Greg Kelly’s Post

Coming back from a holiday week in the US (although I celebrated it in the wonderful Republic of Ireland!), I want to share a terrific piece of work my colleagues Jessica Moulton, Pavlos Exarchos, and Warren Teichner have created on growth in the consumer goods industry.  This is an industry that used to be at the top of the charts in performance, but has not been recently. In this article they explore the impact of megatrends that have worked against the industry, and highlight the need for a bold shift in strategy – one that ignites growth where it is scarce, and trims costs efficiently. It suggests success will rely on a dual agenda: 1. Portfolio Management – harnessing mergers, acquisitions, and divestitures to bolster growth and venture into new business arenas. 2. Performance Enhancement – building tech-enabled commercial capabilities for market expansion, premiumization, and achieving high productivity through innovation and automation.     I have had the privilege of working in this industry for three decades, and found this step-back look an enlightening perspective on what has changed and why.  #CPG #Growth #B2B2C https://lnkd.in/gdB-SP27

After a two-year high in US consumer optimism during Q1 2024, Q2 saw confidence fall to its lowest level since late 2023.     This analysis by our ConsumerWise Team points to a potentially meaningful shift in consumer spending, driven by depleted personal savings, doubt over the labor market, and inflation concerns. Expectations among consumers that their spend will grow on essentials – particularly gasoline – mean they are set to cut back on travel, home improvements, and fitness and wellness.     Despite trading down, there is still intent to splurge, especially among Gen Zers and millennials. Across the board, the hospitality sector looks set to benefit most here, but there are interesting variations by age group.     There is more on the nuances of this shift, across generations and income bands, here. It’s a good read for consumer leaders.     #ConsumerInsights #ConsumerGoods #CPG #Retail #B2B2C   https://lnkd.in/gf5imvEq

I sometimes get asked whether we have alliances to help our clients navigate the fast moving AI space. The answer to that is yes. Please see the attached link for the latest update on our always evolving ecosystem of partners.     We estimate that currently just 10% of companies’ AI pilots move from proof of concept to production at scale (see link in the comments). Our ecosystem of partnerships helps our clients move from pilot to scaled impact, pairing our strategic, organizational, change management, digital, and implementation expertise with lighthouse solutions like CoPilot Studio.     Gen AI use cases could generate $2.6 to $4.4 trillion, and through end-to-end approaches, we are helping clients navigate the adoption and deployment of new tools and processes to unlock this potential.     Get the full detail from my colleagues at McKinsey Digital and QuantumBlack, AI by McKinsey via the link.  #GenerativeAI #ArtificialIntelligence #Microsoft #Growth #GrowthTech

Despite the buzz surrounding generative AI, only 5.4% of US firms are actually using the technology to produce goods and services, according to the U.S. Census Bureau.   That’s why we’ve dedicated much of the latest issue of The Growth Question to gen AI, and how leaders can get behind the wheel and start the virtuous cycle of innovation and deployment to capture its full value.   Also making our gen AI-related headlines this month: we look at the use cases driving wins for B2B and B2C marketing and sales leaders, and how the technology’s granular insights and personalization capabilities are helping them to unlock outsized gains.    A big thank you to my colleagues across our practice and beyond for these and the other insights in this edition of The Growth Question. And if you’d like to receive every edition of this bite-size digest for growth leaders directly, don’t forget to click ‘follow’.    #TheGrowthQuestion #McKinseyGMS #Growth #Marketing #Sales

Growth leaders are finding ways to drive growth in challenging macroeconomic environments.      We brought our global practice together in Copenhagen last week, to learn from each other and strengthen our practice further. To recognize our Firm’s great support in creating our distinctive Growth practice, we made our Global Managing Partner Bob Sternfels an honorary member. He started in operations, so we recognized his outstanding personal growth to become a Growth leader!     Following that meeting, my colleagues Sunil Kishore and Bogdan Toma hosted a growth breakfast in London on Friday. I was inspired by the group’s energy and perspectives on driving growth outperformance, even after we’d heard sobering findings on the macro outlook from my colleague Tera Allas CBE.      It’s consistent with the findings from our growth research: growth outperformance starts at the top, with top teams choosing growth. It reminded me of the article I’ve linked in the comments, where leaders share their orientation to growth.      Many thanks to Bogdan, Sunil and Tera for hosting us, and to our growth leaders for their participation.     #Growth #Leadership #London #Copenhagen 

Many of us are familiar with the crosswinds impacting consumer-facing businesses.  It’s been a tough ride with periods of record-high inflation, and consumers shifting their habits and demanding more from their favorite retailers. Brands and retailers are having to go further to stand out in their market and retain valuable customers. One way to do this is by better integrating their loyalty programs with pricing strategies.   My colleagues Kelsea Alderman, Oren Eizenman, Jad Hamdan, Jake Hart, Emily Reasor, and Jamie Wilkie have broken down this opportunity into three tiered approaches – designed to increase customer base, shift customer behavior, and create new value through personalization.  Each successive tier is more challenging – but offers increasingly compelling returns. My colleagues share the benefits of going for gold, and what it takes to get there.  #Pricing #CustomerLoyalty #Growth 

The sophomore edition of The Growth Question newsletter is here – our regular round-up of need-to-know stories from McKinsey Growth, Marketing & Sales for time-strapped commercial leaders.    India leads our headlines this month. We celebrated the reasons that India is now the world’s fourth biggest economy – and its prospects for continued outsized growth if companies follow the example of its one-in-five growth champions at our growth summit: ‘India’s Century: Navigating to Extraordinary Growth’. Here, we explore the preconceptions it must overcome to get there.   In the newsletter you will also find real-life case studies of companies putting next-gen B2B sales techniques to tangible effect.    Follow the link for the detail, and feel free to share and subscribe to keep up with our latest insights.    #TheGrowthQuestion #McKinseyOnGrowth #McKinseyGMS #Growth #Marketing

“When everyone owns the customer, then no one does”.  It’s a strong imperative for refocusing the role of marketing in your organization – one of many in this excellent piece by my colleagues Marc Brodherson, Jennifer Ellinas, Ed See, and Robert Tas in Harvard Business Review.  The kicker is, businesses that make marketing central to their growth strategy are twice as likely to see 5% revenue growth over those that don’t. But a catalogue of misalignments between CEOs and CMOs mean too many companies let such opportunities fall by the wayside (see the comments for our full research with Association of National Advertisers into this often-failing relationship).  #CEO #CMO #McKinseyonGrowth #CourageousGrowth #AssociationOfNationalAdvertisers #McKinseyGMS 

Consumers are spending more to buy less.       That’s the conclusion from the work of my partners studying recent dynamics in consumer goods. Consumers are shopping as frequently – if not more often – than they were a year ago, but they are buying fewer items.  Discretionary purchases are also suffering, with many consumers waiting for items to go on sale before purchasing – a trend that is true in several categories.      This article is great reading for CPG leaders looking to lay the groundwork to emerge from uncertainty stronger.      Portfolio, channel, pricing, loyalty, and supply chain are all powerful levers to pull – read on for Christina Adams, Kari Alldredge, and Warren Teichner’s insights into why. They also offer a view on the impact of GLP-1s on consumer spending.      #CPG #ConsumerGoods #Retail #B2C