What's Next for Omnichannel? Q3. How Will Manufacturers Change?

A project where employees of Dentsu Inc. answer "What will happen next?" on flip charts regarding five topics related to omnichannel. The theme for the third installment is "Manufacturers."
The first installment, including self-introductions of the four respondents, is here.

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What should manufacturers focus on to gain consumer support?

Maruyama: The third question is about manufacturers. Unlike the three of you who actually work with manufacturers and retailers, I imagine Matsunaga-san views the whole picture more holistically from a data analysis perspective. What are your thoughts?

A.1: "Product Strength and Brand Power"

Matsunaga: I feel this is the hardest of the five questions to answer definitively. However, as purchasing constraints disappear, I believe manufacturers should focus solely on enhancing "product strength" and "brand strength."

Some manufacturers focus on direct sales or building customer loyalty through owned media. However, as diverse sales channels become increasingly consolidated, purchasing data will accumulate more and more with retailers, strengthening their control. In that case, it might be wise for manufacturers to focus their efforts closer to the point of purchase on supporting retailers, while placing greater emphasis on upstream initiatives like content marketing. Even so, I still believe that unless we enhance product strength and brand power beyond current levels, we won't be chosen over competing products.

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A.2: "Gel Ball"

Uehara: This is for washing machines. You toss a ball-shaped detergent into the machine. It emerged as the third type of detergent after powder and liquid detergents.

I feel this product truly captures consumers' emotions. It's visually appealing, and the act of tossing it in makes chores feel a bit more enjoyable. It embodies that sentiment. This aligns with Mr. Matsunaga's view that product strength and brand experience are crucial.

My experience is mainly in retail support, but when I receive proposals from advanced manufacturers, I'm often impressed by how thoroughly they've researched the point of purchase. They deeply understand shopper marketing – what kind of products consumers are drawn to. If you don't think about products with the retail environment in mind, they won't gain support. That's why development with this awareness is crucial.

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A.3: "Dream"

Kanno: I completely agree with both of your points, but I'd like to approach this from a slightly different perspective, as a "dream."

Recently, I had the opportunity to tour a beverage manufacturer's factory, and something I heard there left a strong impression. They explained that, until now, as mass-market products, they developed items within a defined flavor range to ensure consistent quality. Even if they personally found something delicious, if its acidity or sweetness fell outside that range, they had no choice but to discard it. But with technological advances and the omnichannel era enabling one-to-one marketing, they believe they can now cater to much more diverse needs. While requiring seamless integration with retailers, they might be able to deliver products tailored to each individual's preferences. They expressed a dream of finally utilizing the R&D investments that previously yielded no tangible results in this new way...

I empathized with his vision of a future where our technological capabilities could be leveraged more than ever before. Many manufacturers passionately discuss their products, but if environmental changes make what we just discussed possible, it would be wonderful for consumers too. Conversely, I believe this "dream" could also become an engine to enhance product appeal and brand strength.

Maruyama: I see. So there are assets that thrive precisely because of omnichannel.

Kanno: Even in such an era, lot sizes and production line issues will remain. But if we just keep pursuing mass-producing uniform items cheaply as before, it'll be tough, right? Omnichannel is often discussed from a retail perspective, but I think manufacturers are also considering how to leverage customer touchpoints from their unique manufacturing viewpoint.

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A.4: "Trouble"

Maruyama: Horikita-san, you're really going for the negative angle here (laughs).

Horikita: Is that so? (laughs) It's not about being pessimistic; I just think examining the negative aspects makes the challenges we need to solve clearer. So, I pointed out that many manufacturers are likely "struggling" when faced with omnichannelization.

Compared to retailers, who are the main battleground for purchasing and directly face consumers, manufacturers are still somewhat removed from the end consumer. While some companies are trying direct sales to create direct interaction points, the reality is that for manufacturers, the external environment—consumers, retailers, media—is changing rapidly and leading the way.

Maruyama: That's true; compared to retailers, it might be harder for manufacturers to grasp these changes.

Horikita: Of course, as Mr. Kanno mentioned, some manufacturers are finding new directions and evolving. But for us, with our long experience in advertising, we believe we can support not only those manufacturers but also companies currently struggling in some way. Advertising has always focused on what manufacturers communicate to consumers, so I believe there's much we can contribute even within the context of their relationship with retailers.

The true value will be tested when omnichannel transformation is complete

Kanno: When I was involved in e-commerce operations, naturally, the sales of the marketplace I was responsible for were paramount. It didn't matter whose products sold. Conversely, manufacturers don't care where their products sell. That's a completely different perspective when facing consumers.

So where do these two parties connect? Well, products are arguably the strongest point of connection, which might be reflected in Mr. Matsunaga's expression.

Uehara: When you say "dream," Mr. Kanno, are you referring more to the idea that companies that value dreams will endure, rather than products themselves having dreams?

Kanno: Yes. I've never worked for a manufacturer myself, so this is purely an external perspective, but I do think there's a very strong mindset of "let's make something better." Especially in R&D, there's this artisan-like quality.

Even if a maker has only produced mass-market products until now, they actually have the potential to create highly specialized items. Now, they'll also be given the platform to sell them. If an environment emerges where niche needs—like wanting something expensive no matter the price—can be met, companies that have neglected developing high-value-added products aligned with consumer needs might face harsher elimination.

Matsunaga: In the short term, companies resilient to price wars might see sales growth. But considering the medium-to-long-term competitive landscape, I believe the battle will ultimately be won by product strength. Conversely, while retailers hold the upper hand during this transitional phase of omnichannel adoption, once the dust settles and the competitive environment stabilizes, the initiative might shift back to manufacturers.

Horikita: I agree. Honestly, price wars aren't fun for anyone. Consumers appreciate low prices, but buying cheap products isn't the only source of enjoyment, right? It's crucial to create not just the material value of an item, but the experience of buying and using it that brings joy. Manufacturers are best positioned to achieve this, and those focusing on this aspect are the ones with the most promising future.

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Q.4 "How will media change in the omnichannel era?" continues