Building Omnichannel Capabilities
CGT recently sat down for this “state of the industry” chat with Jamie Head, chief information officer at Ocean Spray, and Upjit Ghuman, associate vice president for retail & CPG at HCL Technologies.
1. Which areas of the traditional consumer goods enterprise must undergo the greatest transformation to address the new omnichannel marketplace in which we’re operating?
JH: Omnichannel will touch upon many functions within an organization. To have a fluid conversation with our consumers, we first must define the consumer journeys and have a vision of where we want to go. This typically starts within marketing, but a cross-functional team will need to be brought together to execute against it.
To make it work, strong collaboration with IT/tech functions is required to map the journey to digital platforms and, importantly, the data flow across all the intersections of the consumer journey with the product or services. We typically see strong omnichannel experience between owned web and e-commerce channels, but not fully integrated across customer care and social channels, where consumer-generated content is a wealth of information for increasing conversion and engagement.
Everything is pointing us down a path of personalization, which will require a significant increase in artificial intelligence/machine learning capabilities to accomplish at scale. Here, too, the marketing function needs to define the journey to ensure success.
UG: Success in the omnichannel marketplace requires organizations to reconfigure themselves. Therefore, it’s not just a few areas that need transformation. Implementing independent omnichannel strategies within silos will deliver limited success, since their impact on other dependent functions cannot be disregarded.
Organizations that succeed in the omnichannel world demonstrate intense collaboration across functons including sales, marketing, supply chain, R&D and technology. Enterprises that extend this collaboration beyond their organization into the ecosystem will create competitive advantages in this digital era.
2. What are the primary obstacles to the adoption of the new tools and technologies that can make this happen?
JH: Effective leadership and vision are required to lay out the opportunity for a CPG company. Without a vision, functional leaders lack an understanding of the role they must play to achieve the omnichannel experience. Once that’s established, the hurdles become technical in nature, as legacy systems need to interface and map out the end-to-end data flows.
But importantly, many data components don’t traditionally sit within a company’s walls, as ad agencies have typically managed that part of the business. Collaboration across all players is required, with significant focus on data ownership, privacy and regulation.
UG: Legacy systems are the primary obstacle. Most consumer goods companies are constrained by legacy systems — not just by the technology, but also by process configuration — that provide little supply chain visibility, trade collaboration, and agility to respond to new marketplace changes, all of which are crucial for omnichannel success.
There is a question I’ve asked multiple business and technology leaders in our industry: If you were to re-imagine the processes and systems across your organization, how different would they look? Almost always, the answer is “Very different.” What’s stopping them is their process and system legacy. That’s why we see “born digital” companies in various categories disrupting the market and mammoths, constrained by their legacy, unable to match.
3. What emerging technologies will be most critical for future success?
JH: In the short term, many companies are focusing on analytics and compiling insights from multiple data sources across supply and demand to drive the business forward. As this matures, AI/ML and predictive algorithms will not only be done at the center of an organization but at the edges as well — where a lot of innovation can occur.
We are also seeing AI make a big impact in the workforce through the automation of internal processes, freeing up time for employees to focus on more value-added tasks. As IT functions become smarter and develop business logic outside of core systems, AI will drive significant competitive advantage through speed of execution via intelligently connected systems for business processes.
UG: Augmenting the workforce with AI technologies will deliver significant transformation in operations (to begin with), business outcomes (in the medium-term) and business models (eventually).
The most critical area where enterprises can leverage AI is to bridge the productivity gap between high- and low-performing employees. AI can radically boost productivity levels by eliminating redundant and mundane activities and freeing up time for employees to focus on more intelligent jobs.
Widespread AI adoption will require fundamental changes within organizations, which will need strong leadership commitment, a rethinking of their HR strategies, alleviation of workforce concerns, and investment in training.