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Much of the growth in retail today is in convenience or impulse shopping and non-store business—including online, via mail order, and TV.
Although online sales are still a relatively small part of the market, their compound annual growth rates of 18 percent are far outstripping that of urban retail sectors and shopping malls. With lower costs and greater flexibility, so-called etailing will lead the way. But in turn, this will disrupt the traditional structure of the industry, as CPG companies discover new opportunities to sell direct to consumers, and build relationships with them, more than ever before. Traditional retail channels have felt the sharp end of digital disruption as more consumers bypass bricks for clicks. Digital retailers are king, operating without overhead costs, passing savings onto shoppers at reduced prices. This retail revolution is not so much the disintermediation of retailers, but the disintermediation of the physical store.
While retailers are developing their own online offerings and pushing for cross-channel integration, you can’t help but wonder, what’s happening today in retail will happen tomorrow in consumer goods. CPG companies have got to act now to adapt their business models.
View our Digital Operating Model infographic to learn more.
Download the full article [PDF, 946KB]
Watch our video on how to build the digital model for consumer goods.
Six Ways To Evolve To A Digital Operating Model
February 11, 2014
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