Skip to Main Content


The Consumer Products Industry at a Crossroads

Experience brand or commoditized product provider?

The future of consumer brands in the digital age

Consumer products brands are at a crossroads, facing an existential challenge. The shopping experience has evolved and so have the experiences that people are shopping for. Traditional brands risk being surpassed by new, platform-based “experience providers” seeking to own the category experience, often redefining it in terms of functional convenience and utility. The question is: will consumer products brands reinvent themselves as “experience brands” in a way that allows them to continue to own and, indeed, enhance the customer experience? Or will they become mere commoditized product providers in the service of organizations that do?


Dan Barnicle

Consumer Products Lead

Spotlight: Consumer Product category transformation

Within five years of opening his first Walmart store in Rogers, Arkansas, Sam Walton’s business empire had grown to include 24 retail locations, generating $12.7 million in sales.¹ His staggering expansion was thanks, in part, to a revolutionary retail strategy that prioritized one of people’s most precious commodities: time.

When Walton chose locations for his stores, he did so by identifying “food deserts,” those areas in the United States underserved by grocery retailers. His company appealed to rural shoppers not just by providing low prices but also by drastically reducing the time it took for them to run weekly errands. A trip that once took half a day could be completed in just 90 minutes. And as the company began to sell home electronics, housewares, and clothing—in addition to household staples like groceries and health products—Walmart became a one-stop-shop that served all the customers’ needs.

In many ways, Amazon is modernizing this concept. They offer a vast selection of products to people all over the world, differentiating once again on convenience and access. With Amazon Prime growing at a rapid rate in rural America, and with their recent acquisition of grocery chain Whole Foods for $13.7 billion, the company hopes to deepen their presence in consumers’ lives and claim an even larger slice of the retail pie.²

With e-commerce delivery times now butting up against the one-hour mark, at what point will it take less time for a customer to complete a transaction with an e-retailer like Amazon and have a product delivered than to purchase the product from a brick and mortar store? When we reach that point, just how many will continue to visit stores in the first place? More importantly, how will the waning importance of the physical store shelf change the way consumer products brands market, package, and brand their products?

“For traditional brands, the product is the product. For experience brands, the experience is the product.”

These are questions that brands ask with great urgency. Organizations must consider the ramifications of operating in a landscape that is being massively disrupted by a new competitor group that we call experience providers, disruptors that organize their business models around providing robust consumer experiences—as opposed to product manufacturing and distribution.

The new experience providers take various forms: voice assistants like Amazon’s Alexa that revolutionize how and when people shop for groceries and household products, smart appliances like Whirlpool’s new Amazon Dash–integrated washing machine that automates the purchase of common household goods, and product platforms like Blue Apron or Dollar Shave Club that prompt consumers to rethink everything from meal prep to grooming. In other words, for traditional brands, the product is the product. For this new breed of company, the experience is the product.

Why is this significant? Because in creating new ways of interacting with consumers, experience providers are building valuable, ongoing relationships with their customers. In many cases, they are replacing the role that traditional consumer products companies once played in customers’ lives. Slowly, these experience providers are assuming real purchasing power as voice assistants decide what milk to buy, and meal services choose which ingredients to source. At the same time, these brands are eliminating many valuable opportunities for in-store product discovery by limiting the customers’ trips to a retail location. After all, why drive to Walmart to buy groceries when Amazon delivers them to your door?

As consumers continue to become more comfortable with in-home technology, and brands deliver on the promise of simplicity and convenience, it is the experience provider that could eventually come to own the customer relationship by deciding which brands to buy, when to order them, and how to deliver them. And, increasingly, the brands that they recommend are their own. According to research from the Private Label Manufacturers Association, retailers’ own brands (private labels) accounted for $150B in sales in 2016 alone, and that number is growing fast.³ With this in mind, brands are faced with a real choice: become an experience brand... or be relegated to a mere product provider to retailers’ own brands.

Three questions for consumer products brand:

  1. What business are we really in? e.g., manufacturing shampoo or helping people look their best?
  2. What are the roles of our products and services in a connected world?
  3. How can we become not just a product provider but a true experience brand?

A Simple Cup of Coffee

Coffee is a metaphor for how the consumer products industry has changed—from the simplest product to a coveted experience. Such is the case for beauty purchases, as more women choose to invest in salon services instead of buying self-care items, as well as food budgets as they continue to shift to restaurants and meal services instead of traditional groceries. Add to this landscape the customers’ expectations for customization and convenience in an era of unprecedented choice, and consumer products brands have to factor an entirely new set of challenges into their operations.

Reimagining Retail: Branded Products in the Age of Alexa

Consumer products companies have long subscribed to the two-part equation of product marketing in which brands advertise their products to raise awareness, while also negotiating with retailers to ensure prime product placement on company shelves. As purchasing moved to online channels, brands continued to follow that familiar strategy—initially, at least—by building awareness and prominence, while also replicating similar opportunities for discovery and impulse buys in a digital setting.

That approach is still effective but with one major difference: customer behaviors today are changing rapidly. They are not browsing shelves or webpages—they are using the “reorder” feature on popular shopping platforms like Fresh Direct or Perhaps even more alarming for the brands, purchases are becoming fully automated as smart appliances trigger purchases when things like laundry detergent or toiletries are running low.

Shopping Then vs. Now

Consumer Products as Experience Brands

While the smart home has achieved meteoric growth in recent years, the technology has yet to become ubiquitous. No single brand owns the digital sales platform or connected home, though there is no shortage of contenders. Amazon, with their connected home product, Alexa, and their acquisition of Whole Foods, appears to be at the forefront when it comes to driving adoption of the connected home. Google, having integrated its Google Home and Google Express services, is a rising challenger, perhaps banking on its brand-agnostic partnerships with popular retailers like PetSmart, Whole Foods, Staples, and Walgreens. Apple, while considered a long shot by many\ industry analysts, cannot be underestimated on account of its strong brand loyalty and the surging popularity of ApplePay. And there are countless others—Microsoft, Samsung, and IBM, to name a few—that have made major investments in this space.

But while these tech giants may be top of mind now, they are far from owning the smart home experience. At the same time, consumer products companies must be aware that they are likely at a disadvantage when it comes to entering this market. Much like how single-brand stores have never had much success, so too would a brand-specific platform struggle in the digital world. Instead, most brands should consider their role as an experience brand on a smaller scale. Take Nespresso, for example. The company recently announced that select models of its machines will be equipped with a reorder feature so that customers can replenish capsules as needed. HP announced a similar feature on select desktop printers which would allow customers to reorder ink at the touch of a button. These examples illustrate how organizations can reinvent themselves as experience brands without overextending their identities and products.

Consumer products companies with greater reach may consider employing one of the industry’s traditional growth strategies: acquire emerging competitors. In the same way that Unilever acquired Dollar Shave Club in an attempt to put a dent in rival Gillette’s core business, so too can industry players identify emerging, high-potential platform providers and capitalize on their growth through exclusive partnerships or acquisitions. In fact, this may be the best way—if not the only feasible way—for companies to transform into platforms that match the scope and scale of some of the early leaders.

Becoming an experience brand: 5 questions for Consumer Products Brands

For consumer brands grappling with massive disruption, time is a precious commodity. Experts suggest that within the next five years, digital shopping will begin to outpace spending at brick and mortar stores. Brands must not only prepare for this new reality, but they must also decide what role they wish to play in it. To that end, we have developed a series of questions for brands to ask when considering their future as experience brands.

  1. Has your business reframed its core product in the context of the role they play in your consumers’ lives?
  2. Is your organization delivering the underlying experience that customers want? What experiences do you provide to support the consumers’ needs?
  3. Can your company’s existing sales and delivery channels support operations as an experience brand?
  4. Can your infrastructure effectively manage the platform requirements with respect to automation, shipment, and payment?
  5. Is your offering as an experience brand differentiated from competitors? Is it simple, convenient, and customized?


  1. Walmart. “Our History.”
  2. Soper, Spencer, Nick Turner, and Selina Wang. “Amazon to Acquire Whole Foods for $13.7 Billion.”
  3. Private Label Manufacturers Association. PLMA’s 2017 Private Label Yearbook: A Statistical Guide to Today’s Store Brands.