What Matters Now

impact

ISSUE 08

What matters now

29 May 2020 kearney.com EDITORIAL

Lessons learned

This week the European Commission unveiled its ambitious proposal for a new fiscal stimulation package of €750bn in an unprecedented bid to overcome the most pronounced recession in living memory. It signaled a significant shift from dealing with the now to looking forward to the rebound. As we start to turn our attention to the future, we have the opportunity to take stock of lessons learned over the last few months and reimagine how we will do business better in the future and be a part of the recovery story.

Over the past couple of months, we (as individuals and consumers) have been testing the boundaries of what can be achieved within the confines of our own homes, accelerating the move to digitization for essential services, leisure and work alike. We have become familiar with a new level of convenience, and sometimes inconvenience. Yes, we may all flock to the hair salon at the earliest opportunity, but will we be so willing to travel for restaurant-quality meals, cinema releases, doctor appointments and home supplies, now we know that businesses are capable of providing these without us needing to leave our homes?

Meanwhile, businesses have learned that without a robust supply chain in place to deal with future disruption, they will falter and quickly lose ground to those that do. Reliance on overseas manufacturing may not be as appealing as it once was, and there has never been a better time to invest in a strong ‘last mile’ delivery capability. Businesses have also learned of late not to rely on foot- fall – whether that means customers in stores or employees in the workplace. Remote shopping, remote working and strong value chains are now the basic building blocks of resilient business models for the future.

This week, we consider how businesses should continue momentum gained over the last few months towards digitization and improved customer service, how to build resilience in manufacturing and supply chains, galvanize your marketing efforts, navigate the conflicting expectations of the contradictory customer and examine new principles for good mental health.

As always, if you want to discuss any of these topics in more detail, we are here to talk. GEIR OLSEN Best wishes from Oslo, HEAD OF EUROPE Geir Olsen CONNECT WITH GEIR SUPPLY CHAINS With mass factory shutdowns, demand space of only a few months, and too quickly surges for essential goods, and shifting for effective mitigation or remedial action. consumer behavior all challenging global Secondly, previous crises have typically been Rebounding value chain flows, this pandemic has sur- concentrated in particular geographies or faced significant questions about near- to targeted specific sectors, but COVID-19 has stronger medium-term supply chain resilience. affected all major economies. Six of the top While traditionally global value chains 10 world economies in terms of manufactur- have been designed around optimizing ing value add are also among the hardest hit and better for cost-competitiveness, this burgeon- by the disease, and more than 75 percent of ing pandemic further underlines the need the world’s global manufacturing output has for companies to orient the design toward been directly impacted. together “risk-competitiveness.” Thirdly, the nature of international trade, in

TEXT BY PER KRISTIAN HONG, XAVIER MESNARD, Certainly, global supply chains have been which the flow of goods as a percentage of THIERRY HEINZMANN AND FALK WEBER knocked—and recovered—such as during global GDP has steadily increased during the 2003 outbreak of SARS or the 2008 the past 50 years, is now highly interde- financial crisis. But this time, as it became pendent. Disruption has therefore been am- apparent very quickly, is different. plified, and recovery will take longer. First of all, the emergency is a global one, The scale, complexity, and urgency of the sit- impacting more than 180 countries in the uation means that no single body can tackle it in isolation. Instead, if industries are to both physical well-being and mental health ensure business continuity, protect em- have been put in place, such as the use of ployees, and shore up supply systems for personal protective equipment (PPE), restric- the future, they will need to find new and tions on employee contact in the workplace, collaborative approaches like never before. switching employees to working from home, Recognizing this, and in collaboration with and travel restrictions. None of our 300+ re- the World Economic Forum, we interviewed spondents said they hadn’t taken any steps and surveyed more than 400 senior oper- to protect employees. ations and supply chain C-suite executives Companies are also supporting suppliers, to codify the current economic impact on customers, and society at large. Suppliers are value chains, share perspectives on the im- being given a helping hand in various ways, mediate response to the crisis, and identify from advances or premium payments to guar- “One area that could the strategies that will be needed to pros- anteed purchase promises. Many firms have improve significantly is per post-COVID-19. repurposed their production lines to produce Our analysis confirms the level of disrup- masks, ventilators, and other much needed adapting delivery tion that has overwhelmed supply chain goods; turned to new types of transportation methods to ensure minimal operations: more than 80 percent of re- to get them where they need to go; or prior- human contact.” spondents indicated that COVID-19 has itized orders for vulnerable customers. significantly disrupted their own setup, One area that could improve significantly with small businesses the hardest hit. however is adapting delivery methods to Summarizing the output from our consul- ensure minimal human contact: only 40 tations, we see three stages of activity that percent of our respondents said that they will be needed to help supply chains out of had put these measures in place. immediate distress and back onto a more secur e, durable footing. 2. Recover: strategic longer-term initia tives to prepare for recovery and increase 1. React: immediate actions to ensure busi- resilience ness continuity and protect employees Looking further ahead, executives spoke ex- Taking care of employees was the number tensively about the impact of COVID-19 on one priority for our survey respondents, their companies’ ability to recover and pre- and a number of active measures to protect pare for future shocks.

Key changes to supply chain set-up

CON SIST ENT REDUCE GLOBAL SPAN MULT I SOUR CING O F S UPPLY CHAIN R E across regions/continents D U by focusing supply chain G C to decrease exposure to I N E on a select set of regions R D single regions (both supplier base and manufacturing sites) U C O O INSOUR C E CORE S M BU SINES S P RIORITIES L CONSIS TEN T S E COND P

A L such as battery production SOUR C E Q UA LIFICAT ION

U in automotive X

in registration dossiers D

T Y I P OWNER SHIP for component designs and production processes as much as possible to be able to switch suppliers or shift to CMO models L O G C A L I Z I N

INCREASE USE OF • LOCA L SUPPL IER S disruptions triggered by trade tensions AND MANUFAC TURIN G or crises such as COVID-19 CAPACIT I E S TO. . . • allow for lower safety stocks allowing for quicker pivoting in times of disruptions • decrease exposure to increasing transportation costs in case of disruption

Source: Source: Key considerations for future (as of April 10) operating models

PEOPLE TE CHNOLGOY

Provide required software by providing people with the / collaboration tools right skills to quickly shift (such as Zoom, Teams) Implement Agile and hardware (such as laptops) both as a methodology to structure to enable remote working collaboration and as a mindset

OPERAT ING MODEL

PR OCESSES ORGA NIZATION

Implement a thorough risk management process organizational design double down on business continuity allowing for rapid response and deployment Anchor remote working Decentralized set-up in organizational set-up and processes to avoid any drastic impact caused by regional lockdowns

First, current supply chain configurations are COVID-19, especially in areas with highly seen as ineffective. Forty-seven percent of complex supply chains, such as industri- executives we surveyed indicated a need to als, healthcare, and automotive. As for fu- overhaul manufacturing and supply network ture operating models, remote working is to increase future resilience. Supply chains here to stay, with 20 percent of businesses are too long, too complicated, and too often across sectors saying they are considering exposed to tier 2 and tier 3 supplier vulner- permanent work-from-home solutions. A “Supply chains are too abilities in a single source supply. Each of shift toward decentralization is also expect- these factors add risk, especially in a crisis ed, enabling organizations to be more flexi- long, too complicated, situation, and businesses are starting to shift ble and make decisions quickly. and too often exposed to their focus away from cost and toward being Finally, relationships will also change. As tier 2 and tier 3 supplier risk-competitive instead. we’ve already seen, many companies have vulnerabilities in a To make their supply chains more effective been supporting their suppliers through- single source supply.” and resilient in the medium term, business out the pandemic, which has deepened leaders are looking to reduce complexity, in- the bonds between them. These vital con- crease their use of local suppliers and manu- nections are an important way to secure facturing capacities, and diversify their sup- supply during turbulent times. Within and ply base to protect supply. across industries, organizations have come Business leaders also noted the role that together to share practices, come up with advanced technologies such as artificial in- new solutions, and keep elements of the telligence, data analytics, 3D imaging, and economy moving. Unfortunately, not every additive manufacturing played as a crucial business will survive, and it’s likely that con- way of arming themselves to face the fu- solidation will follow. ture and adapt to potential disruptions in supply and demand. This presents a huge 3. Reinvent: key imperatives to adapt to po- opportunity, as the companies who are al- tential “forever” changes ready making most use of high-tech tools At this point, it’s unclear exactly how our are demonstrably able to adapt their supply lives will change, and what that will mean chains in the face of COVID-19 better than for global value chains. But with widespread those that don’t. disruption already present due to emerging Unsurprisingly, the ability to adapt to technologies, climate change, and geopo- changing demand and manage risk better litical tensions, it’s clear that the pandemic are two of the top priorities coming out of is acting as an accelerator. As a result, we see five key imperatives that business leaders will need to consider if they’re to succeed in the long-term:

1. Be rapid response-ready. The crisis has forced a change in consumer preferences by removing the vast majority of in-person contact. While it’s too early to say which new habits will remain, existing trends toward personalization and sustainable shopping mean it’s likely that manufacturing and supply systems will need to be able to adapt to further changes in behavior. Be- coming more sensitive to demand through increased use of technology and data analytics will be crucial.

2. Adopt high-tech habits. As we estab- lished, the companies that were best placed to adapt during the crisis were those that were able to make use of advanced technologies. This will only take on more importance as further developments emerge. For example, additive manufacturing makes it possible for goods to be produced directly in the setting where they’re most needed, while automation and advanced robotics are increasing production flexibility and making it easier to switch products across manufacturing locations. All of this points to a shift toward distribution and manufacturing, rather than the other way around.

3. Think global, act global. At the height temporary clinics and hospital facilities set Click to read the full Resilience in Manu- of the crisis, some supply shortages were up to operate in record time. This expe- facturing and Supply Chains white paper, caused by lack of capacity. By coordinat- rience could be used and adapted as we produced in collaboration with the World ing logistics within and across global val- attempt to tackle other challenges such as Economic Forum. ue chains, and using new technologies to climate change. While this has been a glob- enable much better visibility across the al crisis, it is not a crisis of globalization. By entire ecosystem, similar headaches could working together, stakeholders can influence be avoided. Connecting other applications the changes and take the actions needed to such as blockchain and IoT sensors togeth- bring about the best possible solution to nav- er could also speed things up, for example igate the new global scenario. by reducing customs clearance time. If the pandemic has taught us anything, it’s that when we are truly put to the test, we 4. Free tasks from day-to-day operations. are capable of astonishing achievements. Although home working has been adopt- Hospitals can be built in a number of days. ed at breakneck speed out of necessity in Entire operating models can change. And many organizations, the shift needed to collectively, we can do what matters most. make it a success is as much psychological It’s our hope that this mindset will remain, as it is physical. While executives reported a and that by continuing to collaborate, we certain level of cultural resistance to remote can build a manufacturing and supply sys- working, becoming equipped to cope with tem that’s more robust than ever. Because potential future disruption, like successive we’re better together. waves of COVID-19 or outbreaks of other infectious disease, is of vital importance. Virtual and augmented reality could provide the means to enable key tasks or carry out employee training from outside the factory.

5. Take the united approach. Fighting COV- ID-19 has driven new levels of collaboration, Connect with Per Connect with Xavier for example speeding up the delivery of Connect with Thierry medical and essential supplies, and getting Connect with Falk RETAIL BANKING Continuing momentum towards a digital, omni-channel age of banking

TEXT BY SIMON KENT, DANIELA CHIKOVA, SAMEER PETHE AND ROBERTO FREDDI

The lockdown has led to a massive shift to online activity, as people take to the web for everyday tasks and entertainment. What once served as a convenient alternative to the real thing has now become the sole link to the outside world. Shopping, socializing, and entertainment is now done online and thanks to delivery apps, even our eat- ing habits have gone digital.

None of this is new, of course. The trend toward digital has been around for years as technologies improve and businesses ex- pand their services to include better online capabilities. But this pandemic has accelerated that trend, regardless of industry or demographic group. Businesses that weren’t previously offering online services are now frantically upgrading their capabilities and any Internet-averse individuals are receiving quick and basic tutorials by their relatives over Zoom. From a payments perspective, the banking industry is holding up well. While the total number of payments has declined, online further investment and improvement. For Digital banking should now be considered spend has increased amidst the COVID-19 those customer processes that have been the preferred way for customers to engage lockdown, with Visa and Mastercard report- rapidly digitized in the early days of the pan- with their bank. If banks continue to improve ing a 20 percent uplift in “card not present” demic, these now need to be stress-tested their processes at the same speed and agil- transactions and a notable rise in customers and improved as required to ensure long- ity demonstrated at the beginning of the trying online payments for the first time. On- term operational resilience. The same goes pandemic, they could be in a significantly line and mobile banking is helping custom- for any digital processes that were already stronger position by the end of the year. ers to easily service their accounts remotely. in place, which also need to be stress-test- Those that don’t will miss the opportunity to As our collective familiarity with online bank- ed for a more integrated and digital banking continue the momentum created by custom- ing increases, it’s likely that a lot of these era. It’s a win-win situation—digital bank- ers’ new digital habits, structurally change habits will stick beyond the pandemic. So, ing is not only better for the customer, but their cost base, and dramatically improve what does this mean for banks? cheaper for the bank. customer experience. Whatever happens, Our study reveals that 53 percent of Euro- don’t expect to turn everything back on and Customers won’t go back to how things pean banking customers do not use phys- go back to the old world. were, so neither should banks ical channels at all when researching and Customers have shown that they can and buying products. As customers become The lockdown has accelerated the trend to- will interact with banks digitally. The key is more familiar with online banking, due to ward a cashless society to do it in the right order, and at pace. This is the lockdown, we predict that this is set to Since the lockdown, we have become al- a great opportunity for banks to audit their increase to 65 percent in 2025, requiring most completely reliant on digital payments, customer processes—particularly offline European banks with branch-heavy oper- whether through e-commerce payments or processes and their connectivity to digital ating models to focus on developing their contactless transactions. In fact, the con- processes—and prioritize these areas for digital channels further. tactless payment limit has been increased in 29 countries across Europe in an effort banking, which has become even more The CEO of Barclays recently spoke about to reduce human contact for in-store pay- popular since the pandemic, the role of reducing its head office space and even ments. As we gradually return to normal life, the high street bank is becoming less rele- repurposing local bank branches as sites equipped with face masks and hand gel, it’s vant for customers in its current format and for employees holding centralized roles. If hard to imagine going back to the practice of branch numbers will continue to decrease, others follow suit, we may well see a mass handling coins and notes that have changed perhaps at an even faster rate than before repurposing of local bank branches into hands many times across the population. For the pandemic. Our study indicates that we hybrid space for both customer-facing staff retail, this means a huge shift away from cash are likely to see as many as 40,000 branch- and head office staff. payments and more investment in online es (25 percent of all branches in Europe to- payment capabilities. In turn, cash withdraw- day) close across Europe in the next three Customers will expect a frictionless expe- als will decline, cashiers and onsite securi- years. While the starting points will be dif- rience across channels ty in branches will be less in demand, and ferent, the trend is the same across all Euro- Even though online banking is becoming in- most banks will move to cashless branch- pean countries: banks will operate with less creasingly popular, it will always be part of es, providing access to cash only through branches in the future. a broader, omnichannel offering due to the self-service machines—especially for smaller variety of products and services offered, branches and larger urban centers. particularly when it comes to more complex products. Banks will need to invest in an om- End-to-end online banking services have nichannel concept with simple and smooth become more important than ever handover between channels. This isn’t a new Our study also shows that customer online idea—banks have been trying to get this sales tend to be lower than customer on- right for years and while many banks have line research, indicating that they revert to made significant improvements, many still bank branches or customer support services lag behind. If there was ever a time to invest when it comes to finalizing their purchase. in providing a seamless customer journey However, the pandemic has forced us to across digital and offline channels, it’s now. make better use of digital channels, a con- Customers will expect a frictionless experi- venient way of banking that’s likely to have ence. If they start an application online or a lasting appeal, and we predict that 70 per- conversation on the phone, they will expect cent of account openings, deposits, con- to be able to resume their enquiries at a later sumer loans, and credit card applications date using any channel. Seamless connectiv- will happen digitally over the next 3 years. ity will be expected as standard. However, this depends on the end-to-end capabilities of the bank; whether it’s a case If it can’t be done in-house, banks will look of simplifying the documentation process— to acquire a business that can Monzo allows customers to send a screen- In the race to become a frictionless and op- shot of their passports or driving license to …but we will see a new role for bank timized omnichannel offering, some banks open an account, for example—or a case of branches may not be in a position, either financially or updating systems, herein lies an opportunity The relevance of high street bank branches strategically, to develop the necessary capa- for banks to not only streamline their opera- continues to spark debate, especially when bilities in-house quickly enough. tional efficiency but to also offer an improved it comes to financial inclusion for those seamless service to their customers. Less living in rural areas or those who prefer to A new age for banking clicks, less fuss. bank in-branch, notably older generations. The pandemic has proven to be a catalyst It’s therefore unlikely that bank branches for many changes already underway in the Contact centers will go digital—and re- will disappear, although they will need to banking industry. The shift to digital bank- place branches as the #1 point of contact be adapted to better suit this new age of ing, the reduction of high street branches, for customers retail banking. As customer adoption of on- and the need for more connectivity between Call centers are also feeling the effects of line banking increases, bank branches will channels are not new trends, but the pan- shifting trends to online browsing as cus- be primarily staffed by higher-qualified ad- demic has significantly accelerated demand tomers increasingly go online to research visors to focus on more complex products, for these changes to happen, and quickly. By and buy banking products and services. such as mortgages, life insurance, pensions, necessity, the industry is doing things that However, those who still wish to speak to and investments advice. In some countries, wouldn’t have previously happened, result- someone in-person are more likely to use such as the UK, there are regulations requiring in a new way of doing things that may customer services, either through webchat, ing advised sale for certain products, further even prove to be for the better in the long video calls, chatbots, or by phone, than visit adding to the longevity of advisory services run for customers and banks alike. a branch. This provides contact centers with for retail banking. a continued role in the omnichannel mix as This isn’t the only change that we will see they take on more complex customer enquir- in local branches. Remote working, forced ies and provide support for online research by the pandemic, has led to companies and and sales, providing the personal human employees alike adjusting to a new way of contact of a branch visit without the incon- working that has in the main proven to be venience of visiting one. considerably cheaper for businesses and more convenient for staff. Suddenly, those Connect with Simon Connect with Daniela Branch closures will continue… big city-based headquarters seem to make Connect with Roberto Thanks to the increasing adoption of online less sense than they did a few months ago. Connect with Sameer MARKETING Six lessons learned from a three-year Account Based Marketing journey.

TEXT BY KERRY PENNY In the world of B2B marketing, you can’t strict with your criteria so you can dedicate receive a newsletter, read an article, or the time and focus required to continue to attend a webinar without some mention be successful. of Account Based Marketing (ABM). It has “LinkedIn advertising helped us put a name and methodology to is often leaned on Define your programs. Not all accounts what marketers have been trying to do for and overused in can get the same treatment. years – make the most of limited budgets, ABM efforts.” People use the term Account Based Marke- accelerate the business development pipe- ting to bucket two types of programs toge- line, and create preference for the brand ther: large pursuit marketing (or opportunis- with priority accounts. tic) and always-on campaigns. Large pursuit marketing is incredibly customized to each account (1:1 approach). This requires deep Find a champion or two in sales and help understanding of client challenges, the de- them in every way possible. cision makers, your competition, and ide- While the end goal for your program should ally an RFP in sight. Always-on campaigns be full alignment between marketing and are meant to deliver consistent touchpoints sales, it takes time and proven case studies with target accounts and are optimized to get there. Before you try to change the throughout the year. This is typically a 1:few whole sales organization, find one or two or 1:many approach, depending on the size senior representatives who trust you and of your organization. Accounts can be seg- are open to trying something new. If they mented by any number of criteria from in- are willing to give you the freedom to test dustry to challenges to stage of the buyer’s your tactics and learn on their accounts, journey. Define what these two programs take them up on the opportunity and then mean for your organization. Are you equip- help them in every way possible. They will ped to take on both or will one be more im- most likely be your toughest customers, but pactful for your business? your biggest advocates when you’re ready to scale up.

Don’t let Account Based Marketing become synonymous with LinkedIn advertising. One of the simplest, fastest, and most ac- “Understanding the curate ways to target specific companies is foundations of ABM is through LinkedIn advertising. It’s not only important for any effective, but it’s easy for sales teams to un- marketer’s career.” derstand. Because of this, it is often leaned If you follow Alice down the rabbit hole of on and overused in ABM efforts. Digital ad- ABM articles, it can feel quite overwhel- vertising, not just on LinkedIn, plays a huge ming. Experts and analysts have pretty role in ABM success, but the secret sauce is stringent lists of “must-haves” in order for a holistic approach. Total orchestration bet- Empower all your marketers. ABM to work - like perfect marketing and sa- ween digital advertising, email marketing, Understanding the foundations of ABM is les alignment in identifying target accounts, event invitations, sales outreach, content important for any marketer’s career. It tea- director level+ marketers assigned to each creation, research, CRM, etc. Ensuring the ches discipline and focus in content crea- pursuit and days-long planning sessions for most relevant content, experience, or ou- tion, the value of data and research for accounts. While this business development treach from your company is in front of the campaign planning, a test and learn mind- utopia would be ideal, most companies just right person at the client, at the right time in set, integrated marketing strategy, and need to know where to start. What are the their decision-making journey. stakeholder management. No matter their building blocks to establish and pitfalls to specialty area or years of experience, train avoid when starting an ABM program? Once proven, set criteria for support and all your marketers so they are confident lea- stick to it. ding a conversation with your sales team First and foremost, don’t stress – Account As soon as you have a few impactful case about Account Based Marketing. Based Marketing is simply marketing, just examples and word gets out, your team more focused. will become very popular very fast within Most importantly, don’t feel pressured to It can be very tempting to brand everything, the organization. At this stage, you most launch a sophisticated ABM program or hire even internal processes. Giving something likely don’t have a fully dedicated team, all a group of specialists tomorrow. It takes time a brand makes it a thing. This works for se- the necessary tools, or ironed out process and testing to establish trust with sales, hone curing support from leadership but can ac- in place – but you know what you’re doing! your craft, train your teams, and prove bot- tually overwhelm your own team. Without Keep working on your framework and be tom line impact. Remember, it’s just marke- excess capacity the idea of taking on anoth comfortable with continuous changes but ting, more focused. You’ve got this! er new project will seem impossible. Rein- do yourself a favor and decide on your cri- force with your marketers that ABM is not teria for support. These can be attributes something new in addition to their current like potential contract value, a certain RFM workload, it’s a methodology to focus what score, proposal stage or lead time, account Connect with Kerry they are already doing. priority tier, or depth of the relationship. Be

CONSUMER AND RETAIL Do as I say, not as I buy

TEXT BY THIBAULT HOLLINGER AND FRANÇOIS VIDELAINE

A few months ago, Tropicana sparked controversy on social net- works as it announced it would replace the carton pack of its oran- ge juice by a PET plastic bottle. In fact, this change derived from a consumer insight: shoppers prefer transparent packaging to see the color of the juice, a behavior which may have partly driven the loss of market share from Tropicana (carton packaging) to Innocent (plastic bottles) over the recent period.

What is striking here is that the decision was made to please the consumers, while many of them instinctively condemned this shift, some even urging people to boycott Tropicana. Quite contradictory, isn’t it? On paper, consumers are increasingly eager to shift to more responsible consumption habits and overwhelmingly support initiatives heading in that direction. Very often, this unwavering support is precisely what has motivated the strong commitments of most large Consumer Packaged Goods players (CPGs) and retailers towards sustainability. Yet, in many cases, the pace of the transition is hindered by the very consumers who motivated the change: in a nutshell, when it comes to their actual consumption habits, many consumers are not ready to change. At this stage, no one can predict what the post-COVID “no normal” will be, but it is likely that the gap between our values and our actions will get wider: current health concerns and an increasing sense of community might fuel aspirations to a more responsible consumption, but will the individual behaviors follow?

This well-known “value-action gap” is linked to four main factors Price and price perception. Sustainable or healthy products are often more expensive or perceived as such, and many consumers are not ready or able to increase their budget, hence the limited success of organic products for example (despite double digit growth rates in most developed countries, penetration remains limited). Given the current uncertain economic outlook, this price factor might become even more important. Quality and quality perception. Sustainable or healthy products might be “better” in absolute terms, but they often have a distinctive look and feel or a different performance, leading to a lower quality perception at first glance. For instance, nitrite-free ham has a lower carcinogenic effect but a shorter shelf life and a greyish color instead of the bright pink consumers are used to. Convenience and habits. Habits and convenience play a major role in consumption modes and let’s recognize that bringing one’s own packaging to fill it with bulk products is not as convenient as buying packaged goods. Similarly, while on paper many people would support the idea of only buying seasonal fruits and vegetables, most of them would be disappointed if they could not find tomatoes at their grocery shop during winter. Confidence and clarity of information. As a shopper, even with the to change consumer beliefs and behaviors is key to raising aware best will in the world, everyone has experienced how difficult it is to ness and engaging consumers with the goal of influencing beliefs be 100% confident that one picked the right product on the shelf, to change behaviors. When it comes to communicating on sustaina- given the complexity of the information to process and the small bility, staying constructive is key, moralizing consumers with plenty amount of time to make the decision. How to be sure that it is better of figures and risks for the future of the planet has never been an to buy an organic product wrapped in two layers of plastics versus a efficient communication angle. standard product offered in bulk? Taking again the Tropicana example, how to be sure it is better to use the multi-material carton with By gathering consumer insights, adjusting value propositions accor- 23% of plastic and a complex recycling process versus the 50% re- dingly, choosing their battles and investing in information and com- cycled and 100% recyclable PET bottle? munication, CPGs and retailers have the power to support consumers in the progressive shift to a more sustainable consumption mode. It Several CPGs and retailers have already successfully engaged con- is a first and important step on their journey towards sustainability, sumers towards a behavioral shift on each of these dimensions during which they will also need to acquire a set of new capabilities Price and price perception. Some CPGs and retailers have mana- and address various challenges such as packaging management or ged to develop sustainable value propositions while offering a sustainable manufacturing and supply chain. It might be a long run better bargain to their consumers. For instance, looking at the for the home run, but a patient and resilient strategy is the only way reusable packs trend, L’Occitane en Provence has developed in- to overcome consumers’ contradiction for the profit of all. store fountains for some of its references, allowing to refill the bottle at a 25-30% lower price point versus the full bottle, with higher Connect with Thibault loyalty and frequency of purchase balancing the negative price ef- Connect with François fect on revenue. Quality and quality perception. Many brands manage to offer products that combine sustainability and efficiency and/or try to edu- cate consumers to explain and justify the difference in terms of look and feel. As a recent example on the French food market, Fleury Mi- chon has communicated on its nitrite-free – and greyish – ham, clai- ming that “pink is mandatory neither for princesses nor for ham.” Convenience and habits. Most brands that try to change consumers’ shopping habits give them an incentive to do so. H&M has developed the Garment Collecting Program, enabling customers to return clothes from any brand in any H&M store worldwide and receive a voucher for future purchases. Collected clothes are either reused or recycled. Convenient, right? Confidence and clarity of information. Labels and certifications are a way to guide consumers in their choices but there are many of them and some are quite complex. It is the role of a brand - or a retailer - to make sure it remains simple. For instance, Sephora launched its very own ‘Clean at Sephora’ certification to help shoppers more easily find clean beauty brands and products.

Best practices could be completed in a three-step approach For any brand or retailer, successfully engaging consumers to accelerate the shift towards new consumption habits is a unique opportunity to establish a sense of trust and community which can turn into a lasting competitive advantage. Taking a step back, best practices can be derived from the few examples mentioned above and could be implemented in a three-step approach: Know your consumer and choose your battles. It is key to first gath er relevant insights from consumers in terms of aspirations, values, behaviors, and preferences. Based on the right set of consumer insights, it will be much easier to prioritize value-action gaps to close. Winning players will be the ones focusing their efforts, resources, and investments on a limited number of topics: prioritization and “choosing your battles” must be the golden rule. Adapt products to consumers rather than consumers to products. It is far more challenging to change shopper beliefs and behaviors than to take consumer preferences as they are and build a sustain able value proposition that meets these preferences. Taking again the example of carton vs. plastic packaging, this is typically the path chosen by Tropicana as the brand aims at offering a 100% recycled- PET bottle as of 2021. Reach and engage consumers. Whatever the path chosen, adjusting the value proposition to make it both sustainable and in line with consumer preferences or building a value proposition that requires WORK AND WELLBEING

You are not working from home, you are at your home during a crisis trying to work

TEXT BY PAULA BELLOSTAS

Last week I had to change my network password and it led to an al- mighty meltdown. I normally use my next travel destination mixed in with numbers and special characters (you’re welcome, hackers!) and when I realised there was no prospect of a trip anywhere any time soon, the last eight weeks got on top of me and I was a blubbering mess for the evening.

I wasn’t crying about not going on holiday. Since lockdown began I have looked after my daughter from 6am until midday when I switch over with my husband so I can work (not always uninterrupted as you can see on this photo) until she goes to bed and then it’s back to work until the early hours. I am fully aware we are very lucky. We are all healthy, we are both employed and we haven’t lost anyone through this crisis. But the thought of having to continue at this relentless pace of si- multaneously working and parenting whilst feeling like you’re miser ably failing at both with no end in sight got the better of me. A couple of days after password-gate, I came across a viral tweet from an employee of the Canadian government which shared their principles for working from home during lockdown which really resonated with me:

• you are not working from home, you are at your home during a crisis trying to work • your personal physical, mental and emotional health is far more important than anything else right now • you should not try to compensate for lost productivity by working longer hours • you will be kind to yourself and not judge how you are coping based on how others are coping • you will be kind to others and not judge how they are coping based on how you are coping • your team’s success will not be measured in the same way it was when things were normal

I think everyone would agree that these are great principles to live and work by in these uncertain times. But I bet most of us are still overworking, comparing ourselves against colleagues and putting our physical, mental and emotional needs last. The in- existence of physical boundaries between home and work, un- certainties around safety and governmental measures, as well as the blurry economic outlook have triggered increased anxiety, causing a deterioration in our overall physical and mental wellbeing, that, as already reported by many health systems and mental health charities across the world could become an unintended second pandemic. “Sitting with uncertainty is one of the most difficult tasks for any human being to do.”

To coincide with mental health awareness week and in response To complement the support and resources we provide to our peo- to the detrimental effects this crisis is having on mental health, ple, we are proud to join other employers and thought leaders in many organizations are revitalizing their employee support pro- becoming a member of One Mind at Work. One Mind at Work is a grams. At Kearney we have recently launched our Wellbeing Sup- nonprofit dedicated to improving mental health in the workplace— port Series, which will help us better manage constant change an objective that involves combating stigmas, increasing access and increased anxiety. The series focuses on managing mental to treatment and prevention services, and promoting a psycholo- energy, improving sleep and understanding the physiology and gically safe culture. Our partnership will guide our efforts in how psychology of stress. As an anxiety sufferer with a recent history we discuss and foster mental health and well-being in our firm and of burnout, I am excited about the benefits this will bring to all communities. This collaboration was seeded at the World Economic our colleagues and I’m hoping this will help me establish some Forum Annual Meeting in Davos in January 2020, when One Mind clear boundaries and avoid another password-gate episode or even founder, Garen Staglin, joined Kearney managing partner, Alex Liu, worse, a return to my burnout days. for a discussion addressing mental health challenges and bridging As Neha Navsaria, a psychiatry professor at Washington University the joy gap in the work place. Watch the panel discussion here. School of Medicine in St. Louis recently shared in an interview: “It is important to view this time as an opportunity for growth. This is the strange but positive side to adapting to the current times. Sitting with uncertainty is one of the most difficult tasks for any human being to do. Learning how to manage it is one of the best skills one can develop to contribute to mental wellness.” I agree with her who- leheartedly. But as leaders and colleagues we have a duty to look out for our own mental wellness and support others to ensure they can survive this crisis and then indeed thrive from all the lessons Connect with Paula learnt throughout it. ABOUT US

As a global consulting partnership in more than 40 countries, our people make us who we are. We’re individuals who take as much joy from those we work with as the work itself. Driven to be the difference between a big idea and making it happen, we help our clients break through. kearney.com

CREDITS

Concept, editing, design SZ Scala GmbH, Munich Dominik Wüchner, Moritz Gaudlitz, Ellen Verick, Iryna Baumbach

Photos and illustrations All images by Kearney

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