With the rise of consumerization, products aim to create a more personalization experience for each user. In fact, McKinsey & Co., suggests 71% of consumers expect companies to deliver personalized interactions—and 76% get frustrated when this doesn’t happen. Let’s be honest, since the emergence of digitalization we are a society that expects products now, in every size, shape, and color. Companies that do deliver personalization will grow faster and drive 40% more revenue from personalization. Here’s the challenge: While delivering this, companies must also keep sustainability top of mind.
In recent years we have seen a real focus by consumers seeking to spend their dollars on companies that create sustainable products and services. A study by NielsenIQ found 78% of U.S. consumers say a sustainable lifestyle is important to them and more than one in 10 will go as far as to personally choose a brand that is more sustainable and environmentally friendly. What has weighed heavily on the minds of company executives? Will consumers truly spend more money for these products and just how much will they be willing to fork over?
What’s more, a study between both NielsenIQ and McKinsey found products making ESG-related claims averaged 28% cumulative growth in the past five-year period, versus 20% for products that made no such claims.
What Does This Mean for Manufacturing?
The bottomline is CPG (consumer packaged goods) and manufacturing companies have a tall task ahead of them. They need to deliver personalized products in a manner that is sustainable if they want to remain competitive. There are numerous ways to approach this—and most include some form of technology.
Robots are naturally one tool in a manufacturing plant that can help address many of the challenges today the industry faces such as labor shortages and heightened sustainability needs. Here on the blog, we have written about one case study that creates a reduced footprint for one task, while enabling greater efficiency.
For many, the key lies in the supply chain. Long before COVID-19 was a household phrase, supply-Delays chain executives were working hard to gain greater visibility in the supply chains because many knew one small crack would mean it could crumble. Delays in the supply chain could lead to weeks of delays and millions in lost services. Greater supply-chain resiliency can be achieved with advanced technology. Digital twins, for example, can offer model scenarios and simulations to anticipate problems in the supply chain.
Another key component here—especially as it relates to sustainability—will be measuring and tracking products throughout the lifecycle to build these more sustainable products. Consider the example of Dayrize and Avery Dennison, working in tandem to enable businesses to monitor the impact of the products they make and sell throughout their supply chains. Avery Dennison’s atma.io connected product cloud is a platform that tracks products through their lifecycle while Dayrize provides product-level environmental and social intelligence.
With this data in hand, businesses can manage data for products, including the environmental impact associated with each product, which spans specific details such as carbon emissions, water depletion, and land used for each product. Under the new partnership, Dayrize’s sustainability impact data will be presented on Avery Dennison’s platform. Ultimately this will enable consumers to make greater sustainable purchasing decisions.
Of course, this is simply one example. We see several companies are reaching for greater sustainability, as the consumer remains king in today’s buying environment. In the months and years ahead, there is no question other manufacturing companies will need to be more transparent in the circular and sustainable efforts if they intend to keep their most loyal customers. If you are a manufacturer, which has put the ball in motion and want us to know about it, reach out to me at psmedley@connectedworld.com
As a manufacturer you know better than most what these changes will mean. How long will it take for others to continue to follow suit and step up to the proverbial sustainable plate? My hunch is not very if investors have anything to say about it.
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