Maintaining an up-to-date digital strategy is now more crucial than ever before. The Retail and CPG industries have undergone significant changes as technology has enabled the breakdown of every barrier to entry that once existed.
These barriers included the necessity of a physical store, exclusivity between CPG brands and retailers, and geographic boundaries. They are no longer of concern because consumers can easily procure items anywhere at any time, at the cheapest price point, with a single click of a button (or product subscription) and never need think twice about their purchasing needs ever again!
In other words, the ‘old rules’ have gone out the window.
This disruption didn’t occur overnight. It’s been slowly building, but it seems that somehow, the vast majority of companies were oblivious to the developing omni-channel revolution. Imagine a frog that’s found itself in a pot on a stovetop: one minute, it’s taking a nice warm bath, but next thing you know it, the frog is blissfully unaware of the water slowly heating up until it’s too late for the frog to escape.
It’s not too late to introduce or revise a digital strategy, and the 5 Pillars will get retailers and CPG brands headed in the right direction. Organizations that still have a loyal customer base due to brand affinity or a strong loyalty program can still survive and thrive if they focus on the basic economics of supply and demand.
Organizations doesn’t need to excel in every single component listed below, but they should figure out the right mix of capabilities for their business. The first two key digital pillars are from a demand perspective, and the remaining three are for supply chain. Also keep in mind that when solving for one pillar, there will be a downstream impact to other pillars.
5 Pillars for Retail/CPG Digital Strategy
- A seamless and hyper-personalized experience.
- Additive complimentary services.
- Content curation.
- Platform play.
- Data-driven supply chain (rather than one led by merchandising).
Mapping the 5 Pillars
Mapping this equation to the 5 Pillars reveals how demand creation can increase conversion and/or order value while supply management can impact all three criteria.
The next part of this series covers demand creation in detail, with a focus on seamless omni-channel experiences and personalizing the path to purchase by monetizing moments. I will demonstrate that, by adding simplistic complimentary services, one can significantly lower the cost of business while increasing sales.
The third and final part of this series will focus on supply management. Digital capabilities can have significant impact on how we market our merchandise, how we sell products without owning the inventory, and how we should manage our inventory procurement.