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Are you ready for digital path to purchase?

By Lora Cecere, Founder, Supply Chain Insights - 05/09/2014
We can now power a customer-centric value chain. The consumer packaged goods (CPG) company has never really known its shopper. Today, it can. Shopper and customer data is available in near real time through the different technologies outlined in the image you see below.

While it sounds enticing, it is hard work. It requires new mental models. For many, they will have to “break the glass” and change what has defined them for the last two centuries. It requires outside-in, cross-functional processes enabled by new technologies that are quickly adapting and morphing. It is no longer about traditional sales and marketing, it is instead about serving the customer with new products and services. It is about sensing and shaping. Retailers are asking manufacturers to do different better. To grow, there are three essential strategies to consider:
  • Test and Learn: E-commerce is now a viable channel for consumer products companies. We can now test and learn in real time. The matching of customer attributes with product attributes through e-commerce programs enables the refinement of traditional product concepts and online learning. The demand latency of the e-commerce channel is in hours and days, allowing for early market reads and concept refinement. Cognitive reasoning engines enable the ability to test and learn.
  • Digital Marketing: Marketing programs through the Internet, social media and smartphones enable the digital path to purchase. Since these programs have both more impact on growth and drive even greater volatility in sales lift, it is now even more important to rethink processes to be outside in around the four moments of truth. Today, based on a recent TPM study from Supply Chain Insights, 63 percent of companies are attempting to execute a digital path to purchase program. They look different, but they are all designed to capture the hearts and minds of the consumer in the shopping cycle to power growth.
  • New Retail Models: With the center store being attacked by Amazon, the balance of power has shifted toward e-commerce giants and the consumer. As a result, the traditional retailer is looking for new ways to drive excitement in center store. They want to redefine the role of the store. Here, CPG companies have a new opportunity to do different better. The retailer is more open to personalized assortment, specialized programs and tailored promotions. The focus is on the basket. This gives rise to new opportunities in category management.  

So, why make the shift? The answer lies in growth. While growth in the category of CPG and food/beverage has slowed to gross domestic product, and traditional advertising is less effective, these digital programs offer new opportunities for growth. The interface with the shopper in the four moments of truth has never been more possible and more critical.