“Consumers are dynamic, changing quite fast. Big brands need to act like a local start-up and natural language processing means we don’t need to ask questions anymore.”
As the founder of a disruptive start-up herself, Tugce moved naturally from Chris’ talk of disruption. She highlighted the fact that market leaders are failing to keep up with start-ups and missing the boat on new opportunities. The most striking example was the astronomic rise of fever tree in a big brand saturated market and its struggle to compete.
A lot of this inability to keep up with new players can be seen to be intrinsically tied to not being able to properly listen to the customer. In a world where we have so much data, we seem to know less and Tugce believes that we should throw away the traditional rule book when it comes to researching what customers want. Using unstructured data is far more effective to find true insight and not rely on prescriptive tick boxes as they will only ever tell us what we expect to hear! She believes this is a core reason behind the fact that 80% of growth in FMCG and Retail is happening outside of the 4 biggest players.
Tugce started by talking about our little Amazon Friend namely Amazon Echo. She asked the question, which brand does Echo choose? If you are a supplier how do you get back into that conversation?
FMCG has ironically not been particularly fast moving and the market leaders are failing to keep up with startups and are missing the boat sometimes in quite spectacular ways. She flashed the example of Fever Tree to us and how in 10 years and with only 45 employees, in a market saturated with massive well-known brands they have managed to get to a valuation of £4billion.
But how? And why?
Are the bigger FMCG brands actually listening to their customers? Do they care whether they are anymore? They seem to have 10 times more information about their customers at their fingertips but are not doing anything with it and if anything knows less as a result of it. Consumer Research is still very structured and in many ways archaic. Big fat tick box surveys can be very misleading. Segmentation rarely works accurately. MECE becomes less useful as a result, the reality isn’t as neat as a tick box and people can be part of all segments in any given day.
She then gave us a particularly telling statistic in that apparently 80% of growth in FMCG is happening outside of the big 4 players in the space. But then how can you bring the dynamism necessary into big business. Tugce’s answer is Unstructured Data and doing away with the classic approach. Throw away any hypothesis and find the things outside of the model. You can use Machine Learning to figure out what is actually going on. She then gave us the example of the “one-handed diner” that makes up 5% of the American population (people who eat food based on the fact it is easy to do one handed whilst playing on a phone, tablet, video game. So for her, it was all about how you go about actually listening to the consumer.