After Unilever yesterday revealed plans to cut about 1,500 jobs globally as part of a significant overhaul of its management and structure, Ramsey Baghdadi, an analyst at GlobalData, outlined some of the current challenges faced by the consumer goods giant.
He said: “Although Covid-19 restrictions have been alleviated in many countries, 45% of consumers are still concerned about the pandemic when visiting shops, according to a survey by GlobalData. Shop visitor numbers remain lower than pre-pandemic periods, and this is a direct barrier to a significant portion of Unilever’s portfolio that relies on impulse buys. No longer can the company be supported by boosts from panic buying. New product launches and specialized products will likely see less consumer engagement, and sales will ultimately slow.
“However, Unilever has been flexible before. It quickly recognized emerging consumer behaviours such as working from home, for example, and was just as quick to react, with the likes of innovative channel strategies such as direct-to-consumer.
“The company would benefit from focusing its attention on strengthening its current product ranges and reaching new and existing customers, instead of diversifying into other sectors such as healthcare – as seen in the GSK bid. If Unilever continues to implement forward-thinking investments, it will not need healthcare acquisitions to strengthen its portfolio.”
NAM Implications:
- It may help for all stakeholders to focus on Lockdown and its impact as a business problem in search of solutions.
- In other words, we are now in a world populated by super-savvy consumers…
- …unwilling to settle for anything less than demonstrable value for money.
- Others are emerging from two years of ‘brain-bashing’, frightened, uncertain and unwilling to spend…
- They have lost confidence (and have credibility issues) with politicians, bankers, scientists and media.
- Suppliers and retailers that acknowledge this reality, and focus on attempting to satisfy the basics of real consumer need, with offerings that continually ‘more than it says on the tin’…
- …have an opportunity to play in the new norm.
- And Unilever cannot afford to be an exception…
