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•	 Cognizant Reports




U.S. Consumer Goods: The Case for
Putting Analytics at the Core
   Executive Summary                                   Meanwhile, the recession introduced impor-
   In the ever-evolving digital era, companies are     tant changes in consumer behavior. Consumers
   inundated by unprecedented amounts of data          are now more careful about selecting products
   — generated internally, as well as externally.      that deliver maximum value for the money, and
   Importantly, organizations have come to realize     green goods are gaining in popularity across age
   that this data holds the key to solving many        groups, with the millennial generation2 leading
   problems inside their four walls, and beyond.       the way. Consumers have begun relying on their
   This understanding, coupled with advancements       smartphones and mobile access to the Web and
   in analytics technology, is pushing companies       social networks to help them research product
   to derive insights from raw data and boost          attributes and prices. Social media’s growing
   decision-making across their organizations          influence on consumer buying behavior is forcing
   in ways that drive business performance and         companies to venture into the terrain of integrat-
   competitive advantage. As the U.S. economy          ing social and traditional channels. Companies
   struggles out of the recession, consumer goods      are also realizing they need to innovate to remain
   (CG) industry players are under increasing          competitive.
   pressure to extract further efficiencies.
   Factors such as rising input costs have             The rise in social and mobile technologies has
   significantly affected margins, and for a variety   also caused an explosion of data, which if prop-
   of reasons, CG companies have not raised prices     erly leveraged can help CG companies understand
   to fully compensate for these increased costs.1     consumer behavior and drive innovation, as well
                                                       as guide companies to begin strategically thinking
   The recession was officially declared over in       about extracting much-needed efficiencies from
   June 2009 by the National Bureau of Economic        operations and alleviating margin pressures. For
   Research, but this pronouncement was not            starters, companies need to build an infrastruc-
   accompanied by improved market conditions           ture for collecting and analyzing the huge data
   for CG players. Despite consumption exceeding       volumes generated by social and mobile sources
   pre-recession levels during 2011, high unemploy-    and creating a single version of the truth across
   ment and repeated aftershocks have conspired        various departments that spans structured and
   to create anxiety over the future.                  unstructured formats.




   cognizant reports | february 2012
Going forward, we believe CG players will benefit by                                      The value of shipments has increased over the
putting analytics at the core of their endeavors to:                                      past year (see Figure 2, next page), but long-term
                                                                                          profitability remains a concern.
•	                            Engage with customers at the right place and
                              time to enhance brand awareness.                            Confronted with this scenario, CG manufacturers
•	                            Identify niches that can be targeted with                   have taken to emerging markets in their search
                              specific products.                                          for growth and are focusing on creating efficien-
•	                            Innovate to meet evolving consumer needs.                   cies to combat margin pressures.3 In domestic and
•	                            Use data to identify areas of inefficiencies                foreign markets alike, manufacturers are seeking
                              and improve performance.                                    insights into customer behavior to understand
•	                            Harness the power of cloud computing to                     their evolving needs. There is also a concerted
                              enhance internal analytics capabilities.                    effort to create efficiencies in the supply chain.
                                                                                          CG companies have caught onto the idea of big
                                                                                          data supply chains capturing insights from across
Economic Forces                                                                           the organization to reduce latency and optimize
Weak economic growth presents the biggest                                                 inventory.
challenge for CG manufacturers. Even as the
heavily medicated economy struggles to get back
on its feet, new shocks, such as renewed fears of                                         Customer Behavior Shifts
a double-dip recession, have spread a cloud of                                            One of the notable impacts of the U.S. financial
doubt over future growth.                                                                 crisis was the dramatic shift in consumer buying
                                                                                          behavior. The household savings rate has trended
Persistently high unemployment, combined                                                  up over the past few years and is expected
with wage gains that have remained below the                                              to reach 10%, according to some estimates.
inflation rate, have negatively impacted con-                                             The recession forced consumers to look
sumer spending. Growing commodity prices have                                             for more value and purchase lower priced
added to manufacturers’ woes (see Figure 1).                                              products. However, despite overall consumer
Importantly, industry players have found it                                               expenditure returning to pre-recession levels, the
increasingly difficult to pass on these price                                             demand for value has remained. Daily spending,
increases to consumers. According to McKinsey                                             as reported by consumers, remains below 2008
& Co., commodity prices increased by 40%                                                  levels (see Figure 3, page 4).
between 2002 and 2007, but manufacturers
passed on only 15% of this to consumers, result-                                          Adjusting to this change is of prime importance
ing in a 75% contraction in the sector’s margins.                                         to CG companies. Not surprisingly, responding



  Rising Commodity Prices
  CG manufacturers have not raised consumer prices to fully compensate for higher costs.
                              4.5
                              4.0
Percentage Growth in Prices




                              3.5
                              3.0
                              2.5
                              2.0
                              1.5
                              1.0
                              0.5
                              0.0
                                    Q4 2001   Q4 2002     Q4 2003   Q4 2004    Q4 2005   Q4 2006   Q4 2007   Q4 2008   Q4 2009   Q4 2010   Q1 2011

                                       Fuel oil, per gallon          Milk, per gallon
                                       Eggs, per dozen               Ground chuck, per pound

Source: “2011 Financial Performance Report,” Grocery Manufacturers Association and PricewaterhouseCoopers
  Figure 1




                                                                cognizant reports         2
to this situation ranks high on the agenda of                                               innovate their way out of this sticky situation
CG CEOs, including the need to develop products                                             (see Figure 4, next page).
that consistently deliver value at lower prices.
Such a situation is bound to put further pressure                                           The ever-increasing volumes of data, gener-
on margins.                                                                                 ated internally and from external sources, has
                                                                                            emerged as an important driver toward this goal.
Meanwhile, millennials are taking a whole new                                               More than ever, CG companies are looking at the
approach to the way they search, compare and                                                data generated on a daily basis in the supply
buy products. These young consumers use tech-                                               chain and at the retailer’s end to flesh out useful
nology to meet their need for buying the most                                               insights.
suitable products. They are tech-savvy, active on
social networks and likely to keep their options                                            CG companies have always strived to under-
open as far as brand loyalty is concerned. The                                              stand customer needs. As the digital shopping
mobile phone has played a catalytic role in the                                             era evolves, they are working even harder to
rise of this tech-savvy consumption behavior.                                               gain new insights into what customers want by
Growing adoption of smartphones, coupled with                                               engaging with them everywhere, such as at the
increased use of the Internet on these devices,                                             point-of-sale in the physical and virtual worlds.
has meant that information critical to shopping is                                          Working closely with retailers is essential
available on demand. No wonder holiday season                                               to achieving these insights, and it also helps
sales through mobile devices more than doubled                                              create efficiencies across several areas.
in 2011 over the previous year.4                                                            Adoption of downstream data reporting,
                                                                                            supported by technologies such as demand
For CG companies, this is a critical development.                                           signal repositories (DSRs), has increased over
Future growth will depend, to a great extent, on                                            the years as retailers have begun to realize the
how well they exploit the customer engagement                                               benefits of sharing data with suppliers. For
opportunities that accompany the rise of these                                              suppliers, the ability to better forecast demand
new channels.                                                                               means they can adapt their procurement
                                                                                            strategies accordingly.

Leveraging Data                                                                             Mobile devices such as tablets are gaining
The problem of creating efficiencies in a                                                   traction within CG companies, many of whom
troubled economy while meeting evolving                                                     believe mobility boosts productivity across
consumer demands has no single solution.                                                    the spectrum of their operations. Access to
CG companies are realizing they will have to                                                consolidated data on the move saves time and



Monthly Value of Shipments in CG Industry
Shipment values are steadily increasing for CG manufacturers.
                      130

                      125

                      120
Millions of dollars




                      115

                      110

                      105

                      100
                                                                          Mar-09
                                     Mar-08




                                                                                                         Dec-09
                                                                                                Sep-09
                                                                 Dec-08
                                                       Sep-08




                                                                                   Jun-09
                            Dec-07




                                              Jun-08




                                                                                                                  Mar-10




                                                                                                                                             Dec-10
                                                                                                                                    Sep-10
                                                                                                                           Jun-10




                                                                                                                                                      Mar-11




Source: “2011 Financial Performance Report,” Grocery Manufacturers Association, PwC
Figure 2




                                                            cognizant reports               3
U.S. Consumer Spending
   Self-reported daily spending is rising but not to pre-recession levels.
                  $120
                                     $114
                   $110



                   $90
Monthly average




                                                           $89
                               $81                                                                                                                                      $76
                                                                                                                $72              $75                $74
                   $70                                                                       $72
                                                                                                                                                          $65
                                                                                                    $59                 $59        $58
                                                                  $59
                   $50



                   $30
                          Jan-2008                               Jan-2009                          Jan-2010                        Jan-2011                    Jan-2012

                           Monthly average

  Based on Gallup Daily tracking of the amount Americans say they spent the day before at stores, restaurants, gas stations and
  online, excluding the purchase of cars and homes, and payments on normal household bills.
  Source: Gallup
    Figure 3




enables faster decision-making on the manufac-                                                      Where Improved Analytics Can Help
turing floor and in the field. A booming market                                                     There is data, and then there is data that improves
for applications that boost productivity is also                                                    decision-making. The latter results from filtering
playing its part.                                                                                   key bits of information to derive insights, using
                                                                                                    advanced analytics. This is what CG manufac-
Companies that have taken a lead in this area                                                       turers are striving to achieve. Analytics is by no
are planning for the long term and are putting                                                      means new to the industry, but the breadth of
in place the necessary infrastructure, which                                                        its application is widening, driven mainly by the
includes the ability to capture a single version of                                                 increased availability of data on everything from
the truth, analyze it and share insights across the                                                 supply chains, to customers (see Figure 5, next
organization.                                                                                       page). Companies are improving supply chains,




  Innovation High on the CEO Agenda
  Q: To what extent do you agree or disagree with the following statements regarding your company’s
     innovation over the next three years?

                  Agree Strongly            33             25       20       6                                                Our innovation will lead to significant
                                                                                                                              new revenue opportunities.
                                                                                                                              Our innovation will lead to operational
                            Agree                                                                                             efficiencies that provide us with a
                                                 52                      46                  50                 33            competitive advantage.
                                                                                                                              An important part of our innovation
                                                                                                                              strategy is to develop products or services
                          Disagree 3 7 11         22                                                                          that are environmentally-friendly.
                                                                                                                              We expect the majority of our innovations
                                                                                                                              to be co-developed with partners outside
                                                                                                                              our organization.
     Disagree Strongly 353                   18

                                     0      20        40     60         80       100   120     140        160     180     200

  Respondent base: 1,201 chief executives in 69 countries (153 CG companies)
  Note: ‘Neither agree nor disagree’ and ‘Don’t know/refused’ excluded.
 Source: “14th Annual Global CEO Survey 2011," PwC
  Figure 4




                                                                  cognizant reports                 4
Drivers for Increased Use of Analytics Tools
 Area                     Drivers               Implications                       Analytics Opportunities
                          Weak economic         The need for increased             Employ data analytics to
                          growth                efficiencies.                      extract efficiencies from
                                                                                   operations and enhance
                          Unemployment          High unemployment levels,          decision-making by
 Economic and
                                                leading to decreased spending.     predicting future scenarios.
 demographic
 factors
                          Stagnant population   Changing behavior and needs        Create products to suit this
                          growth; aging         of baby boomer generation.         age group.
                          population
 Input cost inflation     Rising energy costs   Adverse impact on margins;         Employ analytics in areas
                          and commodity         increased focus on cost-cutting.   such as supply chain and
                          prices                                                   inventory management to
                                                                                   identify performance
                                                                                   enhancement opportunities.
 Shifting consumer        An evolving           Increasingly frugal consumers      Generate insights through
 preferences              customer              who “want more for less“           consumer behavior analytics
                                                and the need for companies         to track behavior patterns and
                                                to innovate to meet evolving       understand consumer needs.
                                                needs.
 Technology               Data sharing in       The need for manufacturers         Generate better analytic results
                          the supply chain      to consolidate data across the     through technologies such as
                                                organization and fully utilize     master data management.
                                                the data generated from the
                                                supply chain.
 Marketing                Proliferation of      Increased popularity of            Discover important information
                          new media             channels such as the mobile        about consumer preferences
                                                Web and social media with          that can aid product promotion
                                                consumers, leading companies       and customer feedback, using
                                                to rethink their promotional       tools such as social media
                                                strategies.                        analytics.
 Sustainability           A key area of focus   The move toward                    Deploy analytics tools to
                          for the future        environmentally                    support product innovation.
                                                friendly products.

Source: Cognizant Research Center
Figure 5



customer loyalty and sustainability programs by             carefully crafted to get people talking about
analyzing large pools of data to derive patterns,           upcoming products.
identify trends and gain insights to drive strategic
decisions across the organization.                          The rules of customer engagement have changed
                                                            with the rise of digital media. Today’s multichan-
Playing to the New Rules of Customer                        nel customer spends a good deal of time on the
Engagement                                                  Internet, and not just using a wired connection.
An increasingly complex business environment                The mobile Internet, accessed via tablet devices
has rendered many of the industry’s historical              and smartphones, has increased significantly
practices obsolete. Take advertising, for example.          just in the last two years. Shoppers accessing
An ad campaign on television, newspapers and                the Internet through wireless means increased
outdoor billboards was once considered to be                51% in 2010, according to a survey by the Pew
enough to generate customer interest. Today,                Research Center. These customers are looking for
however, new channels to reach customers                    value, and they know their options are not limited
need to be integrated into the overall marketing            to one or two stores, either physical or online.
and promotional strategic mix. For instance,
a television ad campaign could be preceded by               Multichannel communication is, therefore,
a social media campaign on Facebook that is                 the new normal for spreading brand messages.


                                     cognizant reports      5
This calls not only for an integrated media                                   feedback from social media users and created
strategy but also one that strives to create a                                personalized videos in response. These videos
consistent experience for consumers as they                                   were such a big hit with viewers that as many as
navigate these channels. Not surprisingly,                                    187 of them were made. By the time the campaign
companies are realigning their promotional                                    was finished, it had surpassed 16 million views,
strategies accordingly, as they work to reach                                 exceeding President Barack Obama’s election
customers along the path to purchase — from                                   victory speech.5 The media research agency
online searches, to in-store ads, coupons and                                 Nielsen reported in July 2010 that Old Spice
apps. Also known as shopper marketing, this area                              body wash sales rose 55% for the previous
is expected to witness increased spending by                                  three months and a whopping 107% over the
CG companies (see Figure 6).                                                  previous month.

Perhaps the biggest game changer is social                                    With increasingly complex and fragmented
media. Companies have struggled to master                                     media, companies need to make effective,
this medium, with more and more jumping on                                    fact-based decisions, and this is where the digital
the social bandwagon, starting from a simple                                  age opportunity lies. There is no dearth of data —
Facebook fan page and growing to a full-blown                                 companies generate huge amounts of customer
social media strategy. Analytics tools are key to                             data on a daily basis that go beyond purchase
the success of these efforts. Customers use social                            transactions, into areas such as perceptions
media to express their thoughts about products                                of products and services. The trick is to distill
and services they have used, and sentiment                                    key insights from this data using advanced ana-
analysis tools allow companies to analyze this                                lytics. Today’s analytics tools allow companies
data to know what customers are thinking about                                to track everything from channel performance
their products. Similarly, these tools can be used                            to customer behavior. Product performance can
to measure the response to a new product or                                   be tracked dynamically, to identify potentially
service the company is planning to launch.                                    successful brands that can be promoted through
                                                                              advertisements and deals.
Some companies have used this media very
intelligently. An example is the campaign for                                 Product Innovation
the new body wash from Old Spice, a brand                                     At a time when customer preferences are
owned by Procter & Gamble, that combined                                      radically changing, the need for innovation is
Facebook, Twitter and YouTube. Starting off                                   hyper-critical. Even as tough economic conditions
with simple advertisements starring the former                                push customers to seek value in all purchases,
NFL player Isaiah Mustafa, the campaign sought                                concerns over the environmental and health



Expected Growth in Advertising and Promotions Mix
CG companies will increasingly turn to “shopper marketing” to gain visibility along the purchase path.


    Shopper Marketing                                                             55                       28


           Digital Media                              -3                36                        40


 Consumer Promotions                        -3      -10    3           28                        Average annual increase or decrease
                                                                                                 over the next three years:
                                                                                                   Increase >5%
     Traditional Media          -13           -18              9       16
                                                                                                   Increase 0-5%
                                                                                                   Decrease 0-5%
     Trade Promotions      -7               -24                10                                  Decrease >5

                   -40                -20                 0              20             40          60             80           100
                                                               Percent of respondents
Source: “Shopper Marketing 4.0: Building Scalable Playbooks That Drive Results," Grocery Manufacturers Association and
Booz & Co., 2010.
Figure 6




                                            cognizant reports                 6
impacts of products are emerging; meanwhile,                       For example, analyzing the purchasing behavior
CG companies are sourcing products globally                        of customers according to age, income levels
(which adds complexity to product safety require-                  and preferences can help companies identify
ments) and are struggling to meet green and sus-                   how trends are evolving. This will provide clarity
tainability mandates (whether internally driven                    around which products and pricing models would
or enforced through regulations). According to                     result in a winning strategy.
a survey by NBCUniversal,6 68% of respondents
said it was worth paying more for green goods.                     Creating Efficiencies
                                                                   At a time when margins are under pressure, com-
The food and beverages sector, for instance,                       panies are bound to look inward for opportunities
is dealing with rising health consciousness                        to cut costs. CG companies are identifying areas
and increased need for convenience foods.                          where processes can be improved. The plethora
Carbonated drinks sales have declined steadily                     of internal data about many business processes
over the past few years as consumers move                          holds the key to creating efficiencies. These
toward non-carbonated health drinks, which                         insights can be drawn by applying analytics tools
grew at 7% in 2010.7 Consumers also want pre-                      to the data collected from various departments to
packaged foods that offer greater nutrition and                    identify anomalies in internal operations that can
higher quality. With population growth in the                      then be rectified.
developed world expected to remain slow, manu-
facturers will have to differentiate in order to stay              Today’s globally aligned business models
ahead, and product innovation will be key to this.                 introduce complexities that need to be dealt with
                                                                   on a dynamic basis. Companies that have not
Understanding the different segments of custom-                    updated their business models risk losing ground
ers will be useful for companies. For example,                     rapidly. Traditional supply chain architectures,
the aging baby boomer generation’s preferences                     for example, need a complete overhaul. Much of
have changed. Companies can identify these                         the inefficiencies stem from the fact that data
changes and create products accordingly. Such                      remains stored in silos, and spreadsheets are
efforts could mean getting closely involved with                   pervasive. Overhauling data architectures
customers or partners to drive innovation. Data                    across the organization will enable operational
analytics will be important to drive decisions in                  efficiencies to be derived.
this scenario. Analytics tools can also help predict
the performance of products based on past data                     Improved Sustainability Initiatives
combined with “what if“ scenarios, thus helping                    Sustainability has moved to the top of the
companies choose the best possible alternatives.                   corporate agenda across industries over



Drivers for Sustainability Initiatives
CG companies name branding as a top reason for pursuing sustainability programs.
                  Brand
                  Costs
             Regulation
             Customers
                    Risk
           Competition
 Product differentiation
            Profitability
Shareholders/Investors
             Employees
                  Other
                                                                                                     All     Consumer markets
            Don't know
                            0%          10%             20%                30%            40%               50%          60%
                                                              Percentage of respondents
Response base: 378 senior executives from North America, Asia Pacific, Europe, Middle East, Africa, Latin America
Source: "Corporate Sustainability: A Progress Report," KPMG, March 2011.
Figure 7




                                       cognizant reports           7
the past few years, and consumer goods                            CG companies will need systems that enable
companies are no different.8 Regulations and                      accurate and near-real-time reporting of this
customer awareness have played a vital part in                    data, as well as analytics tools that can turn
this. However, the top driver across industries                   raw data into insights to continuously improve
is the desire to promote brand awareness (see                     progress made against sustainability goals
Figure 7, previous page). Companies are look-                     through better decision-making.
ing to cut resource usage wherever possible. For
example, several CG manufacturers have reduced
their consumption of water in manufacturing.                      Data Management and Other
As this trend evolves, sustainability reporting is                Challenges
growing in importance to stakeholders; in fact,                   Data management is central to any successful
in a KPMG survey, the number of companies                         analytics implementation. Employing real-time
producing such reports increased from just                        analytics involves collecting the right data — that
6% in 2000 to 36% in 2010, with an additional                     is, data that is relevant in a given context. Data
22% planning to produce reports in two years.9                    management across the CG value chain, however,
                                                                  remains plagued by age-old architectures, siloed
Sustainability initiatives are also seen as a source              storage and manual intervention. Old approaches
for innovation and efficiencies. Companies that                   like the use of spreadsheets to hold business-
have taken the lead here assign high importance                   critical data hinder data sharing between depart-
to sustainability reporting based on what they                    ments; instead, a single version of the truth needs
want to improve within their internal processes.                  to be created to inform decision-making.
Yet, the quality and quantity of sustainability data
reported varies highly across consumer market                     Similar efforts are being made to collaborate with
sectors.                                                          retailers on using downstream data, although
                                                                  there is no enterprise-wide approach to collect,
For sustainability initiatives to deliver value, it is            share and analyze this data (see Figure 8). As
important that proper metrics are instituted to                   a result, different departments pursue their own
measure and analyze the results. In this regard,                  connections with retailers to generate data.
adhering to industry benchmarks and reporting                     There even seems to be little consensus between
standards will be helpful, although such standards                departments over the responsibility for a
are largely a work in progress. As metrics emerge,                downstream data initiative, as a 2010 study by



The State of Data Management

Q: How standardized is the approach you are taking to downstream data management?

   Looking at a corporate strategy,
                                                                                                       34%
   but do not have one in place yet



 No corporate-level strategy; each
    customer team decides on the                                                              29%
              approach they take


    Made a decision on a corporate
            strategy and currently                                                  22%
      implementing it across team



   The same tool is in place across
                                                                      15%
                   all teams today


                                  0%         5%         10%       15%         20%     25%     30%      35%      40%

Response base: More than 100 midsize CG suppliers and retailers
Source: “Retailer/Supplier Shared Data Study 2010," CGT and RIS News, 2010.
Figure 8




                                       cognizant reports          8
CGT/RIS10 found. While 82% of respondents                analytics competency have a better chance of
believed it was a sales initiative, 77% said it          success.
was a supply chain initiative. This dichotomy
could result in data inconsistencies between             Access to an analytics talent pool and a
departments, which in turn will negatively               cost-effective delivery model is an equally
impact decisions made down the road.                     important requirement, and consumer goods
                                                         companies should consider associating with
Overcoming this hurdle is, therefore, crucial for        partners that can provide these capabilities.
companies, and the decisions that drive the move         Advances in cloud computing have created
toward a single version of the truth must be             opportunities to reduce hardware, software
made by organizational leadership. Departmental          and talent-related costs through business
buy-in needs to be generated to share crucial            process as a service12 (BPaaS). BPaaS helps save
data. This will most certainly involve a dramatic        critical Cap-Ex by leveraging cloud computing,
cultural shift, which makes the role of leaders          with its consumption-based fee structure and
even more important.                                     hosted computing model. It is our view that
                                                         companies that benefit from this scenario will
                                                         do the following:
Analytics as a Service
Creating a culture of decision-making based              •	 Create a data management infrastructure that
on insights drawn from data shared across the               integrates existing data silos.
organization will not be an easy task. But given         •	 Develop a single version of the truth to drive
the ever-growing complexity of the business                 improved organization-wide decision-making.
environment, this transformation to a data-              •	 Design a strategy to harness the potential of
driven culture is essential, and the benefits               big data to drive efficiencies and innovation.
will be worth the effort. Companies that see             •	 Partner with vendors that can help cut
themselves as highly competitive tend to have               Cap-Ex by providing a complete solution that
a higher analytics orientation than their peers.11          encompasses analytics technology and talent
Organizations that empower themselves with an               aspects.




Footnotes
	 Richard Benson-Armer, Peter Czerepak, Tim Koller, “The Commodity Crunch in Consumer Packaged
1

  Goods,“ McKinsey Quarterly, December 2010, https://www.mckinseyquarterly.com/The_commodity_
  crunch_in_consumer_packaged_goods_2719.
2
    	 The Pew Research Center defines millennials as the generation that was born after 1980 — the first
      generation to come of age in the new millennium.
3
    	 “Growth Reimagined: Prospects in Emerging Markets Drive CEO Confidence,“ Pricewaterhouse
      Coopers, 2011, http://www.pwc.com/gx/en/ceo-survey/pdf/14th-annual-global-ceo-survey.pdf.
4
    	 “Mobile Shopping Doubles over December 2011 Holiday,“ IBM, January 2012, http://www-03.ibm.com/
      press/us/en/pressrelease/36472.wss.
5
    	 Samuel Axon, “Old Spice Sales Double With YouTube Campaign,“ Mashable.com, July 27, 2010,
      http://mashable.com/2010/07/27/old-spice-sales.
6
    	 “Green in the Economy II,“ NBC Universal, 2011.
7
    	 Alan Rappeport, “Emerging Markets Boost Pepsi Sales,“ Financial Times, April 28, 2011.
8
    	 “Beyond Green: The Triple Play of Sustainability,“ Cognizant Technology Solutions, March 2011.
9
    	 “Measuring Up: Improving Sustainability in Consumer Markets,“ KPMG, June 2011.




                                   cognizant reports     9
10
     	“Retailer/Supplier Shared Data Study 2010,“ Consumer Goods Technology/Retail Information Systems
      News, September 2010.

 	 “Advanced Business Analytics Enable Better Decisions in Banking,“ IDC, November 2010.
11


12
     	BPaaS refers to the provision of business services encompassing underlying IT infrastructure,
      platform and skilled manpower, to run specific business processes in a virtual, globalized and
      distributed operating model.




References
Shobhana Chandra, “Consumer Spending in U.S. Unexpectedly Falls for First Time in Two Years,“
Bloomberg, Aug. 2, 2011, http://www.bloomberg.com/news/2011-08-02/consumer-spending-in-u-s-
unexpectedly-falls-for-first-time-in-two-years.html.

Robert Higgs, “One More Time: Consumption Spending HAS Already Recovered,“ The Beacon, The
Independent Institute, Sept. 9, 2011, http://blog.independent.org/2011/09/09/one-more-time-
consumption-spending-has-already-recovered.

Aaron Smith, “Mobile Access 2010,“ Pew Research Center, July 7, 2010, http://www.pewinternet.org/
Reports/2010/Mobile-Access-2010.aspx.

Steffen Lauster, Elisabeth Hartley, Samrat Sharma, “Consumer Packaged Goods: Escaping the
Consolidation Mentality,“ strategy+business, June 6, 2011, http://www.strategy-business.com/
article/00081?gko=8b1c2.

Ken Eudy, “Consumer Interest in Sustainability Remains Consistent Through Downturn,“ Capstrat,
Nov. 19, 2010, http://www.capstrat.com/news/consumer-interest-sustainability-remains-consistent-
through-downturn.

Lydia Saad, “Americans' Spending Rises Modestly in December,“ Gallup Economy, Jan. 6, 2012,
http://www.gallup.com/poll/151904/Americans-Spending-Rises-Modestly-December.aspx.




Credits

Author and Analyst
Akhil Tandulwadikar, Senior Research Associate, Cognizant Research Center



Design
Harleen Bhatia, Design Team Lead

Suresh Sambandhan, Designer




                                 cognizant reports     10
About Cognizant

Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process
outsourcing services, dedicated to helping the world’s 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 137,700 employees as of December 31, 2011, 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                   European Headquarters                India Operations Headquarters
                                        500 Frank W. Burr Blvd.              1 Kingdom Street                     #5/535, Old Mahabalipuram Road
                                        Teaneck, NJ 07666 USA                Paddington Central                   Okkiyam Pettai, Thoraipakkam
                                        Phone: +1 201 801 0233               London W2 6BD                        Chennai, 600 096 India
                                        Fax: +1 201 801 0243                 Phone: +44 (0) 207 297 7600          Phone: +91 (0) 44 4209 6000
                                        Toll Free: +1 888 937 3277           Fax: +44 (0) 207 121 0102            Fax: +91 (0) 44 4209 6060
                                        Email: inquiry@cognizant.com         Email: infouk@cognizant.com          Email: inquiryindia@cognizant.com


©
­­ Copyright 2012, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is
subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.

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U.S. Consumer Goods: The Case for Putting Analytics at the Core

  • 1. • Cognizant Reports U.S. Consumer Goods: The Case for Putting Analytics at the Core Executive Summary Meanwhile, the recession introduced impor- In the ever-evolving digital era, companies are tant changes in consumer behavior. Consumers inundated by unprecedented amounts of data are now more careful about selecting products — generated internally, as well as externally. that deliver maximum value for the money, and Importantly, organizations have come to realize green goods are gaining in popularity across age that this data holds the key to solving many groups, with the millennial generation2 leading problems inside their four walls, and beyond. the way. Consumers have begun relying on their This understanding, coupled with advancements smartphones and mobile access to the Web and in analytics technology, is pushing companies social networks to help them research product to derive insights from raw data and boost attributes and prices. Social media’s growing decision-making across their organizations influence on consumer buying behavior is forcing in ways that drive business performance and companies to venture into the terrain of integrat- competitive advantage. As the U.S. economy ing social and traditional channels. Companies struggles out of the recession, consumer goods are also realizing they need to innovate to remain (CG) industry players are under increasing competitive. pressure to extract further efficiencies. Factors such as rising input costs have The rise in social and mobile technologies has significantly affected margins, and for a variety also caused an explosion of data, which if prop- of reasons, CG companies have not raised prices erly leveraged can help CG companies understand to fully compensate for these increased costs.1 consumer behavior and drive innovation, as well as guide companies to begin strategically thinking The recession was officially declared over in about extracting much-needed efficiencies from June 2009 by the National Bureau of Economic operations and alleviating margin pressures. For Research, but this pronouncement was not starters, companies need to build an infrastruc- accompanied by improved market conditions ture for collecting and analyzing the huge data for CG players. Despite consumption exceeding volumes generated by social and mobile sources pre-recession levels during 2011, high unemploy- and creating a single version of the truth across ment and repeated aftershocks have conspired various departments that spans structured and to create anxiety over the future. unstructured formats. cognizant reports | february 2012
  • 2. Going forward, we believe CG players will benefit by The value of shipments has increased over the putting analytics at the core of their endeavors to: past year (see Figure 2, next page), but long-term profitability remains a concern. • Engage with customers at the right place and time to enhance brand awareness. Confronted with this scenario, CG manufacturers • Identify niches that can be targeted with have taken to emerging markets in their search specific products. for growth and are focusing on creating efficien- • Innovate to meet evolving consumer needs. cies to combat margin pressures.3 In domestic and • Use data to identify areas of inefficiencies foreign markets alike, manufacturers are seeking and improve performance. insights into customer behavior to understand • Harness the power of cloud computing to their evolving needs. There is also a concerted enhance internal analytics capabilities. effort to create efficiencies in the supply chain. CG companies have caught onto the idea of big data supply chains capturing insights from across Economic Forces the organization to reduce latency and optimize Weak economic growth presents the biggest inventory. challenge for CG manufacturers. Even as the heavily medicated economy struggles to get back on its feet, new shocks, such as renewed fears of Customer Behavior Shifts a double-dip recession, have spread a cloud of One of the notable impacts of the U.S. financial doubt over future growth. crisis was the dramatic shift in consumer buying behavior. The household savings rate has trended Persistently high unemployment, combined up over the past few years and is expected with wage gains that have remained below the to reach 10%, according to some estimates. inflation rate, have negatively impacted con- The recession forced consumers to look sumer spending. Growing commodity prices have for more value and purchase lower priced added to manufacturers’ woes (see Figure 1). products. However, despite overall consumer Importantly, industry players have found it expenditure returning to pre-recession levels, the increasingly difficult to pass on these price demand for value has remained. Daily spending, increases to consumers. According to McKinsey as reported by consumers, remains below 2008 & Co., commodity prices increased by 40% levels (see Figure 3, page 4). between 2002 and 2007, but manufacturers passed on only 15% of this to consumers, result- Adjusting to this change is of prime importance ing in a 75% contraction in the sector’s margins. to CG companies. Not surprisingly, responding Rising Commodity Prices CG manufacturers have not raised consumer prices to fully compensate for higher costs. 4.5 4.0 Percentage Growth in Prices 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Q4 2001 Q4 2002 Q4 2003 Q4 2004 Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q1 2011 Fuel oil, per gallon Milk, per gallon Eggs, per dozen Ground chuck, per pound Source: “2011 Financial Performance Report,” Grocery Manufacturers Association and PricewaterhouseCoopers Figure 1 cognizant reports 2
  • 3. to this situation ranks high on the agenda of innovate their way out of this sticky situation CG CEOs, including the need to develop products (see Figure 4, next page). that consistently deliver value at lower prices. Such a situation is bound to put further pressure The ever-increasing volumes of data, gener- on margins. ated internally and from external sources, has emerged as an important driver toward this goal. Meanwhile, millennials are taking a whole new More than ever, CG companies are looking at the approach to the way they search, compare and data generated on a daily basis in the supply buy products. These young consumers use tech- chain and at the retailer’s end to flesh out useful nology to meet their need for buying the most insights. suitable products. They are tech-savvy, active on social networks and likely to keep their options CG companies have always strived to under- open as far as brand loyalty is concerned. The stand customer needs. As the digital shopping mobile phone has played a catalytic role in the era evolves, they are working even harder to rise of this tech-savvy consumption behavior. gain new insights into what customers want by Growing adoption of smartphones, coupled with engaging with them everywhere, such as at the increased use of the Internet on these devices, point-of-sale in the physical and virtual worlds. has meant that information critical to shopping is Working closely with retailers is essential available on demand. No wonder holiday season to achieving these insights, and it also helps sales through mobile devices more than doubled create efficiencies across several areas. in 2011 over the previous year.4 Adoption of downstream data reporting, supported by technologies such as demand For CG companies, this is a critical development. signal repositories (DSRs), has increased over Future growth will depend, to a great extent, on the years as retailers have begun to realize the how well they exploit the customer engagement benefits of sharing data with suppliers. For opportunities that accompany the rise of these suppliers, the ability to better forecast demand new channels. means they can adapt their procurement strategies accordingly. Leveraging Data Mobile devices such as tablets are gaining The problem of creating efficiencies in a traction within CG companies, many of whom troubled economy while meeting evolving believe mobility boosts productivity across consumer demands has no single solution. the spectrum of their operations. Access to CG companies are realizing they will have to consolidated data on the move saves time and Monthly Value of Shipments in CG Industry Shipment values are steadily increasing for CG manufacturers. 130 125 120 Millions of dollars 115 110 105 100 Mar-09 Mar-08 Dec-09 Sep-09 Dec-08 Sep-08 Jun-09 Dec-07 Jun-08 Mar-10 Dec-10 Sep-10 Jun-10 Mar-11 Source: “2011 Financial Performance Report,” Grocery Manufacturers Association, PwC Figure 2 cognizant reports 3
  • 4. U.S. Consumer Spending Self-reported daily spending is rising but not to pre-recession levels. $120 $114 $110 $90 Monthly average $89 $81 $76 $72 $75 $74 $70 $72 $65 $59 $59 $58 $59 $50 $30 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012 Monthly average Based on Gallup Daily tracking of the amount Americans say they spent the day before at stores, restaurants, gas stations and online, excluding the purchase of cars and homes, and payments on normal household bills. Source: Gallup Figure 3 enables faster decision-making on the manufac- Where Improved Analytics Can Help turing floor and in the field. A booming market There is data, and then there is data that improves for applications that boost productivity is also decision-making. The latter results from filtering playing its part. key bits of information to derive insights, using advanced analytics. This is what CG manufac- Companies that have taken a lead in this area turers are striving to achieve. Analytics is by no are planning for the long term and are putting means new to the industry, but the breadth of in place the necessary infrastructure, which its application is widening, driven mainly by the includes the ability to capture a single version of increased availability of data on everything from the truth, analyze it and share insights across the supply chains, to customers (see Figure 5, next organization. page). Companies are improving supply chains, Innovation High on the CEO Agenda Q: To what extent do you agree or disagree with the following statements regarding your company’s innovation over the next three years? Agree Strongly 33 25 20 6 Our innovation will lead to significant new revenue opportunities. Our innovation will lead to operational Agree efficiencies that provide us with a 52 46 50 33 competitive advantage. An important part of our innovation strategy is to develop products or services Disagree 3 7 11 22 that are environmentally-friendly. We expect the majority of our innovations to be co-developed with partners outside our organization. Disagree Strongly 353 18 0 20 40 60 80 100 120 140 160 180 200 Respondent base: 1,201 chief executives in 69 countries (153 CG companies) Note: ‘Neither agree nor disagree’ and ‘Don’t know/refused’ excluded. Source: “14th Annual Global CEO Survey 2011," PwC Figure 4 cognizant reports 4
  • 5. Drivers for Increased Use of Analytics Tools Area Drivers Implications Analytics Opportunities Weak economic The need for increased Employ data analytics to growth efficiencies. extract efficiencies from operations and enhance Unemployment High unemployment levels, decision-making by Economic and leading to decreased spending. predicting future scenarios. demographic factors Stagnant population Changing behavior and needs Create products to suit this growth; aging of baby boomer generation. age group. population Input cost inflation Rising energy costs Adverse impact on margins; Employ analytics in areas and commodity increased focus on cost-cutting. such as supply chain and prices inventory management to identify performance enhancement opportunities. Shifting consumer An evolving Increasingly frugal consumers Generate insights through preferences customer who “want more for less“ consumer behavior analytics and the need for companies to track behavior patterns and to innovate to meet evolving understand consumer needs. needs. Technology Data sharing in The need for manufacturers Generate better analytic results the supply chain to consolidate data across the through technologies such as organization and fully utilize master data management. the data generated from the supply chain. Marketing Proliferation of Increased popularity of Discover important information new media channels such as the mobile about consumer preferences Web and social media with that can aid product promotion consumers, leading companies and customer feedback, using to rethink their promotional tools such as social media strategies. analytics. Sustainability A key area of focus The move toward Deploy analytics tools to for the future environmentally support product innovation. friendly products. Source: Cognizant Research Center Figure 5 customer loyalty and sustainability programs by carefully crafted to get people talking about analyzing large pools of data to derive patterns, upcoming products. identify trends and gain insights to drive strategic decisions across the organization. The rules of customer engagement have changed with the rise of digital media. Today’s multichan- Playing to the New Rules of Customer nel customer spends a good deal of time on the Engagement Internet, and not just using a wired connection. An increasingly complex business environment The mobile Internet, accessed via tablet devices has rendered many of the industry’s historical and smartphones, has increased significantly practices obsolete. Take advertising, for example. just in the last two years. Shoppers accessing An ad campaign on television, newspapers and the Internet through wireless means increased outdoor billboards was once considered to be 51% in 2010, according to a survey by the Pew enough to generate customer interest. Today, Research Center. These customers are looking for however, new channels to reach customers value, and they know their options are not limited need to be integrated into the overall marketing to one or two stores, either physical or online. and promotional strategic mix. For instance, a television ad campaign could be preceded by Multichannel communication is, therefore, a social media campaign on Facebook that is the new normal for spreading brand messages. cognizant reports 5
  • 6. This calls not only for an integrated media feedback from social media users and created strategy but also one that strives to create a personalized videos in response. These videos consistent experience for consumers as they were such a big hit with viewers that as many as navigate these channels. Not surprisingly, 187 of them were made. By the time the campaign companies are realigning their promotional was finished, it had surpassed 16 million views, strategies accordingly, as they work to reach exceeding President Barack Obama’s election customers along the path to purchase — from victory speech.5 The media research agency online searches, to in-store ads, coupons and Nielsen reported in July 2010 that Old Spice apps. Also known as shopper marketing, this area body wash sales rose 55% for the previous is expected to witness increased spending by three months and a whopping 107% over the CG companies (see Figure 6). previous month. Perhaps the biggest game changer is social With increasingly complex and fragmented media. Companies have struggled to master media, companies need to make effective, this medium, with more and more jumping on fact-based decisions, and this is where the digital the social bandwagon, starting from a simple age opportunity lies. There is no dearth of data — Facebook fan page and growing to a full-blown companies generate huge amounts of customer social media strategy. Analytics tools are key to data on a daily basis that go beyond purchase the success of these efforts. Customers use social transactions, into areas such as perceptions media to express their thoughts about products of products and services. The trick is to distill and services they have used, and sentiment key insights from this data using advanced ana- analysis tools allow companies to analyze this lytics. Today’s analytics tools allow companies data to know what customers are thinking about to track everything from channel performance their products. Similarly, these tools can be used to customer behavior. Product performance can to measure the response to a new product or be tracked dynamically, to identify potentially service the company is planning to launch. successful brands that can be promoted through advertisements and deals. Some companies have used this media very intelligently. An example is the campaign for Product Innovation the new body wash from Old Spice, a brand At a time when customer preferences are owned by Procter & Gamble, that combined radically changing, the need for innovation is Facebook, Twitter and YouTube. Starting off hyper-critical. Even as tough economic conditions with simple advertisements starring the former push customers to seek value in all purchases, NFL player Isaiah Mustafa, the campaign sought concerns over the environmental and health Expected Growth in Advertising and Promotions Mix CG companies will increasingly turn to “shopper marketing” to gain visibility along the purchase path. Shopper Marketing 55 28 Digital Media -3 36 40 Consumer Promotions -3 -10 3 28 Average annual increase or decrease over the next three years: Increase >5% Traditional Media -13 -18 9 16 Increase 0-5% Decrease 0-5% Trade Promotions -7 -24 10 Decrease >5 -40 -20 0 20 40 60 80 100 Percent of respondents Source: “Shopper Marketing 4.0: Building Scalable Playbooks That Drive Results," Grocery Manufacturers Association and Booz & Co., 2010. Figure 6 cognizant reports 6
  • 7. impacts of products are emerging; meanwhile, For example, analyzing the purchasing behavior CG companies are sourcing products globally of customers according to age, income levels (which adds complexity to product safety require- and preferences can help companies identify ments) and are struggling to meet green and sus- how trends are evolving. This will provide clarity tainability mandates (whether internally driven around which products and pricing models would or enforced through regulations). According to result in a winning strategy. a survey by NBCUniversal,6 68% of respondents said it was worth paying more for green goods. Creating Efficiencies At a time when margins are under pressure, com- The food and beverages sector, for instance, panies are bound to look inward for opportunities is dealing with rising health consciousness to cut costs. CG companies are identifying areas and increased need for convenience foods. where processes can be improved. The plethora Carbonated drinks sales have declined steadily of internal data about many business processes over the past few years as consumers move holds the key to creating efficiencies. These toward non-carbonated health drinks, which insights can be drawn by applying analytics tools grew at 7% in 2010.7 Consumers also want pre- to the data collected from various departments to packaged foods that offer greater nutrition and identify anomalies in internal operations that can higher quality. With population growth in the then be rectified. developed world expected to remain slow, manu- facturers will have to differentiate in order to stay Today’s globally aligned business models ahead, and product innovation will be key to this. introduce complexities that need to be dealt with on a dynamic basis. Companies that have not Understanding the different segments of custom- updated their business models risk losing ground ers will be useful for companies. For example, rapidly. Traditional supply chain architectures, the aging baby boomer generation’s preferences for example, need a complete overhaul. Much of have changed. Companies can identify these the inefficiencies stem from the fact that data changes and create products accordingly. Such remains stored in silos, and spreadsheets are efforts could mean getting closely involved with pervasive. Overhauling data architectures customers or partners to drive innovation. Data across the organization will enable operational analytics will be important to drive decisions in efficiencies to be derived. this scenario. Analytics tools can also help predict the performance of products based on past data Improved Sustainability Initiatives combined with “what if“ scenarios, thus helping Sustainability has moved to the top of the companies choose the best possible alternatives. corporate agenda across industries over Drivers for Sustainability Initiatives CG companies name branding as a top reason for pursuing sustainability programs. Brand Costs Regulation Customers Risk Competition Product differentiation Profitability Shareholders/Investors Employees Other All Consumer markets Don't know 0% 10% 20% 30% 40% 50% 60% Percentage of respondents Response base: 378 senior executives from North America, Asia Pacific, Europe, Middle East, Africa, Latin America Source: "Corporate Sustainability: A Progress Report," KPMG, March 2011. Figure 7 cognizant reports 7
  • 8. the past few years, and consumer goods CG companies will need systems that enable companies are no different.8 Regulations and accurate and near-real-time reporting of this customer awareness have played a vital part in data, as well as analytics tools that can turn this. However, the top driver across industries raw data into insights to continuously improve is the desire to promote brand awareness (see progress made against sustainability goals Figure 7, previous page). Companies are look- through better decision-making. ing to cut resource usage wherever possible. For example, several CG manufacturers have reduced their consumption of water in manufacturing. Data Management and Other As this trend evolves, sustainability reporting is Challenges growing in importance to stakeholders; in fact, Data management is central to any successful in a KPMG survey, the number of companies analytics implementation. Employing real-time producing such reports increased from just analytics involves collecting the right data — that 6% in 2000 to 36% in 2010, with an additional is, data that is relevant in a given context. Data 22% planning to produce reports in two years.9 management across the CG value chain, however, remains plagued by age-old architectures, siloed Sustainability initiatives are also seen as a source storage and manual intervention. Old approaches for innovation and efficiencies. Companies that like the use of spreadsheets to hold business- have taken the lead here assign high importance critical data hinder data sharing between depart- to sustainability reporting based on what they ments; instead, a single version of the truth needs want to improve within their internal processes. to be created to inform decision-making. Yet, the quality and quantity of sustainability data reported varies highly across consumer market Similar efforts are being made to collaborate with sectors. retailers on using downstream data, although there is no enterprise-wide approach to collect, For sustainability initiatives to deliver value, it is share and analyze this data (see Figure 8). As important that proper metrics are instituted to a result, different departments pursue their own measure and analyze the results. In this regard, connections with retailers to generate data. adhering to industry benchmarks and reporting There even seems to be little consensus between standards will be helpful, although such standards departments over the responsibility for a are largely a work in progress. As metrics emerge, downstream data initiative, as a 2010 study by The State of Data Management Q: How standardized is the approach you are taking to downstream data management? Looking at a corporate strategy, 34% but do not have one in place yet No corporate-level strategy; each customer team decides on the 29% approach they take Made a decision on a corporate strategy and currently 22% implementing it across team The same tool is in place across 15% all teams today 0% 5% 10% 15% 20% 25% 30% 35% 40% Response base: More than 100 midsize CG suppliers and retailers Source: “Retailer/Supplier Shared Data Study 2010," CGT and RIS News, 2010. Figure 8 cognizant reports 8
  • 9. CGT/RIS10 found. While 82% of respondents analytics competency have a better chance of believed it was a sales initiative, 77% said it success. was a supply chain initiative. This dichotomy could result in data inconsistencies between Access to an analytics talent pool and a departments, which in turn will negatively cost-effective delivery model is an equally impact decisions made down the road. important requirement, and consumer goods companies should consider associating with Overcoming this hurdle is, therefore, crucial for partners that can provide these capabilities. companies, and the decisions that drive the move Advances in cloud computing have created toward a single version of the truth must be opportunities to reduce hardware, software made by organizational leadership. Departmental and talent-related costs through business buy-in needs to be generated to share crucial process as a service12 (BPaaS). BPaaS helps save data. This will most certainly involve a dramatic critical Cap-Ex by leveraging cloud computing, cultural shift, which makes the role of leaders with its consumption-based fee structure and even more important. hosted computing model. It is our view that companies that benefit from this scenario will do the following: Analytics as a Service Creating a culture of decision-making based • Create a data management infrastructure that on insights drawn from data shared across the integrates existing data silos. organization will not be an easy task. But given • Develop a single version of the truth to drive the ever-growing complexity of the business improved organization-wide decision-making. environment, this transformation to a data- • Design a strategy to harness the potential of driven culture is essential, and the benefits big data to drive efficiencies and innovation. will be worth the effort. Companies that see • Partner with vendors that can help cut themselves as highly competitive tend to have Cap-Ex by providing a complete solution that a higher analytics orientation than their peers.11 encompasses analytics technology and talent Organizations that empower themselves with an aspects. Footnotes Richard Benson-Armer, Peter Czerepak, Tim Koller, “The Commodity Crunch in Consumer Packaged 1 Goods,“ McKinsey Quarterly, December 2010, https://www.mckinseyquarterly.com/The_commodity_ crunch_in_consumer_packaged_goods_2719. 2 The Pew Research Center defines millennials as the generation that was born after 1980 — the first generation to come of age in the new millennium. 3 “Growth Reimagined: Prospects in Emerging Markets Drive CEO Confidence,“ Pricewaterhouse Coopers, 2011, http://www.pwc.com/gx/en/ceo-survey/pdf/14th-annual-global-ceo-survey.pdf. 4 “Mobile Shopping Doubles over December 2011 Holiday,“ IBM, January 2012, http://www-03.ibm.com/ press/us/en/pressrelease/36472.wss. 5 Samuel Axon, “Old Spice Sales Double With YouTube Campaign,“ Mashable.com, July 27, 2010, http://mashable.com/2010/07/27/old-spice-sales. 6 “Green in the Economy II,“ NBC Universal, 2011. 7 Alan Rappeport, “Emerging Markets Boost Pepsi Sales,“ Financial Times, April 28, 2011. 8 “Beyond Green: The Triple Play of Sustainability,“ Cognizant Technology Solutions, March 2011. 9 “Measuring Up: Improving Sustainability in Consumer Markets,“ KPMG, June 2011. cognizant reports 9
  • 10. 10 “Retailer/Supplier Shared Data Study 2010,“ Consumer Goods Technology/Retail Information Systems News, September 2010. “Advanced Business Analytics Enable Better Decisions in Banking,“ IDC, November 2010. 11 12 BPaaS refers to the provision of business services encompassing underlying IT infrastructure, platform and skilled manpower, to run specific business processes in a virtual, globalized and distributed operating model. References Shobhana Chandra, “Consumer Spending in U.S. Unexpectedly Falls for First Time in Two Years,“ Bloomberg, Aug. 2, 2011, http://www.bloomberg.com/news/2011-08-02/consumer-spending-in-u-s- unexpectedly-falls-for-first-time-in-two-years.html. Robert Higgs, “One More Time: Consumption Spending HAS Already Recovered,“ The Beacon, The Independent Institute, Sept. 9, 2011, http://blog.independent.org/2011/09/09/one-more-time- consumption-spending-has-already-recovered. Aaron Smith, “Mobile Access 2010,“ Pew Research Center, July 7, 2010, http://www.pewinternet.org/ Reports/2010/Mobile-Access-2010.aspx. Steffen Lauster, Elisabeth Hartley, Samrat Sharma, “Consumer Packaged Goods: Escaping the Consolidation Mentality,“ strategy+business, June 6, 2011, http://www.strategy-business.com/ article/00081?gko=8b1c2. Ken Eudy, “Consumer Interest in Sustainability Remains Consistent Through Downturn,“ Capstrat, Nov. 19, 2010, http://www.capstrat.com/news/consumer-interest-sustainability-remains-consistent- through-downturn. Lydia Saad, “Americans' Spending Rises Modestly in December,“ Gallup Economy, Jan. 6, 2012, http://www.gallup.com/poll/151904/Americans-Spending-Rises-Modestly-December.aspx. Credits Author and Analyst Akhil Tandulwadikar, Senior Research Associate, Cognizant Research Center Design Harleen Bhatia, Design Team Lead Suresh Sambandhan, Designer cognizant reports 10
  • 11. About Cognizant Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the world’s 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 137,700 employees as of December 31, 2011, 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 European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. 1 Kingdom Street #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA Paddington Central Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London W2 6BD Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 207 297 7600 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 207 121 0102 Fax: +91 (0) 44 4209 6060 Email: inquiry@cognizant.com Email: infouk@cognizant.com Email: inquiryindia@cognizant.com © ­­ Copyright 2012, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.