1. Analogue to Digital:
Consumer Goods Trends

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Agenda
What the future holds for the
consumer goods industry
The journey to a digital operating
model
How to transform to a digital
operating model

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What the future holds in consumer goods
In Emerging Markets
1 billion new consumers
• New drive for localized products and choice
• Newly affluent emerging market middle class
• Newly urban populations as new consumers
In Developed Markets
Mature markets seeking value
• Growing cash-strapped segment of consumers
• Greying urban population living longer, healthier lives
• Green consumers seeking sustainable options
In The Digital World
An entire generation of consumers has grown up on digital / social media
• Low-cost connected devices are widely available to consumers worldwide
• The rise of multi-channel buying is dramatically changing the consumer experience
• Consumer expectations for products and services are at an all time high

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More than 720 million Africans have phones, some 167
million use the Internet, and 52 million are on Facebook
Africa is undergoing a digital
revolution…
..with consumer becoming more
connected to a global marketplace
Egypt
13 010 580
Kenya
1 886 560
South Africa
5 534 160
Nigeria
5 357 500
Ghana
1 465 560
Algeria
4 322 820
Tunisia
3 436 720
50 386 760
African Facebook Users
D.R Congo
891 140
*source: www.socialbakers.com
Africa is going Digital
167m
Internet users in
2012
600m
Internet users in
2025
67m
# of smartphones
in 2012
360m
# of smartphones
in 2025

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In Africa new consumers and digital are happening
at speed and simultaneously
Retailers will need to open 15
million outlets by 2015 to reach
these new consumers or connect
online
Millions of first time consumers are
there to become loyal to brands
Emerging and developed market
consumers are going digital and social at
the same time
Leveraging
digital
technology is
the only way it’s
economically
viable to
compete and
win in this
environment

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Converging Moments of
Truth
Digital blurs the distinction between
“selling” and “marketing”. Increasingly
even off line purchase is proceeded by
points of search to drive purchases.
The digital world is driving dramatic industry
disintermediation
Monologue to Dialogue
Traditional analog media are one way.
Digital is all about engagement and
interactions leveraging huge amounts
of data to be relevant.
Extended Enterprise
Digital is changing the way CPGs
manage their whole ecosystem
beyond the enterprise – suppliers,
distributors, retailers are all connected
Retail Revolution
Smaller formats emerging in developed
markets and remains key in emerging
markets. New consumers may leap frog
brick & mortar retail. New digital retailers
emerge – merchandising and
promotions will be different.
Reinvent Product Marketing
It does not work digitally. Product ranges
should expand exponentially as physical
store constraints disappear and
customization becomes possible.
Focus on Individual
Consumer, influencer, shopper,
employee – they are all digital and
expect specific attention

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This digital revolution has become a launch pad for
a new generation of digital entrepreneurs
Digital Case Studies
Jumia PagamoWoza
The rapid growth of
Jumia.com has seen it
emerge as arguably the
country's number one online
shopping portal
The site controls 70 percent
of the online retail market in
the country and has serviced
about half a million
customers in its over one
year of existence
moWoza is a mobile phone
marketplace platform that
allows informal cross-border
traders to access price-
related information and an
order and pre-pay inventory,
and to receive delivery
status notifications and
access credit on their mobile
phones
Paga allows its users to
transfer money to anyone via
a mobile phone or other
internet connected device.
According to the Paga
website, its service is
currently being used by over
57,000 Nigerians. The
company has a grand
ambition to serve 40 million
users by 2015

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And the impact is significant for
consumer goods companies
Boundaries between the traditional
participants will continue to blur
Manufacturers will become retailers,
distributors and media owners
Shoppers will drive product design
and development

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Industry trends have influenced the development of
consumer goods companies over the last two decades
Global reach, billion dollars brands and global capabilities have
been the targets for the past decade
The alignment and synchronization of the enabling capabilities and
a sustainable business case along the transformation have been
key elements of the Operating model evolution
The journey defined winners and losers (growth, M&A, profit).
Different speed and navigation paths were followed.
Generally this transformational journey has been associated with
increased earnings and profitability - more than double digit growth
in earnings in every year since 1995. However earnings have
outpaced sales growth in all but the last two years.
They have been on a journey from their
local roots to become global giants.

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And now it is time to evolve to a
digital operating model
Scale
Reach
Margin
Leverage
Increase
Profitability
Double Size
of Business
Local Regional Global Super Global/
Super Local
Digital
Disintermediation
Fluid
Business & Operating Model
Autonomous
Market
of One
Improve Margins
Through Cost
Reduction
EnablingCapabilities
Global trends
provide
opportunities.
Economics drive
change, and each
operating model
change delivers a
competitive
advantage.
Where We Have Come From Where We Are Going
Global
Economy
WTO
New
Consumers
Digital

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Local Regional Global Super Global/
Super Local
Digital
Disintermediation
Fluid
Business & Operating Model
Processes&Technology
Capabilities have to evolve to support the journey
to a digital operating model
EnablingCapabilities
First
Movers
Some
CompaniesMost of
the Industry
Few and
Far Between
Very Few
Companies
None
Interactive
Real Time
Consolidated
Archetypes
Fragmented
Back-end
Package
Driven
Front-end
Process
Driven
Relationshipand
Experience
Driven
CPG Push Ecosystem Leverage Consumer Pull

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Local Regional Global Super Global/
Super Local
Digital
Disintermediation
Fluid
CPG Push Ecosystem Leverage Consumer Pull
Business & Operating Model
Processes&Technology
Interactive
Real Time
Consolidated
Archetypes
Fragmented
Back-end
Package
Driven
Front-end
Process
Driven
Relationshipand
Experience
DrivenWhat’s made you successful in the past will not
make you successful in the future
EnablingCapabilities
Command
Consensus
Top Down
Bottom Up
Geek
Agencies
Big Bang
Leap Frog

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Digital Disintermediation
Leading consumer goods companies will abandon geography as
a basis for organization and reorganize around archetypes for
route to market / retail and category /consumer types
Emerging Market
Challenge
End Of Dominance of
Bricks And Mortar Retail
Local Product
Marketing
Digital Media
Ownership
Local Sensing
Mass
Customization
Centralized and
Decentralized Extended Enterprise
…will involve a fundamental rethink of corporate structures, customer
engagement, product development, supply chain, marketing and sales.
Leverage Brand
Global Product
Marketing
Global R&D
Centralized
Global Super Local
Evolving the operating model

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It will revolutionize how consumer goods
companies operate
Disrupt with a digital operating model!
Must be driven by your commercial business, not
IT department
Be deliberately digital. Move digital responses from tactical
to strategic.
Start with the consumer and work back
Not about digital marketing – about the digital enterprise
Integrated across the business
Geography is no longer the basis for management
and organization