Q1 2019 Consumer Products Industry Spotlight
Restaurants and retail, considered for several years to represent sectors with little need to innovate to remain competitive, have benefited from sustained interest of financial sponsors looking for innovative approaches to the space. Industry consolidation has resulted in the introduction of new technologies to improve the digital experience for customers. In addition, the appetite of private equity (PE) investors for more exposure to the consumer products (CP) space has coincided over the past several quarters with better inputs sourcing for restaurants along with supply chain improvements. Meanwhile, tax savings have spurred capital expenditure across the enterprise, with additional bonus depreciation under recent reforms supporting upgrades to point-of-sale systems, greater integration of financial systems and improvements to food safety technologies, including those that exploit the benefits of increased visibility brought about by the blockchain. These moves have helped some players in CP to realize the benefits of customer service models that bring the consumer experience to the forefront.
Retailers stand to benefit from the advent of 5G wireless technology over the coming year. With improvements to connectivity accruing to the Internet of Things, companies can capitalize on existing network architecture to expand the digital experience for consumers by introducing new services such as personalized digital signage along with virtual and augmented reality experiences in store.
The use of data scientists has grown in the CP space of late, as firms leverage data to improve realtime decisions, prevent future losses, optimize existing systems and sustain customer engagement. But these transitions to the digital experience also represent unprecedented cybersecurity challenges. Although widespread adoption of 5G will allow businesses to benefit from advanced technologies such as video to assist in pattern recognition among shoppers, financials and strategics alike must also proceed with caution during the diligence process to identify the potential security risks of legacy systems
Datagraphic available for download.