Making space to grow in consumer goods
CPGs that radically rethink their foundations to operate as digital businesses can seize the opportunity to grow digital commerce.
The role of digital is not just about transactions. Today’s consumers move across both physical and digital touchpoints all the time, and customers are no different.
They want the same seamless experiences in their professional dealings with CPGs that they have as consumers – and most of them (87%) believe that that answer is in B2B commerce solutions that mimic the B2C experience.
Digital engagement is the single biggest driver of commerce online, and in the store. Welcome to the new era of commerce.
92% of consumers across 11 countries purchase through digital commerce channels today.
The shifts in CPG commerce are a departure from how things have always been done. Taking advantage of them demands key decisions from all leaders – and changes across the business.
With commerce being an increasingly critical consumer engagement channel in CPG, the brand experience should be consistent in every relevant channel. Every time.
CPGs can make change happen by building the technology foundation to be more data-driven and integrating processes to be more agile.
It is key for CPGs to join up Marketing, Sales and Commerce, and the rest of the organization to operate with true agility.
Commerce is pushing CPGs to be more digitally enabled. CPGs can continue to follow where the wave of change takes them, or they can gain control by developing a strategy that addresses these fundamentals:
Avoid the trap of showing up equally in every channel. CPGs should develop their channel strategies to understand the value potential of every channel by category, brand and geography.
Stabilize the operating model. It’s not about integrating functions. It’s about finding seamless ways of working among functions and integrating planning processes.
Go beyond reskilling employees, enabling them with tools and recruiting digital talent. Educate everyone about the commerce space and explore alternative strategies to get the right resources fast.
Develop a platform ecosystem that integrates across the value chain and business functions to support omnichannel experiences for consumers and customers.
Build a secure consumer and customer data foundation and analytics enabled by cloud. With this foundation, CPGs can act like industries that have embraced data-driven and dynamic operations.
What is digital commerce?
Digital commerce is the buying and selling of products or services through digital channels. This includes selling to either consumers or customers through direct or indirect channels.
What are examples of digital commerce?
Examples include direct-to-consumer channels, such as branded websites that sell directly to consumers and indirect-to-consumer channels, such as retailer, marketplace, and social sites where brands sell through the channels to consumers. Equivalently there are both direct and indirect to business channels, such as brand owned B2B portals and wholesaler portals respectively.
What are the benefits of digital commerce?
Digital commerce has created more options for consumers and customers to buy what they need on their terms. In addition, it has given brands a more direct relationship with consumers and customers through the digital pages and storefronts they now manage. It has also created an opportunity for material growth for the brands that rethink how they engage consumers and customers and operate as digital businesses.
What are some digital commerce challenges and trends?
The scale of digital commerce can be a significant challenge given the growing responsibilities for brands to own their experiences across all retailers, such as the product descriptions, images, retail media, and consumer feedback. In addition, digital commerce doesn’t create more consumers or needs, but it does create more channels which increases costs for the sales of those same products. This means brands must automate and systematize their capabilities to ensure they win market share while protecting margins.