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Digital Imperatives for Market Tectonics in the world of Consumer Goods

Over the course of the last decade, digital transformation and omnichannel adoption have enabled direct-to-consumer selling and engagement, creating new buying patterns and routes to market. Consumers are finding new options to satisfy their evolving needs and expectations. These new patterns, accelerated by the uptick in e-commerce during COVID-19, continue to be a growth lever for consumer goods manufacturers.

COVID-19 significantly altered consumer and user behavior—heightening online shopping and social media brand engagement. Consumer trends that may have once shifted over months or years are now happening more rapidly, faster than organizations can keep up with.

Technology is the engine for change

The need to leverage digital technologies to build agility into the core of a brand’s business has never been more apparent. Technology-driving business adaptability is the fine line separating brands that are surviving and thriving from those that are losing ground. Powerful and innovative leaps forward in areas such as data management, analytics, modeling, personalization, collaboration, and intelligent automation are giving organizations the tools and resources to not just survive, but to thrive in this new landscape.

Cloud-based solutions are the perfect enabler for engaging consumers in new ways—creating and delivering highly personalized contextual offers and uncovering customer insights via advanced analytics across multiple channels. By utilizing new data-driven models and offerings, companies can unlock new sources of value among customers, suppliers, retailers, and other third parties to create new value propositions.

PepsiCo has faced new market demands head-on, utilizing machine learning and analytics to adjust how they operate across their 23 billion-dollar brands—PepsiCo’s machine learning journey:

Data is the lifeblood of the company, we have 23 billion-dollar brands across multiple product segments. We rely on insights from machine learning to bring together our knowledge of the industry, the market, and our in-depth understanding of the shopping habits and preferences of consumers. It enables us to make informed decisions that ensure consumers get the products they want, helping us consistently meet consumer demand and drive growth for PepsiCo.”—Michael Cleavinger, Senior Director of Shopper Insights Data Science and Advanced Analytics at PepsiCo.

Lead with customer centricity

Implementing integrated customer management practices, such as customized marketing and sales strategies founded on shopper behaviors and driving tailored customer experiences, are now even more critical for organizations to compete and succeed.

Even with heightened efficiency and collaboration, many consumer goods organizations struggle to keep up with the increased pace and expanding breadth of retail demands that morph and evolve daily. With outdated practices and outmoded models, some companies have begun to view their customer management resources as being on the brink of collapse as they attempt to engage leading retailers. Restricted and limited by their current system, they are overwhelmed and under-resourced.

Manufacturers today need to adopt different approaches that consider retailer and shopper perspectives about products, mix, volumes, and other factors. It is no longer enough to work off historical performance to aid in forecasting. Leveraging machine learning and AI, revenue growth management teams can easily simulate and model alternative growth opportunities and better balance revenue and profits against volume, penetration, and market share.  

Proctor & Gamble took this lesson to heart when they began to approach their digital transformation, moving their manufacturing processes to the Microsoft Cloud—P&G’s incredible digital manufacturing journey:

Together with Microsoft, P&G intends to make manufacturing smarter by enabling scalable predictive quality, predictive maintenance, controlled release, touchless operations, and manufacturing sustainability optimization—which has not been done at this scale in the manufacturing space to date. At P&G, data and technology are at the heart of our business strategy and are helping create superior consumer experiences. This first-of-its-kind co-innovation agreement will digitize and integrate data to increase quality, efficiency, and sustainable use of resources to help deliver those superior experiences.”—Vittorio Cretella, Chief Information Officer, P&G.

Navigating to a better bottom line

Like P&G, all manufacturers can use greater forecast quality and agility through digital. They need to create a proactive inventory strategy—driven by real-time monitoring at the stock keeping unit (SKU) level, creating standardization across the organization, and including a central operational process library, redesigned workforce compositions, and more.  

Brands need to identify, measure, and monitor both channel and customer “cost-to-serve” metrics, critical to enabling fact-based decision-making and decide how best to carry out customer management initiatives. Additionally, advanced analytics allows companies to produce results that can be implemented within the customer’s operating model constraints.

Leaders in consumer goods manufacturing must recognize that due to the shifts in consumer behaviors, some of their retailer partners are thriving and that better-aligned metrics and intelligent processes, along with closer collaboration with retail partners, can be a powerful tool to address challenges that the “new normal” has created.

Get the solutions you need

By bringing together data, insights, inputs, engagements, and other metrics—manufacturers can harness powerful, customized tools to consolidate their data pipeline, implement automation plans, and manage their data flow to drive improved performance and more.

Learn more

To learn more, visit Microsoft solutions for the consumer goods industry.