NEW YORK, Sept. 13, 2011 /PRNewswire/ -- "As companies are expanding further into global markets, they are facing a new set of realities about consumer behavior," says Alison Winter, co-founder and co-chair of WomenCorporateDirectors (WCD) and director of Nordstrom, Inc. "Traditional ideas about demographics, marketing, and sales channels have been up-ended – and boards must stay abreast of these shifts to gauge corporate strategy."
Trends in the global consumer landscape – and how board directors should respond to them – was a topic of this spring's Global Institute hosted by WCD, an organization of more than 1,000 women board members in 17 countries around the world. In a panel hosted by Diane Brady, Senior Editor and Content Chief at Bloomberg Businessweek, participants discussed challenges and opportunities facing businesses seeking to reach global consumers.
"Several trends are emerging as game changers for companies," says Ms. Winter. These include:
- Brand migration – in reverse. Whereas most brands used to tend to spread from wealthy nations to poorer, emerging markets, some brands don't follow this traditional route. Carla Schmitzberger, head of the Havaianas division at Alpargatas, described the trajectory of the popular flip-flop sandals from Brazil: "We're different from many brands in that we were strong originally in a BRIC country, and then moved to the rest of the world. The biggest change is that we are evolving from a poorer people's product in Brazil to become a popular item in the Northern Hemisphere, where it is worn by the very wealthy. But our success is that we've been able to stick with our roots – being affordable to poorer people – while getting high-income consumers to buy the sandals as well."
- The disappearance of retail "channels." Companies can no longer separate their online and bricks-and-mortar channels, said Susan Chambers, Executive Vice President, Global People Division for Walmart. In discussing how technology is becoming more and more of a disruptive influence for retailing, and helping to create a "monochannel," she explained: "We have customers who are shopping at home – getting information and checking out prices. They then come in with a mobile app, and they scan an item in the store. They're immediately able to get the product information and pricing information and make decisions right on the spot, bringing mobile and social media applications into the actual store."
- Consumerization driving business buys. "The biggest trend that we're seeing is the consumerization of IT," says Linda Zecher, Corporate Vice President, Worldwide Public Sector for Microsoft. "What consumers are using at home is now going into the enterprise, and that's particularly important with the younger generation. If you go into a Best Buy or Walmart on a Saturday morning, you'll see parents with young children, and it's the children who are directing what kind of IT they would like to have in the home. Then, on Monday morning, you'll have the mother or father come into work and say 'Hey, we should have this kind of technology here.' The younger generation is driving their parents into new ideas."
- Borderless consumers – to a point. "Consumers are increasingly becoming borderless – geographies matter less and less," said Kalpana Raina, Managing Partner of 252 Solutions, LLC and director at RealNetworks, Inc., John Wiley & Sons, and Information Services Group. "Even though tax regimes matter, and trade pacts matter, geographies are no longer the same impediments that they used to be. But one of the things that a lot of people forget is that you still have to pay a lot of attention to local consumption, local tastes, and local buying power."
- Remerchandising according to paycheck. Both Walmart and Havaianas are responding to the realities of what consumers can afford. "We've learned to repackage," says Ms. Chambers. "Instead of, say, having a package of two dozen diapers, we may need to sell in much smaller quantities. Even though a larger amount is a better value, the consumer may be able to afford only one or two at a time. We are learning how to remerchandise the store based on where we are relative to the paycheck." At the same time, Havaianas is seeking out customers at all ends of the income spectrum – from its more traditional, low-income buyers as it expands into India to Swarovski-embellished sandals for a more affluent customer. "You can extend your product line so that it can fit the different price points for different people," says Ms. Schmitzberger.
- Tech spending defying price. While software providers like Microsoft also work to provide less expensive PCs in certain markets, they are finding that consumers upgrade out of these as soon as they can. "Our customers might start out with the lowest end of technology, but they will upgrade it very quickly," says Ms. Zecher. "Even if you go into some of the poorest areas of Indonesia, India, or Africa, you'll see people with the highest-end piece of technology that they can possibly buy."
- Finding consumers outside the traditional sales force model. Educating global consumers can be a vital part of selling products to them, Ms. Zecher says. "If you are selling software in China, for example, you need to cultivate partners and experts there who can help consumers figure out how to use the software. You want to try to build up a channel of partners that have solutions that sit on top of the software to create demand. So you can't just use a traditional sales model that you've always had – going out and selling one product to a few wholesale customers. It takes a whole range of media – including social media – to reach the end consumer."
- Small companies acting big. In a global and online world, it's much easier for a smaller company to seem big, as one's "footprint" today isn't measured by office size. "Today our customers dream in dimensions that were inconceivable in the past," said Camille Kielty, President of Enterprise Sales at UPS. "A small customer today has the capability to think big and, at the same time, compete big. It can partner with logistics companies and bring something to market immediately and without anyone's ever knowing how large or how small they are."
"At the board level, it's important for us to get out to the regions around the world and have board meetings in India or China or another target market," says Ms. Raina. "If your business travels, then your board better travel. And it's not about staying in the hotel and conference rooms – get out, read the local newspapers, watch the local television. Boards need this local intelligence."
For more information about WCD, please contact Davia Temin or Suzanne Oaks of Temin and Company at 212-588-8788 or firstname.lastname@example.org.
About WomenCorporateDirectors (WCD)
WomenCorporateDirectors (WCD) is the only global membership organization and community of women corporate directors, comprised of more than 1,000 members serving on over 1,200 boards in 33 chapters around the world. In this new era of responsibility, WCD is committed not just to good governance, but to governance with global vision. WCD launched is first-ever Global Institute in May 2011 in New York City, where it issued a Call to Action for improving the numbers of women on boards.
WCD's global chapters are located in Arizona, Atlanta, Beijing, Bogota, Boston, Charlotte, Chicago, Dallas/Fort Worth, Delhi, Denmark, Hong Kong, Israel, Johannesburg, Lima, London, Mexico City, Minnesota, Mumbai, New York, Northern California, Northern/Central Europe (Berlin), Paris, Philadelphia, Sao Paulo, Seattle, Shanghai, Singapore, Southern California, South Florida, Switzerland, Tennessee, Toronto, and Washington, D.C. Chapters in Abu Dhabi, Australia, Cairo, Hanoi, Ho Chi Minh City, Houston, Iceland, and Malaysia are in formation.
Our mission is to continue to expand the WCD community through leadership, diversity, education, best practices in corporate governance, and a focus on development and new board placement opportunities. WCD offers local, regional, national, and international forums, providing a platform for turning ideas into action. For more information, visit www.womencorporatedirectors.com.
SOURCE WomenCorporateDirectors (WCD)