U.S. Consumer Goods: Putting Social, Mobility, Analytics and Cloud to Work

U.S. Consumer Goods: Putting Social,
Mobility, Analytics and Cloud to Work
By deploying SMAC technologies as an integrated stack, U.S. consumer
goods companies can improve operational nimbleness, unlock
operational efficiencies and grow opportunities – all amid the sluggish
economic recovery, weak domestic growth, unabating cost pressures,
tough private label competition and a significant shift in demographics
and business models.
• Cognizant Reports
cognizant reports | June 2013

cognizant reports 2
Executive Summary
For the last 50 years, consumer goods (CG)
manufacturers have enjoyed year-over-year
growth in developed markets as the baby boomer
population increased spending as their families
grew. Today, growth is expected to come from
the new middle class in emerging markets and
from increasingly targeted “micro-markets” in
developed markets. Winning in this environment
will require new analytical and technical skills in
several key areas:
• Social media: The new way to build meaning-
ful, authentic and relevant conversations with
new and prospective consumers.
• Mobility: The path-to-purchase is fast evolv-
ing. Mobile engagement, whether with smart-
phones in the developed world or feature
phones in emerging markets, is compelling
consumers to shop and check prices on the fly.
• Analytics: To create value from “big data,”
CG companies need to invest in “big insights.”
• Cloud computing: Companies are increasingly
looking for new, affordable ways to house infor-
mation, including analytics-related data.
Taken collectively, we refer to these capabilities
as the SMAC StackTM
.
For the consumer goods industry, the case for
putting the SMAC Stack to work is driven by two
broad directional forces: macro industry trends
and technology imperatives. These issues are
exerting competitive pressures and creating new
opportunities for CG companies.
Even though spending by U.S. consumers is
rising, a variety of factors (cost of living and
employment challenges, among others) has
reduced their buying power. This has forced many
buyers to become increasingly value-conscious —
a situation that is impacting businesses across
the CG spectrum. The painfully slow economic
recovery underway in the U.S. is adding to the
challenges faced by many CG companies, par-
ticularly those whose profitability has stagnated
during the past few years. They continue to face
cost pressures while competition from retailers’
private labels intensifies.
Given diminishing growth opportunities in devel-
oped markets, U.S. CG companies are venturing
into global markets – adding complexity and cost
to their operations.
Furthermore, a significant shift in demograph-
ics and business models is underway in the U.S.
The 50-million strong, digitally-savvy “millenni-
als” are expected to soon constitute the biggest
segment of the domestic population. The rise
of digital consumerism is also changing how CG
industry conducts business. Many consumers
now prefer to buy online and use coupons offered
through digital channels. CG companies need to
quickly adapt to these digital realities and forever-
changed consumer preferences, while focusing
on improving operational metrics and building
competitive advantage.
Moving in this direction will require quickly shift-
ing strategies to improve operational agility and
responsiveness. CG companies should consider
investing in social, mobile, advanced analytics
and cloud technologies (the SMAC Stack) as an
integrated set in order to reap the full business
benefits. This can have a multiplier effect on ben-
efits, and serve as a foundation for breakthrough
results in business performance.
For example, using SMAC technologies, companies
can improve customer engagement by delivering
differentiable and valuable digital experiences.
With social media, it is now same here easier to
market directly to millions of customers – unique
markets with varying preferences and tastes.
Powerful analytics tools in conjunction with social
media, mobile devices and cloud technologies can
help CG marketers identify and target customers
and customize campaigns at reduced costs.
The SMAC Stack can also play an important role
in driving operational efficiencies and handling
complexity (i.e., product configuration, cross-
segment marketing initiatives), especially for
companies that are aggressively moving into
global markets. For example, analytics, along
with demand signal repositories,1
can help CG
companies collect and glean deeper insights from
operational data … quickly identify customer
demand … and sync that demand with supply in
real time to more effectively serve customers. And
by using mobile devices and cloud technologies,
companies can improve productivity by enabling
employees to work from anywhere – multiplying
improvements in operational efficiency.
As this white paper demonstrates, CG com-
panies that invest in the SMAC Stack stand a
better chance of increasing efficiencies, deliver-

cognizant reports 3
ing greater business value and unlocking new
growth opportunities.
Driving Forces
The U.S. consumer goods industry is beset with
several challenges. A slow economic recovery
and competition from private labels is putting
pressure on the bottom line. The emergence of
the digital consumer (i.e., business conducted
over digital media), commodity price volatility,
shifting demographics and the expanded growth
focus on global markets is making the consumer
goods business more complex, and is negatively
impacting operating metrics.
With the significant shift toward digital transac-
tions,2
the capabilities of the SMAC Stack can
help CG companies make the strategic shift
required to survive and compete. This starts with
more effective customer engagement – driving
sales through lower-cost, higher-profitability
channels – and cascades across CG enterprises by
improving operational efficiencies and providing
more command and control for handling growing
operational complexity.
Slow Economic Recovery
The U.S. economic recovery remains sluggish.
IRI’s MarketPulse survey notes that even after
four-plus years (the official end of the global
recession), 22% of consumers still find it difficult
to afford groceries. Yet the consumer-spending
and savings rate has increased, albeit marginally,
over this time frame.3
This is a positive sign for CG
companies; it means consumers may have more
to spend as confidence improves.
Financial Performance
Our analysis of the Top 504
CG companies in the
U.S. reveals that they have successfully managed
to lower their cost-to-income ratio from 2006
through 2010 – recording a marginal increase in
2011 (see Figure 1). During that time, the cost of
goods sold constituted, on average, 66% of the
Decreasing Cost to Income Ratio*
0.79
0.81
0.83
0.85
0.87
2006 2007 2008 2009 2010 2011
Figure 1
*The cost to income ratio of the top 50 U.S. consumer goods companies. The list comprises the top companies
based on revenues for FY 2012 from each of the sub-categories of the consumer goods industry in the U.S.
Source: CapitalIQ and Cognizant Research Center Analysis
Break Up of Costs*
Figure 2
*Break up of the costs of the top 50 U.S. consumer goods companies. The list comprises the top companies
0
100
200
300
400
500
600
2006 2007 2008 2009 2010 2011
US$Billions
Cost of Goods Sold SG&A Tax, Interest, Other

cognizant reports 4
total expense for the these companies (see
Figure 2, previous page). Sales, general and
administrative SG&A expenses constituted, on
average, 31% of the cost of total goods sold from
2006 to 2011, although the industry managed
to marginally reduce this expense from 2008
through 2011 (see Figure 2, previous page). Net
profit remained relatively unchanged between
2006 and 2011 as total revenues and total
expenses grew almost proportionately during
that period (see Figure 3).
Managing and Competing with Retailers
The rise in value-seeking consumers is a direct
aftereffect of the global recession. For instance,
consumer resistance to price increases is pro-
pelling private labels to grab market share from
traditional CG companies by offering compara-
tively cheaper products, albeit in select catego-
ries. According to IRI’s MarketPulse survey, 50%
of consumers are buying more private-label
brands post-recession compared with pre-reces-
sion levels. In 2011, private labels accounted for
approximately 19% of dollar sales and 23% of unit
sales across CG channels.5
Retailers are employ-
ing their understanding of consumers’ buying
behavior and using insights generated from the
analysis of point-of-sale transaction data to pro-
mote and push more high-margin private labels.
CG companies are under pressure to deliver prod-
ucts at lower prices, and manage retailers that
seek products with everyday low prices. Con-
sumer goods manufacturers also face a challenge
to enure that their products secure appropriate
shelf space in retailers’ physical and online stores.
Flat Net Income Margin*
US$Billions
0
200
400
600
800
2006 2007 2008 2009 2010 2011
Total Revenues Net Income Total Expenses
Figure 3
*Net income margin of the top 50 U.S. consumer goods companies. The list comprises the top companies
Global Growth is Heavily Dependent on the Non-OECD Economies
Figure 4
Note: Calculated using moving nominal GDP weights, based on national GDP at purchasing power parities.
Source: OECD Economic Outlook 90 database.
%
%
Contribution to annualized quarterly world real GDP growth
8
2
4
0
6
8
2
4
0
-2
-6
-8
-4
-2
-6
-8
-4
6
2006 2007 2008 2009 2010 2011 2012 2013
OECD Non-OECD

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Seeking Growth by Expanding Globally
With mature markets such as the U.S. and
the UK expected to grow slower,6
competition
has intensified – putting margins under pres-
sure. The need to grow the top line is leading U.S.
CG companies to tap opportunities globally. This
shift is clear from U.S. CG exports, which doubled
from US$40.3 billion in 2005 to US$80.3 billion in
2011.7
Emerging markets such as Brazil, India and
China are expected to drive global GDP growth.
In fact, the Organization for Economic Coop-
eration and Development (OECD) estimates that
these countries will account for 75% of the global
economic growth between 2012 and 2013 (see
Figure 4, previous page).8
Rising Costs and Complexity in Operations
Energy and commodity input costs for CG
companies are rising. Weak economic conditions
and volatile weather are undermining essential
global commodity supply chains. Water, power
and labor shortages are also expected to increase
the cost of products. Streamlining manufacturing
operations and containing energy costs, which
account for 3% to 8% of total production costs,
is crucial for CG companies that want to improve
profitability.9
The planned expansion into global
markets serving diverse customer segments
with customized products is expected to result in
unprecedented complexity in the supply chains
that support them (see Figure 5).
Demographics and the Rise of the Digital
Consumer
In the U.S., baby boomers are expected to account
for 40% of spending, while owning 60% of the
nation’s wealth, by 2015.10
However, the 50-million
strong, digitally-savvy mil-
lennials segment will consti-
tute the biggest percentage
of the U.S. population in the
years to come. CG companies
should therefore prepare to
deal with consumers who
are comfortable with digital
and those who are not.
Rapid innovations in tech-
nology and social interac-
tions have given rise to the
digital consumer, who has different expectations
and demands. Today, mobility and 24/7 social
connectivity is allowing consumers to conduct a
large part of their shopping over smartphones,
the Internet and through social media, bring-
ing about mobile commerce, or m-commerce.
Value-conscious consumers are turning to digital
media and tools that reduce their shopping bills.
The 50-million
strong, digitally-
savvy millennials
segment will
constitute the
biggest percentage
of the U.S.
population in the
years to come.
Drivers of Complexity in the Consumer Goods Supply Chain
3%
24%
28%
30%
34%
35%
38%
48%
49%
50%
51%
51%
51%
65%
72%
Other
Mergers and acquisitions
Outsourcing to third parties
New competitors in market(s)
Compliance with government and trading partner mandates
Distributed manufacturing operations and supporting capabilities
Emerging markets
Talent
Pace of new product introduction and innovation
Globalization of supply chain
Managing supplier risk
Increasing supply chain risk (economic, geopolitical, environmental)
Increasing number of locations (customers, suppliers, internal operations)
Product proliferation or variance (stockkeeping
units/SKUs, excess product variant configurations)
Customer demands, expectations and needs
Figure 5
Source: Technology Trends Report 2012, Consumer Goods Technology and Gartner

cognizant reports 6
(researching products, making use of coupons,
the Internet and online deal sites) as an integral
part of their money-saving efforts (see Figure 6).13
In 2012 alone, consumers saved US$3.7 billion
using the 305 billion coupons distributed by CG
marketers.14
Putting the SMAC Stack to Work
The stack of social media, mobile, analytics and
cloud technologies (SMAC Stack) can help CG
companies in their efforts to react and stay ahead
of ever-changing consumer behavior by improv-
ing their operational metrics and thus building
competitive advantage.
Strategic Shifts Required to Survive and
Compete
To survive in this highly competitive and
fast-changing business environment, CG com-
panies must fast-track a shift in strategy, and
overhaul their operating structures to be more
nimble and responsive. A key pillar for companies
treading such a path is an IT function that pro-
vides the necessary tools and technologies for
competing in an increasingly digital world. The
SMAC Stack of technologies is ideally suited to
serve CG companies in such a scenario. However,
to reap its full benefits, companies should deploy
them as an integrated stack. This can result in a
multiplier effect (e.g., mobile inputs driving real-
time analytics) and serve as a foundation for
breakthrough results in business performance
(For more insights, see our white paper “Don’t
Get SMACked”).
An IRI MarketPulse report says that newer gen-
erations – those that are even more tech savvy
than millennials – will increasingly leverage the
Internet to seek deals and information on prod-
ucts they want to buy. The report further states
that the number of channels visited by shoppers
will continue to decrease to be limited to those
that offer them the best value.11
Business Models Embrace Digital
The forces of technology are rapidly changing the
contours of the CG industry landscape. The digi-
tally-enabled world is driving businesses to pro-
vide seamless service to customers across regions,
time zones and business channels. CG companies
need to examine how they
can rewire their business
models to adapt to the new
digital realities of the mar-
kets they operate in.
Consumer preference for
e-shopping is now influenc-
ing the CG industry’s online
strategy. Nielsen reports
that online sales are grow-
ing at a CAGR of 25%, and
estimates that by 2015 they will contribute 5% of
total CG sales – up from the 2% two years ago.12
According to the latest IRI MarketPulse Survey,
more than two-thirds (69%) of consumers are
making shopping lists to carefully plan their gro-
cery shopping trips and save money. The survey
adds that consumers have accepted digital media
CG companies need
to examine how they
can rewire their
business models to
adapt to the new
digital realities of
the markets they
operate in.
How Consumers Save Money
I visit online deal sites, such as
Woot.com and Groupon
I research products on Web sites
I download coupons from couponing
sites, such as SmartSource
I download coupons from
retailer Web sites
I download coupons from
manufacturer Web sites
Digital Media Usage
(% of Shoppers - Top 2 Box)
21%
24%
31%
35%
35%
21%
24%
33%
35%
42%
19%
23%
26%
29%
40%
0% 10% 20% 30% 40% 50%
Q1 2013
Q1 2012
Q2 2011*
Figure 6
* Not Asked in Q1 2011
Response base: n= 2000 for each of the MarketPulse Surveys (Q1 2013, Q1 2012 and Q2 2011)
Source: IRI MarketPulse Survey, Q1 2011 - Q1 2013

cognizant reports 7
Consumer goods companies have relatively less
physical exposure to their customers since retail-
ers are, most often, the endpoint in the value
chain. Also, retailers have a head start in the
adoption of social media. Having Web stores and
digital touchpoints – such as a presence on social
media networks and mobile apps that allow con-
sumers to research, shop and share feedback on
products – certainly helps. However, moving in this
direction requires CG companies to rethink their
IT strategy – focusing on leveraging new technol-
ogies to not only reduce costs but also create new
business capabilities. It is also essential for these
businesses to manage and make effective use
of the significant volume of social and customer
data that is generated by customers using social
media networks and mobile devices during their
shopping expeditions. This calls for marketing
and IT departments to collaborate seamlessly in
order to deliver differentiable and valuable digital
experiences to customers and gain sustainable
competitive advantage. (For additional insights,
read “Time for Consumer Goods Companies to
Rethink Digital Marketing”.)
Using the SMAC Stack to Engage Customers
and Drive Sales
For CG companies, the game has changed – from
solely selling products to courting, engaging and
converting customers into product advocates.
As customers increasingly turn to digital chan-
nels, companies must follow the same path to
interact and influence them. Companies can start
by deploying strategies that complement their
traditional marketing efforts and by identifying
which digital touchpoints are the most effective.
It is here that social media, mobile, analytics and
cloud technologies play a major role. Some points
to consider:
• Use social media to better engage
customers and drive sales: According to a
Bain report, companies noted that custom-
ers who engaged with them over social media
spent 20% to 40% more compared to those
who did not.15
Similarly, McKinsey points out
that a majority of consumers rely on referrals
and look to user reviews when making their
purchase decisions.16
Cost savings is another
area where social media performs better than
traditional media. Social media lowers the cost
of marketing, enables targeted marketing,
provides data to mine for insights and is a more
effective customer retention tool. With many
customers using social media for longer peri-
ods of time, daily, it is a source of unfiltered,
direct feedback on products and on customer
needs (see Figure 7).
CG companies can combine analytics and
social media data to gain actionable insights
from customers’ social interactions. These pro-
vide key information about consumer needs
and preferences, which can be used to inno-
vate and develop new product lines specifically
for certain customer segments. For example,
Unilever partnered with London-based Face
Co-creation and its online community to
develop Axe Twist, a fragrance that changes
throughout the day.)17
Similarly, Frito-Lay used
social media to solicit new flavors for its potato
chips that are tailored to local tastes.18
Benefit
8%
23%
28%
48%
84%
88%
Reduction of returns
Improvements in contact center operations
Lead generation
Additional sales revenue
Brand protection
Consumer insights
Figure 7
Note: Multiple Responses Permitted
Source: IDC Manufacturing Insights and Consumer Goods Technology, 2012
Expected Benefits from Social Media Investments

cognizant reports 8
• Leverage mobility to market to millions of
unique customers: Mobility is a powerful
sales channel for consumer-facing businesses.
Today, more and more people are relying on
smartphones as their primary communica-
tion, entertainment and infotainment device.
Companies are finding that it is more effi-
cient to send personalized offers and product
recommendations over mobile phones to cus-
tomers when they are in stores. This is impor-
tant, given the fragmented media landscape.
Also, according to published reports, con-
sumers are more open to receiving targeted
messages from trusted retailers.
Marketers are finding that they no longer have
unique markets, but customers in the billions,
with specific needs and expectations. Using
social media and mobile devices, CG compa-
nies can target these niche markets and con-
sumer segments with customized products.
The pervasiveness of mobility and connectivity
is invaluable, as it allows companies to keep in
touch with customers anytime and anywhere.
For instance, companies can leverage the
in-store purchase behavior of a consumer
(who picks up and scans a package of cheese in
a grocery store) to send contextually-relevant
messages (recommending a cracker that goes
well with the cheese.)
• Apply advanced analytics to engage
with the right customer at a lower cost
of interaction: Rapidly shifting consumer
demographics create unique challenges for
CG companies in developing and delivering
products. In such a scenario, companies can
use advanced analytics to accurately segment
markets using the significant amount of con-
sumer data that flows through their systems of
record and engagement (i.e., social platforms).
The ability of CG companies to fine-tune their
promotions and pricing, and identify poten-
tial markets and consumer segments, will
be a critical factor in building and sustaining
competitive advantage. Analytics is the right
fit for companies wanting to gain such an
advantage. With so much information flowing
throughout the organization, analytical tools
can help decision makers separate important
data signals from “noise.” Similarly, robust
analytical capabilities are valuable tools for
reducing the complexity of dealing with diverse
markets and unique consumer segments.
Powerful analytical capabilities can help
companies enhance awareness of their brands
by engaging the right customer at the right
place with the right product. These tech-
nologies can also help streamline marketing
activities and better measure ROI by allow-
ing CG companies to analyze the performance
metrics of marketing initiatives, track con-
version rates of customers, and help opti-
mize spending on leads by moving from pay-
per-click to pay-per-leads. Titan Eye, for
example, uses analytics to understand cus-
tomer preferences and segment them accord-
ingly to provide a targeted range of products
(e.g., a city with a higher density of college
students preferred fancy designer lenses
compared with another city with more senior
citizens). Further, it rolled out online eye
testing (which proved to be a phenomenal
success) using Facebook after finding that a
large percentage of Titan Eye customers were
between the ages of 12 and 30, and were most
active on social media.19
• Deploy cloud technologies to cut market-
ing and related operational costs: Functional
areas such as marketing can leverage on-
demand cloud-based technologies to reduce
the cost of marketing campaigns through pay-
per-use pricing models, while reaching out
to diverse customer segments. These tools
also allow them to develop, test and measure
the effectiveness of campaigns easily at sig-
nificantly lower costs. Software as a service
(SaaS) and other cloud models help companies
with global operations to reduce technology
costs by optimizing, simplifying and increas-
ing the agility of their IT operations. They also
enable companies to easily afford best-in-class
computing capabilities.
Cloud technologies, which are finding increas-
ing acceptance in many industries, can also
improve CG companies’ global operations
while significantly optimizing infrastructure,
support and collaboration costs. General
Mills, for example, used a cloud platform to
launch an e-commerce storefront to bring its
gluten-free product offerings to the market
at half the cost and time compared with con-
ventional IT approaches. In another case,
Chiquita Brands International deployed a
cloud-based HR system for 26,000 employ-
ees spread across 42 countries and achieved

cognizant reports 9
30% savings in upfront costs compared with
traditional on-premise ERP systems.20
Driving Future Growth by Transforming
Business Models
Companies that continue to transform their
business models to better serve the ever-evolv-
ing digital consumer are better positioned for
success. In its predictions for 2012, IDC Manufac-
turing Insights expects IT organizations to make
foundational investments in a master IT model
that holistically embraces SMAC technologies to
deliver more business value and better IT produc-
tivity (see Figure 8, next page).23
As noted in our
earlier “Don’t Get SMACked“ white paper,24
areas
that have the most potential for CG companies to
implement and benefit from the SMAC Stack are:
Quick Take
How Analytics and Mobility Can Drive Operational Efficiency, Productivity
The top 50 CG companies in the U.S. have been unable to reduce the cost of their operations, which
have continued to grow in tandem with revenues. Similarly, net profit margins have remained at the
same level over the past five years. Companies expanding into global markets are further burdened
by regional demographic diversity and complex supply chains. Improving operational efficiencies and
employee productivity is therefore an imperative for CG companies, in our view.
Solutions such as demand signal repositories combined with analytics help companies use downstream
data to optimize key parameters such as cycle-time reduction, on-shelf availability of products and
waste reduction initiatives. Demand-driven companies reap benefits that go beyond managing inventory
to include stronger relationships with retailers, new product introductions and improved promotional
capabilities. Demand-driven businesses function better than others in reducing supply chain costs, in
perfect order performance and in managing inventory.
According to Boston Consulting Group research, companies that use advanced demand-driven
supply chains can reduce the inventory they carry by 33%, achieve 20% improvement in their delivery
performance and significantly reduce their supply chain costs.21
• Analytics improve operational efficiency: Among the future success factors will be the capability of
CG companies to serve demand rather than just build capacity to meet the demand. It is imperative,
therefore, for companies to create scalable capabilities that flex with changing demand rather than
invest purely in production capacities. Companies desirous of having such capability need exceptional
data management tools and technologies, such as analytics that can allow them to glean insights
from data gathered from mobile and social platforms in real time. Efficient and nimble supply chains
can provide significant opportunities for competitive advantage. Given the advancements in analyt-
ics, it is possible for companies to optimize and more efficiently run their complex supply chains.
There is an increasing focus to continuously reduce operational costs to deal with resource con-
straints and rising inputs costs. Here again, analytics can be deployed to identify inefficiencies.
• Mobility enhances employee productivity: CG companies can tap into mobile capabilities to improve
employee productivity by enabling workers to collaborate and work even while on the move. Employ-
ees who are “mobile“ can use their own devices to stay connected to their teams, peers and custom-
ers. Mobility can help companies bridge visibility gaps and improve employee efficiency and effective-
ness by better managing resources — both people and assets — when there is less visibility or they are
on the move. This approach could allow an analyst or field sales executive to act on insights rather
than spending three-fourths of their time on data capture and dissemination. It could also improve
operational excellence by proactively anticipating problems and opportunities by making critical data
available in real time.22
This is especially applicable to employees working in retail merchandising,
field service, warehouse operations, sales and marketing.

cognizant reports 10
• The customer interface: Keep customers
engaged through social media and mobile
devices in real time and influence their
behavior on their path to purchase.
• The partner interface: As customers increas-
ingly engage and interact with CG businesses
over digital mediums, these companies can
collect important information from custom-
ers regarding their preferences and choices in
developing new products.
• The machine interface: Certain categories of
consumer goods (e.g., refrigerators, air condi-
tioners) enabled with connectivity technolo-
gies such as Bluetooth can provide feedback
on the machine’s usage and performance
to both the manufacturer, who can use the
information to improve the product, and the
user, who can use it to understand her usage
of the product. Consider a machine that can
share critical performance data in real time
with appropriate service engineers, who can
fix issues as they arise to help ensure optimal
machine performance.
• The employee interface: The SMAC Stack,
when integrated, allows employees to com-
municate and collaborate from anywhere and
at any time, thus helping to improve their
productivity.
Resource constraints and climate impacts are
only expected to grow — driving consumer goods
companies to center their growth strategies on
sustainability. These businesses need to focus
on making product lines cheaper to produce and
sustain. They also need to effectively engage
customers in supporting sustainable products.
Driving such initiatives successfully will hinge
upon companies’ ability to spot the right trends,
preferences and insights from the consumer data
that is now available.
A report from EKN Research and Consumer Goods
Technology says that among manufacturers with
plans to run big data projects, 64% intend to do
so in the next two years. Supply chain, customer
development and marketing are the top focus
areas.25
Undoubtedly, efficient data management
will be a key driver of competitive advantage for
companies in the future.
The confluence of big data, social media, mobiles,
analytics and cloud can help companies deal with
the uncertain economic environment, alleviate
cost pressures, improve operational efficien-
cies and drive growth. As competition intensi-
fies, companies with the skills to better segment
customers, glean more granular insights and
intelligence from customer data, personalize
messaging and products, and develop efficient,
effective promotional campaigns can gain an
edge over the competition.
IT Investment Priorities of Consumer Products Manufacturers
Figure 8
Note: Respondents were asked to rank the emerging technology areas on a scale of 1 to 5, with 1 being not
important and 5 being most important.
n=355
Source: IDC Manufacturing insights' Supply Chain Survey, 2012
Emerging Technology Area Mean Score
Big data/Analytics 3.6
Mobility 3.3
Cloud computing/Software-as-a-service 3.0
Social business tools 2.9

Footnotes
1
A Demand Signal Repository aggregates point-of-sales data, which after cleansing and integrating
with internal and market research data can help companies to identify what’s selling, where, when
and how.
2
According to Forrester, the number of U.S. consumers shopping online will reach 192 million by 2016,
a 15% increase from 167 million in 2012. It also forecasts that e-retail share of total retail sales will
touch 9% by 2016 up from 7% in 2012. “E-retail spending to increase 62% by 2016.” Internet Retailer,
February, 2012. http://www.internetretailer.com/2012/02/27/e-retail-spending-increase-45-2016
3
“Merchandising Trends: Supporting the Value Proposition.” IRI Group, 2013. http://www.foodinstitute.
com/iri/T&TJan2013.pdf
4
The list comprises the top companies based on revenues for FY 2012 from each of the sub-categories
of the consumer goods industry in the U.S.
5
“CPG 2011 Year in Review: The Search for Footing in an Evolving Marketplace.” IRI Group, 2012.
http://www.foodinstitute.com/iri/T&TFeb2012.pdf
6
A report published in 2013 by Economist Intelligence Unit and Mintel says that total spending in the
five emerging markets (China, India, Mexico, South Africa and Turkey) is expected to rise by between
7.7% and 15.2% a year, on average, in 2013-16, while the spending growth in the U.S. and UK will
average 4.5% and3.6% a year, respectively. http://www.asia.udp.cl/Informes/2013/EIU_Mintel_
Consumer_report_Jan2013.pdf
7
“2012 Financial Performance Report – Profitable Growth: Driving the Demand Chain.” Grocery Manu-
facturers Association and PricewaterhouseCoopers, 2012. http://www.gmaonline.org/file-manager/
Collaborating_with_Retailers/Financial_Performance_2012.pdf
8
“OECD Economic Outlook, Vol. 2011/2.” OECD Publishing, 2011. http://dx.doi.org/10.1787/eco_
outlook-v2011-2-en
9
“Sustainable Energy for All: Opportunities for the Consumer Packaged Goods Industry.” United Nations
Global Impact and Accenture, 2012. http://www.unglobalcompact.org/docs/issues_doc/Environment/
SEFA/4SEFA_CG.pdf
10
“Consumer 2020: Reading the Signs.” Deloitte, 2011. http://www.deloitte.com/assets/Dcom-Global/
Local Assets/Documents/Consumer Business/8664A_Consumer2020_sg8.pdf
11
“2012 CPG Year in Review: Finding the New Normal.” IRI Group, February, 2013. http://www.foodinsti-
tute.com/iri/T&TFeb2013.pdf
12
“U.S. Grocery Shopper Trends 2012.” Food Marketing Institute, 2012. http://www.icn-net.com/
docs/12086_FMIN_Trends2012_v5.pdf
13
“MarketPulse: Key Trends – Tracking the Pulse of CPG.,” Information Resources Inc., May, 2013.
http://www.iriworldwide.com/Portals/0/articlepdfs/MarketPulseKeyTrendsQ12011thruQ12013.pdf
14
“CPG Marketers Distributed 305 Billion Coupons in ’12, Flat From ’11.” Marketing Charts, January, 2013.
http://www.marketingcharts.com/wp/direct/cpg-marketers-distributed-305-billion-coupons-in-12-flat-
from-11-26532/
15
“Putting Social Media to Work.” Bain & Company, September, 2011. http://www.bain.com/publications/
articles/putting-social-media-to-work.aspx
16
“The Decade Ahead: Trends that will shape the consumer goods industry.” McKinsey & Company,
February, 2011. http://csi.mckinsey.com/Knowledge_by_topic/Consumer_and_shopper_insights/dec-
adeahead.aspx

17
“Why Axe Bet on Consumers for Global Twist Launch.” Advertising Age, February, 2010. http://adage.
com/article/news/axe-fans-evince-unexpected-subtlety-twist-launch/142270/
18
“Social Media Are Giving a Voice to Taste Buds.” The New York Times, July, 2012. http://www.nytimes.
com/2012/07/31/technology/facebook-twitter-and-foursquare-as-corporate-focus-groups.html
19
“Right Analytics Can Help Retailers Improve Sales.” CXO Today, May, 2013. http://www.cxotoday.com/
story/retailers-can-gain-by-doing-analytics-right/
20
“Rethinking the role of IT for consumer packaged goods (CPG) companies.” Deloitte, 2012. http://www.
deloitte.com/assets/Dcom-Vietnam/Local%20Assets/Documents/Industries/Consumer%20Busi-
ness/Rethinking%20the%20role%20of%20IT%20for%20CPG%20companies.pdf
21
John Budd, Claudio Knizek, and Robert Tevelson, “The Demand-Driven Supply Chain:
Making It Work and Delivering Results.” BCG Perspectives, May, 2012. https://www.bcgperspectives.
com/content/articles/supply_chain_management_sourcing_procurement_demand_driven_supply_
chain/
22
“Mobility in Consumer Products.” IDC, July, 2012. http://www.scmr.com/images/site/IDC_Mobility_
White_Paper.pdf
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“IDC’s Top 10 Manufacturing Predictions for 2012.” Consumer Goods Technology, December, 2011.
http://consumergoods.edgl.com/trends/IDC-s-Top-10-Manufacturing-Predictions-for-201277542
24
By Malcolm Frank, “Don’t Get SMACked: How Social, Mobile, Analytics and Cloud Technologies are
Reshaping the Enterprise.” Cognizant Technology Solutions. November, 2012. http://www.cognizant.
com/Futureofwork/Documents/dont-get-smacked.pdf
25
“Big Data in Consumer Goods.” Consumer Goods Technology and EKN Research, 2012. http://consum-
ergoods.edgl.com/research/Big-Data-in-Consumer-Goods---Fall-201283905
References
• “Optimizing Marketing Partner Performance and Value in a Digital World.” CMO Council, 2012. http://
www.cmocouncil.org/images/uploads/pdf/219.pdf
• “Tech Trends 2012.” Consumer Goods Technology, 2012. http://consumergoods.edgl.com/research/
2012-Tech-Trends-Report82531
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com/assets/Dcom-Switzerland/Local Assets/Documents/EN/Consumer Business/Consumer pack-
aged goods/ch_en_global_powers_of_consumer_products_2012.pdf
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egy_how_consumer_companies_can_win_back_the_us_market/
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article/00130?gko=51a51
• “Mobility in Consumer Products.” IDC Manufacturing Insights, July, 2012. http://www.scmr.com/
images/site/IDC_Mobility_White_Paper.pdf

About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process
outsourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered
in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep
industry and business process expertise, and a global, collaborative workforce that embodies the future of work.
With over 50 delivery centers worldwide and approximately 162,700 employees as of March 31, 2013, Cognizant is a
member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500, and is ranked among the
top performing and fastest growing companies in the world.
Visit us online at www.cognizant.com for more information.
World Headquarters
500 Frank W. Burr Blvd.
Teaneck, NJ 07666 USA
Phone: +1 201 801 0233
Fax: +1 201 801 0243
Toll Free: +1 888 937 3277
Email: inquiry@cognizant.com
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone: +44 (0) 207 297 7600
Fax: +44 (0) 207 121 0102
Email: infouk@cognizant.com
India Operations Headquarters
#5/535, Old Mahabalipuram Road
Okkiyam Pettai, Thoraipakkam
Chennai, 600 096 India
Phone: +91 (0) 44 4209 6000
Fax: +91 (0) 44 4209 6060
Email: inquiryindia@cognizant.com
© Copyright 2013, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is
subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.
Credits
Author
Aala Santhosh Reddy, Senior Research Associate, Cognizant Research Center
Subject Matter Experts
Johan Sauer, Assistant Vice-President, Cognizant Business Consulting, Consumer Goods Practice
Design
Harleen Bhatia, Design Team Lead
Chiranjeevi Manthri, Designer
• “CPG Lags in Social Media Investments.” Consumer Goods Technology, July, 2012. http://consumer-
goods.edgl.com/trends/CPG-Lags-in-Social-Media-Investments-81270
• “U.S. Consumer Goods: The Case for Putting Analytics at the Core.” Cognizant Technology Solutions.
February, 2012. http://www.cognizant.com/InsightsWhitepapers/US-Consumer-Goods-The-Case-for-
Putting-Analytics-at-the-Core.pdf
• “The Emergence of The Digital Marketing Service Provider.” Forrester Research, Inc., January, 2012.
http://www.forrester.com/The+Emergence+Of+The+Digital+Marketing+Service+Provider/fulltext/-
/E-RES61168
• “IDC’s Top 10 Manufacturing Predictions for 2012.” Consumer Goods Technology, December, 2011.
http://consumergoods.edgl.com/trends/IDC-s-Top-10-Manufacturing-Predictions-for-201277542

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