It’s not fast commerce, but the obsession with 10-minute delivery that’s exclusive to India: Isabelle Allen, global head of KPMG

At a time when disruption is impacting every industry, ensuring businesses remain robust is crucial. As technology and AI in particular gain traction, one element is that of the consumer. How this plays out is fascinating but presents multiple challenges.

In a conversation with BT’s Krishna Gopalan, Isabelle Allen, Global Head (Consumer & Retail), KPMG International, expresses his thoughts. Excerpts:

Global consumer markets have become increasingly complex. What is your view on this?

I view the world of consumer markets as four pillars. The first is changing consumer behavior, the second is the geopolitical environment and its impact particularly on supply chains, while the third is disruptive technology including generative AI. The last one is “Be Good, Do Good”, the future of sustainability and ESG. So we are seeing the collision of consumers and retailers.

You need volume growth to absorb these fixed costs and you find yourself in a situation today where many companies are talking about going premium. That said, the quest for volume growth is increasingly becoming the holy grail for a number of companies – for various reasons, there are certain segments where consumption is declining due to the demographic impact of certain markets and a shrinking population.

There is a commonality between the world and India. After inflation becomes a reality, there is job insecurity and even in countries where there are jobs, the quality of jobs is actually much lower. Therefore, there is a lot of pressure on wallets when it comes to where we spend. Consumer behavior is changing in terms of where they want to spend.

So when you look at high-income households, of course they have a lot of money, but they spend on a variety of things. They are not going to increase consumption of basic necessities and personal care products because they already have all that. And when we look at those at the bottom of the pyramid, we see pressure on income. Therefore, people make compromises and choices.

Let’s look at the geopolitical environment. I believe the cost of doing business across borders has exploded due to increased friction at each stage of the value chain. This means pressure on turnover, as sales growth in volume and price is increasingly difficult. Additionally, all input costs have increased – look at raw materials, coffee, sugar, cocoa, palm oil, all of which have exploded in consumer products. Labor costs have also increased, which then brings with it this burden of compliance and regulatory obligations.

Fast trading is a big story in India. How do you see it?

I have lived in the UK and also spent a lot of time in Asia. Rapid trade is not exclusive to India. What is proprietary, however, is the obsession with this 10-minute delivery, which, to be honest, is quite confusing to me. In my opinion, I don’t think that on a human level this difference is necessarily that important, but we live in a world where the retention of time is getting shorter and shorter.

In the Indian context, fast commerce exists both as a business and as a channel. You have to understand that fast commerce is a digital business. A digital product could be a restaurant reservation or a movie ticket. You’ll continue to see a lot of experimentation that they do because DNA is about experimenting and trying and failing and testing.

Keeping this in mind, what is the role of consumer insight or market research?

We’re seeing a lot of disruption in this space. In my opinion, market research is no longer about collecting static data, but rather about obtaining insights. Businesses look to market research to tell.

For many companies and brands, the premise was that if you went direct to consumer, you would have proprietary data about your consumer. This would be key to your future success, as it would bring you closer to a better understanding of consumer behavior. The reality is that this journey has proven to be very difficult. You can’t invent yourself as a direct-to-consumer business because that’s a different mindset.

How do you find the balance between a consumer who seems fickle and inundated with options and an organization that needs to think long term?

I think listed companies are under different pressure in the face of this change than entrepreneurs, developers or family businesses. Very often in the consumer and retail sector, they need a transformation of their business model just to be clearer. Issues in retail are extremely complex. On the one hand you want to be a responsible employer and on the other you know that AI will bring you productivity gains.

People increasingly need to deliver results through experience and that’s not easy in a quarter-by-quarter conversation. But if you know what you stand for as a company in terms of values ​​or products or brands and the trust that you want to build in them, then those companies can coach their investors by saying, “You know, this is what I’m trying to be in this environment and this is where I’m going to compete.” »