The digital tipping point for consumer product companies

Overcoming forces to unlock new potential

​Many consumer product companies have invested heavily in digital technologies and capabilities that can help them transform into a truly digital organization. Research by the 'MIT Sloan Management Review' in collaboration with Deloitte Digital reveals that for some businesses, the transformation realities have fallen short of expectations—with a tendency for consumer product companies to lag other consumer-facing sectors when it comes to digital maturity. Five organizational tensions could be preventing these companies from achieving their true digital potential.

Tensions in focus

As leaders at consumer product organizations continue to move forward on their journey to become a digital organization, a handful of forces threaten to hold back many businesses.

Short-term margin pressure, a limited digital IQ, an unspoken talent war, uneven velocity, and cognitive inertia all threaten to inhibit digital ambitions.

Our new infographic, The digital tipping point for consumer product companies, offers help for leaders looking to understand these tensions and garner strategic insights for addressing them. Based on research by MIT Sloan Management Review in collaboration with Deloitte Digital, this piece looks at each of the five tensions through the lens of marketplace insights and implications for leaders seeking a way forward.

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A few key insights and implications

Short-term margin pressures: Myriad "business as usual" pressures such as competition and merger and acquisition activities orient strategic planning to today's needs rather than tomorrow's. Leaders, however, can start at "the edge"—finding opportunities in which they can scale rapidly and move their way to a digital core.

Limited digital IQ: Chief digital officers often report into functional heads, limiting digital focus to segments of the value chain. Organizations can create stronger digital stewardship by appointing chief digital officers to the executive team and giving them enterprise-wide mandates.

Unspoken talent war: Heavy reliance on partner and agency relationships for digital stifles internal capability development. Organizations can "take back" digital capabilities from agency partners by selectively insourcing "marketing 2.0" capabilities to drive consumer intimacy.

Uneven velocity: Many consumer product companies are revisiting and questioning large decisions instead of learning and advancing through failure and response. One way forward: Learn how to learn, applying a new "double loop" approach to learning while continuously challenging the status quo.

Cognitive inertia: Many consumer product companies struggle to access or own quality consumer data needed to form a single view of the consumer. Breaking through this barrier will require an exceptional ability to gather and interrogate consumer data across categories—all the time.

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dominoes in a circle

From laggard to leader

The full integration of agility, digital talent, and analytics across the enterprise will separate leaders from laggards.

How does the consumer products industry compare with other industries? On a scale of one to 10, information technology and technology companies come out near the top of consumer-facing sectors, with a 6.4 average maturity score, based on data from the 2017 annual digital business global executive study by MIT Sloan Management Review, in collaboration with Deloitte Digital.

Consumer goods companies rank lower, with a 4.7 average score for digital maturity—just ahead of the automotive category, with a 4.6 average score.

Explore the infographic to get details on how consumer product companies stack up against other industries when it comes to addressing the five organizational tensions that inhibit true digital potential. Discover what it takes to start moving from laggard to leader.

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falling dominoes in a circle

Get in touch

Rich Nanda

Rich Nanda

Consumer Products Strategy & Growth Leader

Rich is the practice leader for US Consumer Products Corporate Strategy & Growth area and a principal of Deloitte Consulting LLP within the US Strategy service line Monitor Deloitte. Rich’s experience... More

Jacob Bruun-Jensen

Jacob Bruun-Jensen

Principal | Monitor Deloitte

Jacob is a Strategy principal within Deloitte’s Consumer & Industrial Products sector with a focus on Business Transformation, including operating model design, profit improvement, and zero-based budg... More