Why brands should take a new digital approach to responsible growth
This blog, from DNV GL, outlines how businesses can engage their consumers in powerful authentic brand stories that promote trust and highlight sustainability.
The formula for Responsible Growth has changed. The original went something like this: Design for resource efficiency + Innovate in your supply chain + Count the revenues from a portion of your portfolio which you can present as “Responsible Growth” in your corporate sustainability report.
However, this doesn’t deliver the step change in growth and profits that Boards and investors are seeking. Most consumer goods companies face retailers systematically creating their own low cost brands while digital natives are disrupting markets and rendering their products mere commodities. In the race to avoid commoditisation leading Brands are increasingly asking: How does our responsible growth agenda contribute to our commercial digital strategy? There are several ways to answer this question each one creates value in a different way:
Better Stories: Companies that have genuine values-based attributes in their products can achieve robustly assured claims for their products and therefore can tell their consumers a compelling and authentic story. This creates value through differentiation and a measurable return on the investments that made those values possible. The Consumer Goods Forum recently published a report on product transparency emphasising renewed consumer appetite for these stories at the point of consumption. Digital technology can enhance the consumer experience as we have seen with our MyStory™ blockchain solution which takes robust assured data and enables a powerful story to be presented to the consumer at the click of a QR code on for example a wine bottle or a luxury bag.
Deeper Insights: Digital strategy is being driven by high quality data and analytics. Amazon buying Wholefoods has been likened to the purchase of a massive data sensor to drive deeper insights into consumer behaviour. Nike put sensors into their shoes to enable both customers and communities to get deeper understanding of successful running traits. Transparent sustainable products that come linked to a “sensor” of some kind (even through a simple “app”) offer the opportunity to get deeper insights into what consumers really care about and what their next set of preferences might be.
Closer dialogue with consumers: Transparent sustainable products can go beyond stories and insights by taking centre stage in a platform. Here they can enable dialogue and peer exchanges around both the products, their usage and the associated lifestyles and values. This has a lot more potential for genuine consumer engagement than a conversation about conventional product attributes and can generate deeper insights than the usual focus groups. These steps seem intuitive to most Chief Marketing Officers and Brand Managers and we see many companies embracing these trends to leapfrog those competitors who are still pursuing a conventional approach.
Uniting each of these steps is the key enabler of effective data management. This is where we have seen leading companies bring together their Brand Managers, IT functions, Heads of Supply Chain and Sustainability Managers to ensure that data can be rapidly mobilised to drive effective digital strategy. Some companies are even appointing “Chief Data Officers” while individual professionals in supply chain, sustainability and marketing functions are personally investing in their own data competence to ensure they are equipped for the future. Leaders are emerging who are starting to replace the well-worn formulas of responsible growth with something that is fit for the digital transformation age.