After battling an eight-year global recession, the message coming from the consumer industry is that it is now time to focus on driving revenue growth. While expansion or top line growth is consistently a top three concern for consumer executives, it is now the number one priority.
According to the KPMG survey, 42% of global executives consider expansion and growth to be their number one priority. In Canada, the numbers are even stronger, with 58% indicating it is their main area of focus. While more than half of all respondents globally reported moderate growth of 3% to 10% in 2014, 92% reported the same level of growth in Canada. Executives recognize that top line growth is a challenge in a slower environment, but agree that sales growth is the key lever to improving their business profitability and it remains an area for increased investment.
Beyond growth, only winning consumer trust and an omni – channel customer focus (letting customers shop on their own terms) rate as top priorities. This suggests that the industry sees customer engagement as the pathway to growth.
The survey results provide insight into six levers that will exert the most influence on a company’s ability to grow revenue.
1. Consumer trust – Creating consumer trust emerged as the top priority following growth (13%; Canada 17%). A majority of Canadian respondents cite it as the top area for increased investment over the next one to two years.
2. Omni-channel – This is one of the top issues (12%; Canada 17%), particularly for retailers. To achieve growth, companies will need to provide a seamless experience for consumers and allow for the integration of emerging technologies such as smart watches or new payment methods.
3. Data security – Interestingly, data security was not identified as a top challenge for companies, nor a target for increased investment; with over half of respondents believing their companies have “sufficient skills and technology to manage cyber security.” The relatively low rating for data privacy and security as an area of importance and a threat exposes a potential blind spot for companies.
4. Corporate responsibility – Many companies realize that successful corporate responsibility efforts can be an enabler of growth, by helping to build consumer trust. There is a growing awareness by companies that sustainable practices are both good for the community, and for the bottom line.
5. Consumer knowledge – The possibilities of data analytics have not yet been fully absorbed and integrated by most companies and traditional market research has not yet caught up with sampling in an age of digital devices, or with findings of behavioural economics. Overall, it appears that most consumer companies have a way to go in terms of truly understanding their customers.
6. Supply chain – Many respondents named it as an area for increased investment and one in three plan to transform their supply chain and operations. This signals that businesses understand that if revenue growth occurs, the supply chain will be a key enabler and must remain efficient to allow the bottom line to grow with the top line.