Top Digital Transformation Trends for the CPG Industry

Table of contents

• Introduction
• Consumer Shift
• CPG Manufacturing
• CPG Industry after COVID-19
• Setting an Approach
• Conclusion

Introduction:

On an average, CPG companies have reported an 8 percent increase in technology budgets over the past three years, indicating an increase in digital technology investments.

Consumer goods companies are more likely to focus on their sales & marketing side, but lately the transition has shifted to providing digital solutions for the manufacturing process & supply chain in Industry 4.

A research done by Mckinsey and IDC says that the percentage of adoption for digital transformation is increasing each passing year and projected to be adopted by at least 89% of the CPG companies.

Below exhibits shows sales impact with digitisation: 

Consumer Shift:

In the CPG industry, consumer shifts are observed especially in their buying behavior. They tend to compare prices, read reviews & check product ratings on their smartphones even when they are standing at a physical store.

To facilitate customer experience, companies are experimenting with mobile apps, PWA and E-commerce websites, VR stores, “click to collect” etc.

Below exhibit shows the future of digital adoption:

The traditional CPG industry has its share of experiences with old fashioned selling and product manufacturing, now it’s going through a major transition where customers are functionally digitized with the new age internet, the new generation of digital customers expect customized and digitized product, where they can have everything on the go with one click.

When a leading company approached us to discuss how they could leverage technology to scale their business.

We strategized and delivered multiple solutions which resulted in a 40% increase in their average revenue per user and a 20% increase in paid users.
Read how it helped them achieve the desired results.

For the past few years, companies have started experimenting with technology and seeing the growth of 70% in goods and services, they are moving towards automation in every step.

Areas of manufacturing, Retail & supply chains where digital tools can observe transformation and advanced analytics to optimize manufacturing processes. 

Like many organizations are using IoT to keep a check on their inventory,  blockchain technology is being used for security and transperancy purpose, it eliminates chances of breach and misuse of data as it needs consensus from all the authorities to make changes, mostly used in banking and data security, public, transparent ledger system for compiling data on sales, tracking digital use and payments to content creators.

CPG Manufacturing:

Manufacturing companies are investing time in Lean Transformation and adding digital technology, lean operations are gaining new heights.

Old methods of working:

For an instance company A has all the resources at place and lean operations but follows a traditional process of collecting data, tracking inventory, receiving orders, sharing information, tracking performance, operation planning, machine data, machine/equipment downtime etc.

Problems:

It’s difficult to analyze huge data with accuracy which can lead to situations where orders will get delayed, sales channels can get affected which leads to delay in marketing.

How digitization could help:

It’s important to understand where a company would like to implement digital technology and what areas, like consumer goods manufacturing, supply chain, sales & marketing.

Above situation could have been avoided had the company invested in cloud technology where they could have real time data for day to day operations and planning new initiatives, improvement plans. Using IoT could track units loaded to ship the products, prediction of machine/ equipment breakdown before occurrence could save time and efforts.

Using analytics  and machine learning could give insights to all operational data in a single dashboard. Management can have company-wide information on intuitive dashboards and heat maps, allowing them to detect performance gaps and compare metrics by product, site, and region etc.

A leading enterprise approached us, we developed a “stock capture transfer” solution that uses machine learning and Analytics to analyze data by which our client can have a 360 degree view of data to gain insights by generating area wise reports, client can track the shipment, manage inventory effectively and coordinate with retailers, the sales team leverage the readily available information.
Let’s take a closer look at the solution.