We recently had the opportunity to speak with Vinayak Madappa, a Strategic Advisory Partner for Capgemini Canada. He discussed his duties at Capgemini, his thoughts on the most recent “What Matters to Today’s Consumer” report from Capgemini, potential strategies to help consumers who expect businesses to help them during the difficult times, and ways that businesses can ensure they keep up with the changing demands of customers who want reduced prices.
Vinayak is a Strategic Advisory Partner for Capgemini Canada. He is an experienced leader with more than fifteen years of experience in a variety of progressive leadership roles focused on Advisory and Data and Analytics. He enjoys working with clients across different industries on applied intelligence and helping them realize the tangible value of data-powered enterprises impacting the ecosystem of business operations. Prior to joining Capgemini, Vinayak held positions with PwC and KPMG in Canada, South Africa and India.
When did you start your professional career? What are your responsibilities at Capgemini?
With over 17 years of experience in a variety of leadership roles focused on Advisory, Data and Analytics, I have worked with clients across industries helping them realize the tangible value of data-powered enterprises impacting the ecosystem of business operations.
Since joining the Advisory team at Capgemini in 2021, I’ve been working with my team to enhance and grow Capgemini’s footprint in the Canadian market. Specifically, my role is to identify where the market is headed and position which of our capabilities and solutions we offer to help clients meet their strategic objectives.
Before joining Capgemini, I held positions with PwC and KPMG in Canada, South Africa and India. My original career focus was to be a professional cricket player and I represented my province at the national level before I went into consultancy full-time.
What do you think of the most recent “What Matters to Today’s Consumer” report from Capgemini, which emphasizes the ongoing cost of living crisis?
The report provides a snapshot of the current reality for Canadian consumers. Amid the ongoing COVID-19 pandemic, geopolitical crisis and especially the cost-of-living crisis, consumer spending behaviours have shifted and retailers need to pay attention in order to keep consumers engaged.
Consumers are becoming more sophisticated and nuanced in their purchasing behaviour, shopping with more forethought and cutting back on non-essential and impulse purchases during these challenging times. The report highlights the reality people are facing and showcases the need for businesses to adapt to new consumer behaviours and preferences during the period of economic uncertainty.
We are seeing that average Canadian households are struggling to afford necessities and are looking to companies to play a role in navigating through this difficult time with the likelihood that they will reward the most considerate brands with long-term loyalty and continued business both now and post recovery
We reported that while 68 per cent of Canadians are concerned about their financial situation and 74 per cent expect companies to provide more discounts to help purchase essential items and in doing so, 85% of the consumers will be loyal and reward companies with increased basket sizes and purchases in the future.
Consumers are making adjustments to their purchasing decisions and companies will need to adjust to remain competitive by being innovative in helping reduce cost.
Considering that most consumers expect firms to help them during this challenging time, what do you think are some potential strategies to assist consumers in this regard?
Businesses need to consider the long-term relationship with their customers. As the cost of living continues to rise both consumers and companies will have to make adjustments. Forty-three per cent of Canadian consumers have reduced their overall spending this year. Additionally, 3 in 5 consumers are spending more time looking for deals and discounts online and by shopping at different physical stores.
Firms can retain loyalty by launching cost-saving campaigns to help consumers in the short-term and in return gain long-term favourability. This is supported by the data which shows that 85 per cent of Canadian consumers say they will be more loyal to companies that help them through this difficult time.
We have already seen examples of brands and retailers standing up to support consumers struggling with the cost of living. In 2022, British supermarket chain Waitrose launched the “Super Saver recipe” which offered easy, low-budget meal options to customers. Another UK supermarket Asda reduced the price of over 100 popular items, and Currys, a technology retailer, introduced an exchange program called “Cash for Trash” which allows customers to recycle old technology in exchange for vouchers. These measures are not new. In the 2008 financial crisis, loyalty programs boomed, growing 19% between 2007 and 2009. Canadian businesses can follow suit by introducing similar cost-saving campaigns including loyalty programs, lowering the cost of essential goods, and pinpointing cost-saving items or actions the consumer can take to spend less.
Retail businesses should also consider dramatically reimagining their operational strategy to weather this storm and pass on price benefits to consumers. By identifying new revenue streams, creating new markets, transforming operations, and optimizing costs, businesses can succeed without compromising on overall customer experience. Harnessing technology for intelligent demand planning, inventory management and automated operations can help reduce costs and maintain margins.
How can businesses make sure they keep up with the changing demands of customers who want reduced pricing for the necessities for their families?
Our data shows that the majority of consumers (74%) do expect companies to provide more discounts to help Canadians purchase essential items during this difficult time. While businesses may be wary of reducing costs or making goods more accessible. Those who do will see the long-term benefit. Eighty-one per cent of Canadian consumers have shared that they will purchase more products/services in the future from companies that help them through this difficult time and 85 per cent of Canadian consumers have stated that they will be more loyal to companies that help them through.
What are your thoughts on customers’ demands that businesses give up excess earnings in order to serve society? What are the most important resources that brands need to employ in order to address this issue and meet the demands of their customers?
Retailers have an opportunity to rethink operational strategy for cost reduction, sustainability and experience. Businesses too are grappling with challenges such as increased energy, labour, and transportation costs, yet according to the report, 63 per cent of Canadian consumers say that brands and retailers should offer lower prices for the products their families require. Consumers expect companies to make operational efficiency changes to lower costs. Fifty-six per cent of Canadians expect companies to use technology to lower prices (e.g. replacing staffed check-out counters with self-service payment areas to lower overheads).
This is a moment of opportunity for businesses. The report highlights three key actions that will help brands and retailers to capitalize on opportunities that these evolving trends offer.
First, companies must drive cost reductions by rethinking the way they operate and how the supply chain is organized to ultimately be able to pass on cost savings to consumers. For example, brands and retailers can use technology such as data and analytics, AI and automation in their planning processes to optimize costs.
Second, brands and retailers must identify new revenue and channel growth opportunities. For example, by leveraging the power of social media influencers and expanding into newer channels to reach customers, brands can unlock new revenue streams and growth opportunities. Gen Z shows the highest engagement here, with almost half (48%) discovering new products through online influencers and 32% going on to purchase.
Third, companies must lead with purpose and help consumers through this difficult time to build goodwill and loyalty in the long term. Retailers must empathize with consumer concerns by keeping prices fair and consider how they can reduce their operational costs to be able to pass on cost savings to the customer via promotions, discounts, price freezes, or other means.