Procter & Gamble seeks to meet consumer needs through ‘constructive disruption’
The consumer products goods industry has an excellent opportunity to lead the charge in the battle for consumers hearts and minds as it applies to constructive disruption, the group president of Procter & Gamble’s North American operation told the audience at Groceryshop 2019 in mid-September.
Speaking at the three-day event in Las Vegas, Carolyn Tastad told attendees that now is the time for suppliers and retailers to step up, and how it is very important for her company to be at the forefront of leading this challenge, if for no other reason than constant changes in technology and a more demanding consumer who is asking for it.
“Our world is in a perpetual state of disruption, and the pace of change is accelerating. Digitization, big data and automation are impacting every part of our daily lives,” she told the audience. “Technology is causing us to rethink all aspects of how we work, including our business models, how our brands connect with consumers, and how we engage with our suppliers and retailer partners. The level of disruption we’re facing today can be overwhelming — distracting even.
A big part of the issue are consumers’ expectations, which she said are higher than ever. “They expect everything to be effortless and convenient,” she said. “They want to be able to shop anytime, anywhere, in any way they want. This is especially true for those individuals who grew up holding an iPhone or iPad in their hand.”
Tastad, who leads 10 different categories across North America, said that consumers also are engaging more with companies and brands that take a stand on issues that are important to them, noting that consumers expect them to be more socially responsible.
“So how do we deal with this disruption? At P&G, our goal is to lead it — constructively,” she said. “Our company strategy is to delight consumers with irresistibly superior product, packaging, brand communication, retail execution and value. By leading constructive disruption in our business, we can drive growth and create value for all of our stakeholders, retailers, investors, employees and, most of all, our consumers.”
Procter & Gamble is in the trenches in this battle. The company, Tastad said, is becoming more high tech, emphasizing automation and digitization in every part of its business. “We’re creating tech-enabled brands and experiences to serve our consumers in ways we never imagined,” she said. “In January of this year, we brought a number of our innovations to the Consumer Electronics Show. That surprised a lot of people because people don’t necessarily think of P&G as a technology company, and they don’t expect to see us exhibiting at CES. But from our perspective, technology enables us to serve consumers better.”
For example, she said P&G’s Oral B Genius toothbrush uses AI-enabled technology to make personalized recommendations for the best brushing experience, and its Opté skin care system combines multiple technologies in one device to detect and correct imperfections on your skin.
“We’re also leveraging automation and digitization to deliver the next ‘S’ curve in our supply chain,” Tastad said. “We’re building new digital platforms for integrated supply planning with greater responsiveness and agility. We’re using robotics and automation across our supply network to drive speed and offset rising labor costs. We’re using modeling and simulation, and lean innovation to speed up our innovation process to get new products to the market faster. This delivers significant benefits in time and cost, helping to reduce our learning cycles from months to days.
Yet high tech alone is not enough. The company needs to become more “high touch,” Tastad said, adding that the same shoppers who embrace technology are increasingly concerned about transparency and privacy, as well as knowing the brands they buy, what’s in them, where they are sourced, what impact they are having on our planet and what issues they’re standing for.
“We all have so much information about our consumers, and they’re demanding as they should that we protect and respect their privacy,” she said. “The new privacy laws require us to share all the information that have associated with a consumer’s personal ID, as well as the details of how we’re using that information.
“Transparency has become a foundational principle. It builds trust when we offer it. It erodes trust when we don’t. Consumers expect us to step up in how we care for our planet,” Tastad said. “At P&G, we’re focused on tackling two critical issues: finite resources and increasing consumption. We’ve committed that 100% of our packaging will be recyclable or reusable by 2030. We’ve developed a technology that takes odors and colors out of polypropylene to enable broader reusability. We have joined forces with many other companies in the Alliance to End Plastic Waste, working across industries and disciplines to find and develop solutions for this problem.”
Tastad said that by next year, P&G officials expect all of their manufacturing sites to send zero waste to landfill, noting that 85% of their sites already are there. To do this, they had to change the corporate mind-set to see waste not as waste, but as worth, and to identify creative solutions for those materials.
She pointed out that instead of sending suds that do not meet company specifications to the landfill, they are sent to car washes. Scraps from feminine care products become cat litter, and old shipping drums have been turned into school benches.
“Speaking of waste, plastics have changed the world, but infrastructure for plastic recycling hasn’t kept pace. Three hundred eighty million tons of plastic are produced each year, and too much plastic ends up polluting our world, especially our oceans,” she said. “If we don’t intervene, there will be more plastic in the ocean than fish by 2050. What a horrifying statistic!”
Taking a stand is good for society and good for business, she said. In comments to Drug Store News after the speech, Tastad said that it is vital that P&G and all retailers and suppliers remain focused on the consumer and that person’s interests.
“How do we grow the market and the different categories?” she said. “We feel that if we stay in the right growth mindset, there is tremendous opportunity to create, instead of risk. We want to be in front when it comes to new ideas and solutions to better serving our industry.”