers and drive sales: According to a Bain report, companies noted that customers who engaged with them over social media spent 20% to 40% more compared to those who did not.15 Similarly, McKinsey points out that a majority of consumers rely on referrals and look to user reviews when making their purchase decisions.16 Cost savings is another area where social media performs better than traditional media. Social media lowers the cost of marketing, enables targeted marketing, provides data to mine for insights and is a more effective customer retention tool. With many customers using social media for longer periods of time, daily, it is a source of unfiltered, direct feedback on products and on customer needs (see Figure 7).

CG companies can combine analytics and social media data to gain actionable insights from customers social interactions. These provide key information about consumer needs and preferences, which can be used to innovate and develop new product lines specifically for certain customer segments. For example, Unilever partnered with London-based Face Co-creation and its online community to develop Axe Twist, a fragrance that changes throughout the day.)17 Similarly, Frito-Lay used social media to solicit new flavors for its potato chips that are tailored to local tastes.18

Expected Benefits from Social Media Investments

Benefit Consumer insights Brand protection Additional sales revenue Lead generation Improvements in contact center operations Reduction of returns Note: Multiple Responses Permitted 8% 28% 23% 48% 88% 84%

Source: IDC Manufacturing Insights and Consumer Goods Technology, 2012

Figure 7

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Leverage mobility to market to millions of unique customers: Mobility is a powerful sales channel for consumer-facing businesses. Today, more and more people are relying on smartphones as their primary communication, entertainment and infotainment device. Companies are finding that it is more efficient to send personalized offers and product recommendations over mobile phones to customers when they are in stores. This is important, given the fragmented media landscape. Also, according to published reports, consumers are more open to receiving targeted messages from trusted retailers. Marketers are finding that they no longer have unique markets, but customers in the billions, with specific needs and expectations. Using social media and mobile devices, CG companies can target these niche markets and consumer segments with customized products. The pervasiveness of mobility and connectivity is invaluable, as it allows companies to keep in touch with customers anytime and anywhere. For instance, companies can leverage the in-store purchase behavior of a consumer (who picks up and scans a package of cheese in a grocery store) to send contextually-relevant messages (recommending a cracker that goes well with the cheese.) Apply advanced analytics to engage with the right customer at a lower cost of interaction: Rapidly shifting consumer demographics create unique challenges for CG companies in developing and delivering products. In such a scenario, companies can use advanced analytics to accurately segment markets using the significant amount of consumer data that flows through their systems of record and engagement (i.e., social platforms).

Powerful analytical capabilities can help companies enhance awareness of their brands by engaging the right customer at the right place with the right product. These technologies can also help streamline marketing activities and better measure ROI by allowing CG companies to analyze the performance metrics of marketing initiatives, track conversion rates of customers, and help optimize spending on leads by moving from payper-click to pay-per-leads. Titan Eye, for example, uses analytics to understand customer preferences and segment them accordingly to provide a targeted range of products (e.g., a city with a higher density of college students preferred fancy designer lenses compared with another city with more senior citizens). Further, it rolled out online eye testing (which proved to be a phenomenal success) using Facebook after finding that a large percentage of Titan Eye customers were between the ages of 12 and 30, and were most active on social media.19 Deploy cloud technologies to cut marketing and related operational costs: Functional areas such as marketing can leverage ondemand cloud-based technologies to reduce the cost of marketing campaigns through payper-use pricing models, while reaching out to diverse customer segments. These tools also allow them to develop, test and measure the effectiveness of campaigns easily at significantly lower costs. Software as a service (SaaS) and other cloud models help companies with global operations to reduce technology costs by optimizing, simplifying and increasing the agility of their IT operations. They also enable companies to easily afford best-in-class computing capabilities. Cloud technologies, which are finding increasing acceptance in many industries, can also improve CG companies global operations while significantly optimizing infrastructure, support and collaboration costs. General Mills, for example, used a cloud platform to launch an e-commerce storefront to bring its gluten-free product offerings to the market at half the cost and time compared with conventional IT approaches. In another case, Chiquita Brands International deployed a cloud-based HR system for 26,000 employees spread across 42 countries and achieved

The ability of CG companies to fine-tune their promotions and pricing, and identify potential markets and consumer segments, will be a critical factor in building and sustaining competitive advantage. Analytics is the right fit for companies wanting to gain such an advantage. With so much information flowing throughout the organization, analytical tools can help decision makers separate important data signals from noise. Similarly, robust analytical capabilities are valuable tools for reducing the complexity of dealing with diverse markets and unique consumer segments.

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30% savings in upfront costs compared with traditional on-premise ERP systems.20 Driving Future Growth by Transforming Business Models Companies that continue to transform their business models to better serve the ever-evolving digital consumer are better positioned for success. In its predictions for 2012, IDC Manufac-

turing Insights expects IT organizations to make foundational investments in a master IT model that holistically embraces SMAC technologies to deliver more business value and better IT productivity (see Figure 8, next page).23 As noted in our earlier Dont Get SMACked white paper,24 areas that have the most potential for CG companies to implement and benefit from the SMAC Stack are:

Quick Take
How Analytics and Mobility Can Drive Operational Efficiency, Productivity
The top 50 CG companies in the U.S. have been unable to reduce the cost of their operations, which have continued to grow in tandem with revenues. Similarly, net profit margins have remained at the same level over the past five years. Companies expanding into global markets are further burdened by regional demographic diversity and complex supply chains. Improving operational efficiencies and employee productivity is therefore an imperative for CG companies, in our view. Solutions such as demand signal repositories combined with analytics help companies use downstream data to optimize key parameters such as cycle-time reduction, on-shelf availability of products and waste reduction initiatives. Demand-driven companies reap benefits that go beyond managing inventory to include stronger relationships with retailers, new product introductions and improved promotional capabilities. Demand-driven businesses function better than others in reducing supply chain costs, in perfect order performance and in managing inventory. According to Boston Consulting Group research, companies that use advanced demand-driven supply chains can reduce the inventory they carry by 33%, achieve 20% improvement in their delivery performance and significantly reduce their supply chain costs.21 Analytics improve operational efficiency: Among the future success factors will be the capability of CG companies to serve demand rather than just build capacity to meet the demand. It is imperative, therefore, for companies to create scalable capabilities that flex with changing demand rather than invest purely in production capacities. Companies desirous of having such capability need exceptional data management tools and technologies, such as analytics that can allow them to glean insights from data gathered from mobile and social platforms in real time. Efficient and nimble supply chains can provide significant opportunities for competitive advantage. Given the advancements in analytics, it is possible for companies to optimize and more efficiently run their complex supply chains. There is an increasing focus to continuously reduce operational costs to deal with resource constraints and rising inputs costs. Here again, analytics can be deployed to identify inefficiencies.

Mobility enhances employee productivity: CG companies can tap into mobile capabilities to improve employee productivity by enabling workers to collaborate and work even while on the move. Employees who are mobile can use their own devices to stay connected to their teams, peers and customers. Mobility can help companies bridge visibility gaps and improve employee efficiency and effectiveness by better managing resources both people and assets when there is less visibility or they are on the move. This approach could allow an analyst or field sales executive to act on insights rather than spending three-fourths of their time on data capture and dissemination. It could also improve operational excellence by proactively anticipating problems and opportunities by making critical data available in real time.22 This is especially applicable to employees working in retail merchandising, field service, warehouse operations, sales and marketing.

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IT Investment Priorities of Consumer Products Manufacturers

Emerging Technology Area Big data/Analytics Mobility Cloud computing/Software-as-a-service Social business tools Mean Score 3.6 3.3 3.0 2.9

n=355 Note: Respondents were asked to rank the emerging technology areas on a scale of 1 to 5, with 1 being not important and 5 being most important.
Source: IDC Manufacturing insights' Supply Chain Survey, 2012

Figure 8

The customer interface: Keep customers engaged through social media and mobile devices in real time and influence their behavior on their path to purchase. The partner interface: As customers increasingly engage and interact with CG businesses over digital mediums, these companies can collect important information from customers regarding their preferences and choices in developing new products. The machine interface: Certain categories of consumer goods (e.g., refrigerators, air conditioners) enabled with connectivity technologies such as Bluetooth can provide feedback on the machines usage and performance to both the manufacturer, who can use the information to improve the product, and the user, who can use it to understand her usage of the product. Consider a machine that can share critical performance data in real time with appropriate service engineers, who can fix issues as they arise to help ensure optimal machine performance. The employee interface: The SMAC Stack, when integrated, allows employees to communicate and collaborate from anywhere and at any time, thus helping to improve their productivity. Resource constraints and climate impacts are only expected to grow driving consumer goods

companies to center their growth strategies on sustainability. These businesses need to focus on making product lines cheaper to produce and sustain. They also need to effectively engage customers in supporting sustainable products. Driving such initiatives successfully will hinge upon companies ability to spot the right trends, preferences and insights from the consumer data that is now available. A report from EKN Research and Consumer Goods Technology says that among manufacturers with plans to run big data projects, 64% intend to do so in the next two years. Supply chain, customer development and marketing are the top focus areas.25 Undoubtedly, efficient data management will be a key driver of competitive advantage for companies in the future. The confluence of big data, social media, mobiles, analytics and cloud can help companies deal with the uncertain economic environment, alleviate cost pressures, improve operational efficiencies and drive growth. As competition intensifies, companies with the skills to better segment customers, glean more granular insights and intelligence from customer data, personalize messaging and products, and develop efficient, effective promotional campaigns can gain an edge over the competition.

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Footnotes
1

A Demand Signal Repository aggregates point-of-sales data, which after cleansing and integrating with internal and market research data can help companies to identify whats selling, where, when and how. According to Forrester, the number of U.S. consumers shopping online will reach 192 million by 2016, a 15% increase from 167 million in 2012. It also forecasts that e-retail share of total retail sales will touch 9% by 2016 up from 7% in 2012. E-retail spending to increase 62% by 2016. Internet Retailer, February, 2012. http://www.internetretailer.com/2012/02/27/e-retail-spending-increase-45-2016

Merchandising Trends: Supporting the Value Proposition. IRI Group, 2013. http://www.foodinstitute. com/iri/T&TJan2013.pdf The list comprises the top companies based on revenues for FY 2012 from each of the sub-categories of the consumer goods industry in the U.S.

CPG 2011 Year in Review: The Search for Footing in an Evolving Marketplace. IRI Group, 2012. http://www.foodinstitute.com/iri/T&TFeb2012.pdf A report published in 2013 by Economist Intelligence Unit and Mintel says that total spending in the five emerging markets (China, India, Mexico, South Africa and Turkey) is expected to rise by between 7.7% and 15.2% a year, on average, in 2013-16, while the spending growth in the U.S. and UK will average 4.5% and3.6% a year, respectively. http://www.asia.udp.cl/Informes/2013/EIU_Mintel_ Consumer_report_Jan2013.pdf

2012 Financial Performance Report Profitable Growth: Driving the Demand Chain. Grocery Manufacturers Association and PricewaterhouseCoopers, 2012. http://www.gmaonline.org/file-manager/ Collaborating_with_Retailers/Financial_Performance_2012.pdf OECD Economic Outlook, Vol. 2011/2. OECD Publishing, 2011. http://dx.doi.org/10.1787/eco_ outlook-v2011-2-en

Sustainable Energy for All: Opportunities for the Consumer Packaged Goods Industry. United Nations Global Impact and Accenture, 2012. http://www.unglobalcompact.org/docs/issues_doc/Environment/ SEFA/4SEFA_CG.pdf Consumer 2020: Reading the Signs. Deloitte, 2011. http://www.deloitte.com/assets/Dcom-Global/ Local Assets/Documents/Consumer Business/8664A_Consumer2020_sg8.pdf

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2012 CPG Year in Review: Finding the New Normal. IRI Group, February, 2013. http://www.foodinstitute.com/iri/T&TFeb2013.pdf U.S. Grocery Shopper Trends 2012. Food Marketing Institute, 2012. http://www.icn-net.com/ docs/12086_FMIN_Trends2012_v5.pdf

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MarketPulse: Key Trends Tracking the Pulse of CPG., Information Resources Inc., May, 2013. http://www.iriworldwide.com/Portals/0/articlepdfs/MarketPulseKeyTrendsQ12011thruQ12013.pdf CPG Marketers Distributed 305 Billion Coupons in 12, Flat From 11. Marketing Charts, January, 2013. http://www.marketingcharts.com/wp/direct/cpg-marketers-distributed-305-billion-coupons-in-12-flatfrom-11-26532/

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Putting Social Media to Work. Bain & Company, September, 2011. http://www.bain.com/publications/ articles/putting-social-media-to-work.aspx The Decade Ahead: Trends that will shape the consumer goods industry. McKinsey & Company, February, 2011. http://csi.mckinsey.com/Knowledge_by_topic/Consumer_and_shopper_insights/decadeahead.aspx

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Why Axe Bet on Consumers for Global Twist Launch. Advertising Age, February, 2010. http://adage. com/article/news/axe-fans-evince-unexpected-subtlety-twist-launch/142270/ Social Media Are Giving a Voice to Taste Buds. The New York Times, July, 2012. http://www.nytimes. com/2012/07/31/technology/facebook-twitter-and-foursquare-as-corporate-focus-groups.html

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Right Analytics Can Help Retailers Improve Sales. CXO Today, May, 2013. http://www.cxotoday.com/ story/retailers-can-gain-by-doing-analytics-right/ Rethinking the role of IT for consumer packaged goods (CPG) companies. Deloitte, 2012. http://www. deloitte.com/assets/Dcom-Vietnam/Local%20Assets/Documents/Industries/Consumer%20Business/Rethinking%20the%20role%20of%20IT%20for%20CPG%20companies.pdf

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John Budd, Claudio Knizek, and Robert Tevelson, The Demand-Driven Supply Chain: Making It Work and Delivering Results. BCG Perspectives, May, 2012. https://www.bcgperspectives. com/content/articles/supply_chain_management_sourcing_procurement_demand_driven_supply_ chain/
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Mobility in Consumer Products. IDC, July, 2012. http://www.scmr.com/images/site/IDC_Mobility_ White_Paper.pdf

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IDCs Top 10 Manufacturing Predictions for 2012. Consumer Goods Technology, December, 2011. http://consumergoods.edgl.com/trends/IDC-s-Top-10-Manufacturing-Predictions-for-201277542 By Malcolm Frank, Dont Get SMACked: How Social, Mobile, Analytics and Cloud Technologies are Reshaping the Enterprise. Cognizant Technology Solutions. November, 2012. http://www.cognizant. com/Futureofwork/Documents/dont-get-smacked.pdf Big Data in Consumer Goods. Consumer Goods Technology and EKN Research, 2012. http://consumergoods.edgl.com/research/Big-Data-in-Consumer-Goods---Fall-201283905

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References

Optimizing Marketing Partner Performance and Value in a Digital World. CMO Council, 2012. http:// www.cmocouncil.org/images/uploads/pdf/219.pdf Tech Trends 2012. Consumer Goods Technology, 2012. http://consumergoods.edgl.com/research/ 2012-Tech-Trends-Report82531 Global power of Consumer Products 2012: Connecting the dots. Deloitte, 2012. http://www.deloitte. com/assets/Dcom-Switzerland/Local Assets/Documents/EN/Consumer Business/Consumer packaged goods/ch_en_global_powers_of_consumer_products_2012.pdf How Consumer Companies Can Win Back the U.S. Market. Boston Consulting Group, December, 2012. https://www.bcgperspectives.com/content/articles/consumer_products_go_to_market_strategy_how_consumer_companies_can_win_back_the_us_market/ Digitals Disruption of Consumer Goods and Retail. Boston Consulting Group. November, 2012. https://www.bcgperspectives.com/content/articles/retail_consumer_products_digitals_disruption/ Up Social Media. strategy+business, August, 2012. http://www.strategy-business.com/ article/00130?gko=51a51

Scaling

Mobility in Consumer Products. IDC Manufacturing Insights, July, 2012. http://www.scmr.com/ images/site/IDC_Mobility_White_Paper.pdf

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CPG Lags in Social Media Investments. Consumer Goods Technology, July, 2012. http://consumergoods.edgl.com/trends/CPG-Lags-in-Social-Media-Investments-81270 U.S. Consumer Goods: The Case for Putting Analytics at the Core. Cognizant Technology Solutions. February, 2012. http://www.cognizant.com/InsightsWhitepapers/US-Consumer-Goods-The-Case-forPutting-Analytics-at-the-Core.pdf The Emergence of The Digital Marketing Service Provider. Forrester Research, Inc., January, 2012. http://www.forrester.com/The+Emergence+Of+The+Digital+Marketing+Service+Provider/fulltext//E-RES61168 IDCs Top 10 Manufacturing Predictions for 2012. Consumer Goods Technology, December, 2011. http://consumergoods.edgl.com/trends/IDC-s-Top-10-Manufacturing-Predictions-for-201277542

Credits Author
Aala Santhosh Reddy, Senior Research Associate, Cognizant Research Center

Subject Matter Experts

Johan Sauer, Assistant Vice-President, Cognizant Business Consulting, Consumer Goods Practice

Design
Harleen Bhatia, Design Team Lead Chiranjeevi Manthri, Designer

About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the worlds leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50 delivery centers worldwide and approximately 162,700 employees as of March 31, 2013, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500, and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com for more information.

World Headquarters
500 Frank W. Burr Blvd. Teaneck, NJ 07666 USA Phone: +1 201 801 0233 Fax: +1 201 801 0243 Toll Free: +1 888 937 3277 Email: inquiry@cognizant.com

European Headquarters
1 Kingdom Street Paddington Central London W2 6BD Phone: +44 (0) 207 297 7600 Fax: +44 (0) 207 121 0102 Email: infouk@cognizant.com

India Operations Headquarters

#5/535, Old Mahabalipuram Road Okkiyam Pettai, Thoraipakkam Chennai, 600 096 India Phone: +91 (0) 44 4209 6000 Fax: +91 (0) 44 4209 6060 Email: inquiryindia@cognizant.com

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