The View from the Glass House

Transparency challenges companies by making information about products and pricing, as well as corporate practices around labor, environment, healthcare and other issues, instantly available to potential customers. Empowered by YouTube and other new media, consumers have the power to reframe, even shatter, the reputations of products, services and companies. As transparency washes the windows of corporate headquarters, leaders of retail and consumer product companies will have to ask themselves:

* How will information technology increase transparency in the industry?
* How will transparency impact consumer behaviors, retailer strategies and producer strategies?
* How can we capture value and mitigate the challenges of transparency in terms of price, reputation and other drivers of purchase behaviors?
* How should we react to empowered stakeholders — from consumers to third parties like environmental lobbies — who can impact the reputation of the firm?

Competition in the glass house of transparency will require CPGs and
retailers to focus on:

* Creating customer trust and avoiding lapses that destroy reputations
* Co-opting customers to co-create value with the company
* Increasing responsiveness to customers by improving their abilities to sense needs, interpret requirements, frame responses, act to deliver, and learn from outcomes
* Competing on design and brand
* Strategically and proactively using information to define demand

Effectively executing the above strategies will depend on retailers’ and CPGs’ abilities to strategically ‘push’ and ‘pull’ key information to and from stakeholders.