How My Children are Changing the World
A few months ago I wrote a blog, “A 360 Degree Perspective On Customer Engagement,” where I touched upon the 21st century consumer who is always on, always connected, and doesn’t make a move without consulting the internet.
When I think about it, that means my three sons are the typical consumer – a scary thought indeed! They don’t, and never will, read newspapers. They fast forward through the ads on TV. They spend hours huddled over the font of all knowledge – the smart phone – even when in the same room as their friends! They would rather communicate using text messages, Instagram or Twitter than (God forbid) pick up the phone and talk in person. And when they do talk face-to-face, it is usually via Skype or Facetime.
And they are the norm in the millennial generation, which will become the largest generation with the greatest combined purchasing power in history ($2.45 trillion worldwide by 2015). My children, and their (virtual) “friends,” are driving demand and changing the game for businesses today, literally “changing the world.”
To this end, Nielsen recently launched a mobile app for consumers to provide information about ‘what’s hot’ across categories such as books, video games, cosmetics, candy and beer. This can be personalized based your age, location and gender, so that you can check out what people like you are buying. As part of the launch, they are embarking on a ten-day, ten-city bus tour of universities around the US to introduce the app to college students.
What does this mean for business systems?
Todays customer may know (or think they know) more about your product than you do! It is critical for manufacturers to have the same – or better – visibility to the information that your customer has; to know what they are thinking before they do through a true 360 degree view of their world.
This involves gathering insight from within and outside of your organization, from all available structured and unstructured sources. What is trending about your products? What is the current sentiment analysis? What is selling in each store, location or region?
Gathering a true picture of actual demand and available products, all social and sentiment analysis about your customers and your products, and all relevant market dynamics enables this complete view –in real time, wherever you are, on whichever device you have near you. Only then can you focus on manufacturing, delivering and targeting the right product, to the right customer, at the right time.
Let’s take an example. Traditionally, we have used order or shipment history, along with a sales plan, as the major inputs into the forecast process, which has forced us to drive business based on historical information, as todays forecasting can be weeks – or months – behind the actual demand signals. This is like driving your car looking in the rear view mirror. You can see what you’ve already passed, but you often have no idea what is coming.
What is needed is the ability to sense actual demand signals and indicators across the entire network in real-time. Only then will we have access to all sales transactions as they are happening by your customers. We could see the sentiment of our products by customers and consumers as it happens. This would give us accurate demand plans (through a windshield), not just statistical forecasts (through a rearview mirror).
How do we get there?
A new set of tools is needed to capture and analyze these structured and unstructured demand streams to give a holistic picture of Demand Management. The tools must not just sense and capture the data but also integrate these external demand signals into the company’s demand planning, fulfillment and promotional processes to respond appropriately to changes. Only then can the company gain the benefits, such as increased customer service levels and reduced inventory.
An accurate demand plan requires the capture of historical forecast trends. These different forecast sources can be compared and mathematically blended taking into account demand analytics that characterizes demand by analyzing historical forecast accuracy, bias and intermittency trends.
It is equally important to understand what the perception of your competition is in your target market. By leveraging the sentiment and actual performance of your competitors, you can build a comprehensive and up to date picture of the overall market opportunity, and change plans and promotions accordingly.
At the end of the day, if I understood a tenth of what kids (and millennials) today were thinking, I’d be a millionaire. Demand management tools may be the first step to getting there!
Follow me on twitter @howellsrichard
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