How CPG brands are Navigating the Path to Recovery

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By David Ahuja - 11/04/2020

Unless your company produces and sells essential items, your economic outlook may have appeared bleak as you struggled to adjust to changing market conditions. Businesses had to understand new consumer behavior patterns, like trying new brands out of necessity or using online shopping for the first time. According to a recent Braze survey, one in four consumers tried a new brand during the pandemic, and 95 percent plan to buy from a new brand again. 

In addition, standard manufacturing, supply chain, demand planning, and replenishment processes were rocked by disruption. Some CPGs were prepared with comprehensive business continuity plans so employees could rapidly transition to remote work, allowing the company to focus on the disruptions. Others were not prepared, and it took weeks to get employees settled so they could get their attention back to operations. 

Despite the disruption, COVID-19 has provided opportunities to create connections with loyal customers. We have seen several common themes differentiating the CPG brands that are transforming quickly to accelerate their paths to recovery. 

Agility accelerates recovery

One characteristic that stands out among CPGs on a clear path to recovery is agility. These agile businesses had already invested in digital transformation technologies and were able to successfully and quickly respond to process challenges. Meanwhile, digital laggards had to find partners to help manage disruption in their plants and distribution centers because existing CPG tools — that likely weren’t based on modern technologies — became obsolete overnight.

Technology is the driving force behind agility to transform processes and overcome challenges with speed. It also gives companies end-to-end visibility into business processes to identify opportunities for optimization and growth. Agility and speed are no longer optional because all brands should function with a start-up mentality to be prepared for constant change.    

Relevance drives brand resilience

Another factor in the recovery process is maintaining or regaining brand resilience with consumers. What made a brand relevant in the past may not be the same in a post-pandemic world. Many brands took bold steps to help employees and communities, like gifting over 800,000 pairs of shoes to frontline workers and their families. Lots of CPGs pivoted marketing messaging to communicate empathy, concern, and care, while others transformed manufacturing lines to produce essential products, like masks and hand sanitizer. Consumers will remember these actions and are likely to reward brands that demonstrated social values. Consumer behavior has become unpredictable, so brands have to listen carefully to the voice of the customer to stay relevant.

Innovation leads to recovery

Many CPGs have innovated their way to recovery. Armed with a new level of risk tolerance, CPG brands have experimented with new approaches, like launching direct-to-consumer websites. Over the past few months, we have seen several large and small CPGs launch direct-to-consumer sites offering bundled products, new-to-the-world products, same-day delivery, and free shipping. Others are offering new services to get products to consumers, like Amazon’s new Just Walk Out cashier-free AI and computer vision technology for retailers and Coca-Cola’s new contactless Freestyle soda fountain that allows consumers to fill a cup from an app on their mobile phone. Taking risks in an unpredictable environment can accelerate the path to recovery.

In the words of Jack Welch, the late CEO of General Electric, “Leaders emerge during trying times.” The CPGs that successfully recover will increase agility by migrating key workloads to cloud, maintain brand relevance, and innovate with new approaches to connect with customers.

Learn how AWS CPG solutions can help your company transform the way you make, move, and market brands. And also plan to attend AWS re:Invent 2020, a free virtual conference, to learn how to innovate and transform your business with the power of cloud.

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