The past few decades have seen many changes in the way technology impacts the consumer packaged goods (CPG) industry. IT spending was increased in areas such as modernized company-wide computer systems, cost reduction, and warehouse and packaging technology—all of which helped facilitate easy systems consolidation and integration—if and when acquisitions were to occur—as well as improve supply chain processes.
All fairly standard “keep up with the Joneses” IT and technology maturation, right? Where IT and tech related change didn’t occur in CPG is, unfortunately, where it was most needed and could deliver the highest return on investment: Business growth, development, and differentiation.
But, as any CEO who has pushed an organization through a digital transformation can attest to, it’s never too late for change. CPG has recently seen a rise in “new-technology”-focused Chief Information Officers—IT leaders who understand the potential financial returns of tech-driven innovation and the importance of gathering consumer data to help drive business value.
3 Ways Forward-Thinking CIOs are Rethinking CPG
Mobile- and Location-Based Services: Mobile- and location-based services can work to a CPG company’s advantage in more ways than one, touching both customers and in-store reps. We already know that mobile e-commerce is growing at an astounding rate, and that a frictionless mobile buying process provides a deluge of first-party customer data, helping drive revenue for retailers. And that’s a good thing.
But the right technology also gives CPG goods companies the opportunity to increase shelf space, adjust pricing, and ensure strategic promotion compliance. How? The right tools can track how much shelf space brands were allocated in comparison with competitors, and they can track whether retailers are complying with promotional agreements. Essentially, they provide data that CPG companies can measure and act on. And that’s an even better thing.
Direct Consumer Relationships: Brand name goods are one area suffering in the CPG industry, with “no-name” and store brands chewing into their market. Most people today watch their spending, and this is where personalized, segmented targeting can help a brand reconnect with customers and start to make gains when it comes to customer loyalty. It would be hard to name a “big brand” that’s not online in at least two capacities, with websites, mobile apps, social media accounts, and online communities that have been built around the brand.
As reported in Martech Advisor, a Forrester study showed that “…82 percent of decision makers within manufacturing organizations reported improved customer relationships and 76 percent reported improved customer experiences as a result of implementing direct-to-consumer practices.” Again, by using data acquired through social login and other frictionless authentication processes, companies are able to intimately know their consumers and strategize on how best to reach them digitally.
Predictive Analytics: The key with predictive analytics is to be able to provide “forward looking”insights, rather than insights solely derived from historical data. This enhances long-term planning and forecasting, and it helps predict the ebbs and flows of potential markets due to seasonality. That said, data doesn’t analyze itself, and in order to succeed in predictive analytics, companies need to invest in hiring data analysts, or training from within.
Disruption in every aspect of shopping, especially where mobile and digital are concerned, appears to be the new normal. Virtually anything the heart desires can be bought online today, and new niche sellers are popping up every day. For CPG brands to stay relevant and continue to grow, they need innovative, customer-focused CIOs at the helm, no matter how large or small the organization.
By David Kerin