To better refine their planning, production and distribution, manufacturers are expected to beef up their digital supply networks so they can increase supply chain efficiency and visibility to provide Amazon-level service.
They’ll especially lean on digital analytics to unlock insights about the massive amounts of consumer data in their possession; three-quarters of executives in the consumer products industry said developing digital and analytics capabilities in the supply chain is the most important priority.
However, priorities and stage of progress vary depending upon industry. "Fresh food executives share that their companies are still in early stages of implementing advanced technologies to digitize the fresh food ecosystem,” Deloitte said, which noted that just “38% of manufacturers and retailers have partially or fully implemented AI-based warehouse management to monitor fresh food stocks.”
Both direct-to-consumer and private label also remain opportunities for growth via leveraging consumer data insight. Deloitte said 57% of companies reported exploring DTC capabilities to take on competition from retailers and e-commerce, including developing DTC capabilities, acquiring DTC subscription services, and launching flagship and pop-up stores. (Unilever, for example, will collect one-third of its sales from DTC by 2022.)
Private label products, meanwhile, will account for 25% of dollar sales in the next 10 years, Deloitte said, as they’re growing three times faster than branded products.
Finding successful leaders continues to cause headaches. The firm’s 2019 supply chain and digital analytics survey revealed that the No. 1 talent challenge for 82% of execs was internal expertise. To combat this, 60% plan to increase hiring those with experience in functional and technical topics, and 43% intend to retrain existing supply chain personnel to develop digital and analytics skill sets.
Finally, it’s not enough for companies to give consumers what they want, when they want it, and how they want it. They also need to be mindful of the (much) bigger picture: About 88% of U.S. and U.K. consumers said they want companies to improve their environmental and social footprint, while almost half of U.S. consumers said they would change their consumption habits to reduce their impact on the environment.
While catering to conscious consumerism is hardly new, CPG companies can take comfort in knowing that green business is good business. Half of all CPG growth came from items marketed with a sustainability claim in the 2013 to 2018 period, Deloitte said, with revenue of sustainably marketed products growing 29% during the period, to almost $114 billion.