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Wednesday, July 6, 2022

FMCG’s experience design problem

How a person experiences a product matters. It determines how likely they are to buy it again and recommend it to others. So, why is it that brands almost universally fail to design this experience, asks Jos Harrison?

Think of the last few times you tried a different consumer product in the supermarket or online. Probably you were wandering or scrolling down the aisle, it caught your eye, you remembered seeing the ad, maybe it was on offer, and so you thought you’d give it a go. Then you got home, used it, and promptly forgot all about it.
It’s an all too familiar story, and it’s one that ought to be top of mind for every CEO of an FMCG firm. With very few exceptions, the way people experience our products is mediocre and forgettable. This means that those products have neither the social nor the commercial impact we want.
This issue is given even greater impetus by the events of Spring 2020. COVID-19 and its successors will change how we live. It will move more purchases online, it will mean we spend more time in home with products, and it will put even greater emphasis on sustainable disposal.
This will significantly accelerate an already growing need for companies to design the way people experience their products. We have to look beyond our obsession with the moment of purchase, past eye-catching aesthetics and quarterly sales figures, to design experiences that people will love, and which will lead to sustainable long-term business growth.Social and commercial impact
It seems obvious that a person’s experience of a product matters. Yet in most cases, FMCG products deliver a solution to an immediate problem or task, but that’s where the experience ends. What happens after the thirst is slaked, the surface is cleaned, the chocolate craving is satisfied, the dishes are washed, and so on? The brands that build a fuller experience beyond those purely functional elements are those that have genuine social and commercial impact.

The Design Management Institute tracked the financial performance of companies that put design at the core of how they operate. In the 10 years to 2015 those companies outperformed the S&P500 by 218 per cent. P&G and Coca-Cola are the only FMCG firms in that Index. More recently, the McKinsey Design Index showed a direct correlation between holistic design integration into businesses and huge gains in net revenue and shareholder returns. Even more specifically, research from the Aberdeen Group revealed that businesses that place emphasis on optimising the customer journey gain 50 per cent more return on marketing investments than those that don’t, they gain 250 per cent more revenue from customer referrals, and their rate of cross-sell and upsell is 13 times faster.
Furthermore, FMCG corporates face a new breed of digitally-native start-ups who are delivering an ‘end-to-end’ service direct to their customers, fitting frictionlessly into people’s lives – and crucially, providing a relevant value exchange. These firms are taking more and more market share from the established brands, and the only way the larger players can take it back is to start designing their customer experience.

Moment of sale
Given the impact this could have, it seems remarkable that brands in general pay so little attention to customer experience. To some extent this is born of a residual assumption that there is a tiny in-store window of purchase opportunity. This assumption has led FMCG to focus almost exclusively on the moment of sale to the detriment of every other aspect of the brand experience. Too many brands have become stuck here, incessantly trying to persuade people to buy products they don’t need, and that they won’t enjoy. It’s very telling that our industry insists on calling people ‘consumers’, as if they have no other reason to exist.
At the same time, the view has taken hold that huge swathes of FMCG are ‘low-interest categories’. This is simply wrong. People spend their hard-earned cash on these products, and they deserve that we in return instil our brands, products and experiences with love. Many don’t right now, and it shows.

The new consumers
Everyone knows that the world has changed since the majority of big FMCG brands were born. People now expect far more from brands. Whether they explicitly articulate it that way or not, they demand coherent experiences.
Indeed, people tend to think less of products, and more of life-related tasks and activities. So, cleaning a surface isn’t about just cleaning that surface, it’s about protecting my family from germs. The first part of that is a product that is safe around my family, but then I want advance warning of things like flu outbreaks, and I want my kids to be protected from germs at school as much as they are at home – does my cleaning brand do that?
The reasons behind FMCG’s experience design problem are many and complex, but perhaps the main driver is simply inertia. After all, designing experiences is incredibly hard work. It takes empathy and design integration to all parts of the organisation, which must be rooted in an authentic and compelling brand purpose, then it takes investment and infrastructure, and finally it takes ongoing commitment to the brand experience. For many organisations, it’s simpler to stick where they are.

Return on investment
Yet, this is becoming less and less a viable option. Look at the way brands like Innocent and Oatly are transforming their categories. Oatly is a super smart brand with a personality, and a clear understanding of where it fits into people’s lives. Innocent has always provided something simple, friendly and convenient, and it’s provided this experience not only in the product but in its marketing and delivery. A genuinely innovative new product pipeline is evidence of the importance it places on fitting into people’s lives. Both brands have been designed with their end-user experience at their core, and both are taking market share from established players. Corporates are taking notice and adapting. In early 2019 Reckitt Benckiser launched Neuriva, a brain-health supplement, in North America. It was designed with total brand experience in mind, and at every point at which people engage with the brand – online, social media, in-store, e-commerce, in-use, post-use, recycling, reviews and so on – it offers a relevant and meaningful value-exchange. Within eight weeks of launch it was already the number two brand in its category – and it is now contributing 50 per cent category growth.
Indeed, that is the key reason for brands to invest in experience design: it delivers a return on that investment. A great experience for your user translates into a much higher likelihood of repurchase and that holy grail of marketing, advocacy.

Long term shift
This is not some transient trend. This is the future, and it’s a future brought sharply into focus by the COVID-19 pandemic. That accelerates the shift towards e-commerce, and requires us to empathise with the way people experience the new shopping moment of truth.
It is advancing the shift to more time spent at home, so we need to think closely about the way, the time and the mindset in which people experience our products and the value that experience offers them. How do our products enable stress-free work, or keep children occupied, or deliver greater value for money to those who now find themselves unable to work?
And finally, spending more time at home may involve us using more product and so generating more waste with fewer people available to collect and process that waste. This strengthens the emphasis on sustainability of product and packaging.
These are all questions FMCG brands need to ask themselves today to remain relevant tomorrow. Experience design can no longer remain an issue solely for service-oriented brands and consumer-electronics. More and more FMCG players, both start-up and corporate, are engaging with it, and any brand that doesn’t deliver will fall by the wayside in the next few years.

Global Design Strategy Director at Reckitt Benckiser,
Has spent the last 20 years leading design thinking in all areas of the creative industry, always with a focus on the end-user and an agenda to drive sustainable business practices.

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