Meeting the Customer Challenges of a Shifting Global Retail Market
This is the latest in Lippe Taylor’s Digital Reductionism series. Here, Lippe Taylor president Paul Dyer chats with Johnson & Johnson (J&J) Chief Customer Officer, Chester Twigg.
Check out the full audio of this conversation on our DAMN GOOD BRANDS Podcast, available on Spotify, Apple Podcasts, Stitcher, and everywhere you listen.
Below are some of the most compelling takeaways from this conversation with Chester:
- Follow the science, not the trends. Ingredients go in and out of fashion, both the ones to include (charcoal, jojoba, kale, etc.) and the ones to ban (parabens, gluten, alcohol, etc.). While it’s important for large companies like J&J to acknowledge these trends, their key focus remains based on hard science when deciding whether or not to include or exclude an ingredient.
- Read, read, read. Chester is on a steady diet of one business book a week, which enables him to stay on top of cutting-edge industry knowledge and constantly explore new perspectives--all of which serves his leadership abilities. With resources like Kindle, Audible and Blinkist, there is really no excuse not to be consuming books on a regular basis if you are in a leadership position.
- Simplify. Many companies make the critical error of over-extending their brand’s line of products, thinking it will make life easier for the consumer. It wont. The paradox of choice dictates that too many product options cause consumer overwhelm, which makes them gravitate towards brands with a more streamlined number of SKUs. Simplifying your product line to the essentials is the name of the game because it’s less of a cognitive load for consumers.
- Give your consumers a reason to go into stores. With the prevalence of convenient online delivery options (Jet.com, Amazon, etc.), getting consumers into stores is becoming an increasingly difficult task. Brands need to give consumers a compelling reason to go to stores and this is best accomplished with entertaining and engaging experiences, or “retailtainment” as Chester calls it. VR and AR experiences are very promising towards this end.
Paul Dyer: For people who may not know, how do you describe what a Chief Customer Officer does?
Chester Twigg: In consumer goods, the role tends to be the global head of sales—so I’m responsible for bringing the voice of the customer into the company, defining the sales strategies: how we go to market, the channels to cover, and the customers to win with. And, of course, building the capabilities and skills of the thousands of salespeople that operate across the world.
PD: How do you think about the split priority of your customers: the Walmarts and Tescos versus the consumers they're trying to serve?
CT: What we are trying to do is hit that joint-value-creation sweet spot, which is where the consumer (the end user of our products), the customer (the retailers), and the company (J&J) create value that is bigger than all three put together.
Our focus is figuring out how you bring not just the consumer into the equation, but also the shopper, because the consumer who uses the product isn’t always the person who's buying it in the store or online. And we try to be the experts in how that shopper makes their shopping behavioral decisions, how the retailer can influence them to achieve that, and how we can maximize that sweet spot.
PD: You've been a leader in this space for many years, how have you seen the customers' needs shift over time?
CT: The speed of change is faster than it's ever been before. What we're clearly seeing is that consumer expectations are increasing more than ever before. They want the product right now, at the best price, and delivered to their home--immediate satisfaction.
Retailers and manufacturers are trying to keep up, both in terms of structure and profit. Consumers expect a better product at a better price, with better value, faster. We've got to meet those needs, and we've got to make money doing it as well. So that brings in the intellectual challenge of how you achieve that, which is the fun part of the job.
PD: How do you stay ahead of changing trends in things like ingredients, and make sure that you're actually keeping pace or even setting the pace?
CT: It is an expectation to anticipate those changes and even invent those changes. We want to do things based on science. We need to know that an ingredient is really going to provide our consumer a better outcome. We're in the business of science and technology, and ultimately, better health outcomes for our consumers.
So we don't necessarily follow every trend. We will look at what could perhaps make sense for us to develop a competitive advantage with an ingredient, and then take that on. So we might have to pass on a few that we don't believe are truly sustainable and are just fads rather than real positive trends.
Consumers today are more informed. They want to understand an ingredient’s purpose, and that's the other thing we're seeing, is that purposeful brands are connecting with today's consumers. So I actually think the consumer today is much more well-informed and intelligent, but also not willing to take the manufacturer's word on things. They want to do their research, find out, and be convinced that this is the right thing for them as well.
PD: J&J has a lot of history and a lot of equity in being a science-driven company. Is it still important to get a third-party voice?
CT: We believe in professional endorsement just as much as we always have. We believe that it's great when we not only make sure our product meets quality standards, but is also endorsed by professionals that know best.
Historically, our brands have always been invented through science to meet a consumer’s need, whether it was BAND-AID, one of our very first products that we launched, or Johnson's baby products. We believe that the right professional endorsement is critical to the success of the brands.
PD: With the growth of private labels, we're in an era where you've got direct brands that seem to be a common enemy for large brands like Johnson & Johnson as well as the retail customers that you partner with. Has that impacted the way that you're thinking about your competition?
CT: The challenge remains the same. It's trying to find that sweet spot and create joint value for our consumer, our customers and ourselves. It's getting more challenging. The statistic that I often remind my team about is when I started my career, the consumer goods industry was growing at twice the rate of GDP. In the last decade, it's growing at half the rate of GDP, so getting to that growth is a little bit more difficult than it was in the past. In the meantime, the barriers of entry have come down. Anyone can start a little business. You don't have to pay the listing fees to get into a big retailer; you can create your own website or get onto an ecosystem and sell your product. You can target a few consumers, you don't have to have a big marketing budget. So we and our key customers definitely have that challenge. Growth is less; there are other competitors for that same growth, so we've got to work harder and more creatively to find that growth.
If you have great brands like we do, with deep equity in consumers' minds, the question becomes, how do we leverage that to continue to bring the customer into stores? But that means we've got to target that consumer better, we've got to sharpen our marketing, we've got to better understand what the consumers' needs are. At the end of the day, we're selling products which are not as exciting as what our young consumers are looking for in terms of technology or experiences or the latest iPhone, etc.
PD: So I'm curious what you're thinking about from a data prioritization standpoint, when it comes to getting to consumer insights. How do you think about it?
CT: In the past, consumer companies had more insights on the consumer. And the retailers didn't have a lot, because they were busy operating and running the stores. They didn't have a lot of data systems. Today that has shifted, because of loyalty cards, and a lot more transaction data that the retailers have.
That means the challenge for companies like ours comes down to bringing in the insights on the category, because the retailer's not going to be looking so deeply into the particular categories we sell. They have a lot categories to sell.
So we have to be the experts on what shoppers are doing in the categories in which we operate, so that we can help them build a plan that they would not have built by themselves.
That's where our focus is: "What are consumers doing when they go shopping in our category?" "How are the interactions between the digital world and the real brick-and-mortar world colliding?" “How do you recognize that and reach the consumer when it's most relevant?” We are doing a lot of research to understand that shopper context.
There's a lot of shopper psychology work that exists today. We know that shoppers first deselect before they select, because there's way too much out there. So usually the first thing they do is rule out what's not in their consideration set, and then zero in on what they're really looking for. There's the paradox of choice. More and more, manufacturers and retailers want to bring more items and more variety to the consumer at a time when the consumer's already overwhelmed and is actually looking for someone who will help them make the choice.
PD: What amount of emphasis are you placing on the e-commerce side versus the brick-and-mortar side of your business?
CT: I love the way Alibaba has recently been talking about it. They say, "There is no e-commerce, there is new retail." And new retail is basically what many people would call omnichannel. It may not be the case everywhere, but it will increasingly be the case as more brick-and-mortar retailers go online, and online retailers buy brick-and-mortar stores, whether it's Amazon buying Whole Foods or Alibaba starting their own stores.
Some of the most fascinating brick-and-mortar stores in Shanghai are called Hema, where you can get a product at the store, or you can have it delivered at home in thirty minutes or less. So that's the new retail, where the consumer doesn't think about it as, "I'm online; I'm offline." They're looking at it from, "I want convenience, I want good value and price, and I want it to be seamless." I see it on my phone, and I want to buy it in the store. I should be able to. Equally, if I see it in the store and decide, "Well, I would rather have it delivered at home,” I should be able to do that.
PD: What is a technology you're particularly excited about?
CT: We're quite excited about virtual reality, perhaps even more augmented reality… If you think about it, one of the things you need to do to get a consumer into the store, is to enhance the experience. If I'm going to the store, in the past it was a chore. Now if you want me to go into a store, I need to have something more than just products on shelves from top to bottom that are hard to navigate. I need to have a good experience and something that's a little bit delightful, and “retailtainment” to make it exciting. I think augmented reality, virtual reality, and things like that could enhance that experience without becoming too expensive.
PD: How do we reach consumers and get them into the store to buy something? What do you see as sort of the next wave of how we actually get people in there?
CT: It comes back to good storytelling, right? We know that when you're telling a good story, whether it's digital or not, the consumer is more likely to pay attention. But the challenge is: they're easily distracted, they've got a million things that they can go do. But it's almost like making a speech, you’ve got a short period of time to get this audience hooked, and have them interested in what you’ve got to say, otherwise they're going to go to the distractions that are easily available. I think that's true of our digital marketing, but also of the shopping experience. The good news is, you can experiment a lot and learn. I like the pop-up store approach, where you can test different things with consumers in an environment that you can scale up.
It's really about making sure that my brand story or my proposition is compelling. It's old-fashioned and it's back to our neurological evolution that we are taken in by stories; the question is, how do you make it a compelling story?
PD: Are there any resources you would recommend for aspiring marketing executives?
CT: I think the most important skill is learning agility. When my kids ask me, "What's the most important skill to succeed in the future?” I say, "Just be a lifelong learner."
I'm the Chief Customer Officer, so I've got to know what's going on in that world. I put aside time for learning. Fifteen years ago I had the privilege of attending a Stephen Covey workshop. At that seminar he said, “If you're not reading a business book a week, you're falling behind.” That was a wake-up call for me, but I'm proud to say that I've read a business book a week, ever since, and that's fifteen years.
If I miss a week, then I read two books in a week in which I'm traveling, or I'm on vacation. And it's a business book; it's not a novel. You've got to sharpen the sword, because there's so much new stuff happening. More stuff happened in the last year than in the previous ten.
PD: You've also worked closely with Anthony Rose on the Break the Ceiling, Touch the Sky leadership summit, dedicated to the advancement of women in executive positions. Can you talk about how you got involved with that project and why it's important to you?
CT: Diversity has always been important to me, in particular gender diversity. I worked in sales, which tends to be more male-dominated, particularly in Asia. I hired the first women salespeople in P&G in India… I’m glad to say that because of her, others followed, and today it’s almost 50/50.
Anthony's been a friend for a long time, a colleague back at P&G, and someone I admire greatly for his true commitment to the purpose and to the cause. He gets some of the finest leaders to that summit, and the most important thing is, there's no PowerPoint, there are no slides; there are just people being real, being authentic, talking about their experiences. I've picked up more insights there on how women lead and how women want to be managed and led than almost anywhere else. It truly is a fantastic thing that he does.
PD: What advice you would give to the next generation of leaders?
CT: I'm never quite sure that something is the right approach, just because it worked for me. I can say that the advantage of the path I chose was that you do get out of your comfort zone a lot more. Therefore, you are forced to learn a lot. I think when you create stress, there's a chance to learn. When you relocate and start working in a new environment where you have to understand the culture, different people, that really is a compressed stress challenge, both on the business and the personal front.
I believe that that's a benefit, because you're put under stress and you do learn from it. You should avoid it being too stressful, though. One of the things I tell people is, "Don't take on a new position, a new country and a new company at the same time." I think those three, all together, is probably too much stress. If you're going with the same company, that gives you a level of comfort. If you're going into a new job, but it's in the same company, that's not as pressured. But if you're going to have the trifecta of all three stresses at the same time, that perhaps is too much.
PD: Is there anything else that you think is an interesting topic or trend right now?
CT: One thing that is fascinating to me is the pace of change. We think it's accelerating tremendously, but I went for a college seminar for my son, who's only in the ninth grade, and they're already starting to talk about college. The college counselor said that the research shows that this batch of kids, when they graduate, will have eleven different jobs. Not assignments, but different careers. I don't know if that's true, but even if it's halfway true, that's an extreme pace of change. So I think the pace of change will only accelerate. Observing how the younger generation and others are going to deal with that is going to be fun. I'll be retired, having a beer on the beach somewhere, but watching with a great deal of interest.
PD: Well I guess that reinforces the importance of getting out of your comfort zone and building learning agility as a skill. Chester, thank you so much.
CT: Thank you as well.
