The rapidly changing landscape in the consumer goods industry presents a unique challenge to CPG companies in 2018. To meet the challenge and continue to grow their businesses, consumer goods enterprises need five key capabilities and assets: a supply-chain optimized for click-and-collect; a data-driven workflow; a first-mover approach to new routes-to-market; one or more direct-to-consumer (D2C) channels; and a recruiting strategy that attracts leading-edge, CPG-specialized talent. Below, we take a close look at each of these capabilities and assets, and how CPG companies can leverage vertical specific software to help attain them.
One: A supply-chain optimized for click-and-collect
The click-and-collect model refers to online purchases that the buyer picks up at a local store. Click-and-collect is poised for tremendous growth in coming years and is already the most common digital inroad for grocery stores. The primary advantage of the click-and-collect model is that it combines the convenience of shopping online with the speed and cost savings of local pickup. Consumers can browse your digital shelves and fill their digital carts in a fraction of the time it would take them to walk the aisles and wait in a check-out line of a brick-and-mortar retailer. Generally within a few minutes or hours, their purchases will be waiting for them at their local retailer to pickup at their leisure.
Although highly efficient for the consumer, the click-and-collect model does present challenges for CPG companies that they need to address head-on in 2018 and beyond. For example, consumer goods companies will have to consider how their products will stand out on digital shelves, and how to use the unique platform of e-tailing to leverage cross-selling that attracts rather than distracts. This change will require a significant new investment in digital merchandising. Another challenge CPG companies will face as click-and-collect gains momentum is inventory management. CPG companies participating in click-and-collect must keep in mind that if there is any discrepancy between digital shelves and local, in-store inventory, the CPG company will upset both their customers and their brick-and-mortar retail partners. Therefore, using vertical specific software that provides real-time, highly accurate views into your inventory is essential.
Two: A data-driven workflow
The consumer goods industry has its own unique set of data streams from sources as diverse as field sales, digital merchandising, direct store delivery (DSD) and distributor management, just to name a few. And as the sheer volume of data continues to grow from every channel of the CPG enterprise, it’s no longer possible to rely on industry know-how and instinct alone when making key decisions. In 2018 and beyond, it’s essential to make data-driven decisions that accurately respond to changing market dynamics and consumer demand signals across all your routes to market. To accomplish this feat, it’s necessary to collect, coordinate and visualize your data streams into a single nerve-center that is readily accessible to all the key positions in the CPG enterprise. This is where a CPG-specific sales force platform is necessary. In order to consistently help you make critical, data-driven decisions, the solution you choose must have leading-edge analytics; a set of function-specific dashboards; and role-based access. To ensure easy setup, maintenance, uptime and availability, it’s also necessary that the underlying platform is a cloud-based system that’s accessible anywhere, from any device.
Three: A first mover approach to routes-to-market
Being the first-mover in a new route to market will give you an advantage that can quickly expand into longtime, enduring leadership. Above all, being a first mover will give you more time to experiment and perfect your strategy. It can take months, or even years, to fully leverage a new route to market. However, as a first mover, by the time your competitors struggle to get started, you will already be at full steam. First movers often attain the lion’s share of their new markets for this reason. This has never been truer than in the online sector, where market share is far less evenly divided than in traditional markets. If you have any doubts about the difference, consider Google’s dominance in the search market, and Amazon’s dominance in online shopping.
Four: One or more direct-to-consumer sales channels
The direct-to-consumer (D2C) model has gained steam in recent years and represents a growing opportunity for CPG companies. Some of the most successful D2C channels include self-marketed standalone sites, Amazon listings, mobile apps and pop-up shops. However, while levering your new D2C channel, it’s also important not to close the door on other indirect channels that are serving you well. To ensure a balance, you may choose to offer one version of your product through traditional channels, and another through your D2C channel.
Five: A leading-edge talent acquisition strategy
Attracting talent with the specific skill set required by CPG companies must remain your highest priority in 2018. As the digital age unveils new technologies and routes to market, the highly specialized talent required to leverage them will become increasingly scarce. For example, if you see an opportunity to be the first brand in your industry segment to make full use of a blockchain-enhanced supply chain, you will need IT specialists of the first order that have blockchain-specific experience and expertise. However, regardless of which technologies and routes to market you leverage and adopt in the digital age, you will want to ensure that your teams are up to the task. Accordingly, make sure that your talent acquisition strategy aims to bring on board field reps, merchandisers and account managers that are entirely comfortable using sophisticated, CPG-centric software, including mobile apps, to enter and visualizing your company’s data.
Making gains in 2018 and beyond
In 2018, CPG companies face the challenge of a rapidly changing landscape in the consumer goods industry. To meet the challenge and continue to gain market share, CPG companies need the five key capabilities and assets outlined above. First, CPG companies need to optimize their workflows to meet the demands of the click-and-collect model. Second, CPG companies need to transition to data-driven decision-making supported by vertical specific sales force software. Third, consumer goods companies need to act swiftly to attain the first-mover advantage when entering new routes to market. Fourth, CPG companies need to fully leverage one or more D2C sales channels. Fifth and finally, consumer goods companies need to attract leading-edge, software-savvy talent.
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