The 14th annual Efficient Consumer Response (ECR) Asia Pacific Conference wraps up today in Hong Kong. The theme of the two-day event, "Collaborating for a Better Future", highlights the importance of creating synergy with consumers and other businesses in an interconnected world. The two main areas of focus are:
The Changing Face of Retail: Conference participants have been absorbing 360-degree insights into the dynamic and ever-changing retail environment, with a focus on digital consumer trends, omni-channel retailing, on-shelf availability, strategic approaches to food safety and retail talent excellence.
The Consumer 2.0: New technologies are influencing consumer behaviours, which is changing the rules of business. Representatives of successful brands, retailers and technology experts are sharing their insights on digital commerce and the new economy and how to win next-generation consumers. Discussion topics include the connected consumer, the future pulse of e-commerce, retail "big data", supply chain transformation and retail best practices in the region.
ECR Asia Pacific is a non-profit organisation established to help improve the FMCG (fast-moving consumer goods) and retail/wholesale industries by focusing on collaboration. Since the 1990s, country-based ECR organisations worldwide have been holding seminars, conferences and workshops for members to share, collaborate and improve the industry as a whole for better and stronger potential.
The ECR country boards encourage the adoption of ECR principles to serve consumers better by removing cost from the whole supply chain and improving service across their connections in the grocery industry.
Thailand represents a good example of the adoption of ECR in Asia. In 1997, to meet the changing demands of the market, ECR Thailand was set up with the slogan "Working Together to Fulfil Consumer Wishes Better, Faster and At Less Cost". Recognising the wholeness concept of supply chain management, ECR in Thailand focuses on improving the efficiency of each member of the supply chain to meet the goals set out in its slogan.
ECR principles comprise 14 concepts of business improvement under the subheadings of demand management, supply management and enabling technologies, as can be seen in the graphic.
A major release at this year's ECR conference is a report from Accenture entitled "Asean's Limited Time Offer". The 10 Asean members represent one of the largest opportunities on the planet, making the region a must-win battleground for global consumer packaged goods (CPG) companies. The CPG industry is expected to grow by 9% annually until reaching a value of US$220 billion in 2017. The Asean Economic Community (AEC), set to take effect late this year, will further enhance the region's appeal by making it easier to do business across borders.
Accenture sees three major challenges to winning in the rapidly evolving Asean market. The first is finding and reaching these new consumers in a highly fragmented landscape characterised by capital cities and emerging urban areas, multi-tiered distribution systems with minimal reliable data to guide market entry and a diverse range of cultures.
The second is winning and maintaining customer loyalty. Accenture research also shows only 34% of Asean consumers are loyal to specific brands.
The last challenge is standing out amid ever-fiercer competition. Local brands have the advantage of understanding and serving Asean segments and are planning to leverage Asean economic integration to expand in the region.
Accenture recommends that companies focus on three areas:
Creating awareness of your product and locking in future demand by building loyalty requires engaging the new consumer early, often and with precision.
Ensuring availability is only fingertips away means getting supply right and making your product available everywhere a consumer is.
♦An effective operating model tailored to Asean will deliver advantages that affect both consumer reach and product availability. This operating model will need to be regional to benefit from scale efficiencies and critical mass while also reflecting distinctive local insights and action.
Finding that critical mass across Asean while dealing with all of its very different cultures and market conditions will always be hugely challenging. And in all our years in Asia, we have been bemused by the apparent acceptance by the industry and consumers of high levels of "out of stock". Why does something as simple as going to the supermarket continue to be so hit and miss?
The Link is coordinated by Barry Elliott and Chris Catto-Smith as an interactive forum for industry professionals. We welcome all input, questions, feedback and news at: barry.elliott@abf1consulting.com cattoc@freshport.asia