Behind all the lofty visions for digitization, consumer packaged goods (CPG) companies face the challenging task of balancing top and bottom line industry demands with sustainable long-term practices.
According to the industry director at SAP for CPG and life sciences, Stuart Wilkinson, CPG companies are shifting their operations to the cloud to improve business flexibility by linking data to company-wide activities.
Apparently, they want the best practices to simplify business operations since that is how they will achieve high levels of performance, boosting efficiency, and reducing costs. They can assess, monitor, and reduce the carbon footprint of their product supply chain from sourcing to distribution and beyond with centralized data visibility.
Here's a short rundown of some of the most recent consumer products sector analyst forecasts.
Customization might just be the watchword for CPG firms looking to thrill their clients, but it's laden with pitfalls. According to IDC researchers, by 2024, 35% of businesses would openly entice customers to give personal data in exchange for monetary incentives, services, and special experiences.
Nonetheless, Gartner experts anticipated that 40% of customers in the same timescale will purposefully discount the personal data obtained about them, making it harder to monetize. It's hardly a surprise that IDC researchers predicted that organizations will expand their data privacy activities beyond compliance needs, with 60% of businesses defining KPIs for ethical data usage by 2023.
These struggles are pivotal for consumer brand industries at all production stages. According to IDC research teams, conventional distribution approaches will disintegrate as early as next year, as 20% of companies in some industries use advanced technologies to go direct to customers in order to enhance consumer satisfaction and product development.
"Consumer brand awareness and selling is uncharted ground for CPG firms," Wilkinson added. "In the midst of a labor scarcity, organizations are trying to recruit individuals with B2C capabilities, implementing cultural reforms as well as new technology to maximize on these new opportunities."
Indeed, Gartner researchers see cloud computing as the primary engine of corporate innovation across all sectors. As cloud-based systems grow more prevalent, industrial networking will become increasingly important in all industries. According to IDC, by 2024, 40% of businesses will exchange data in their ecosystems (suppliers, partners, and customers), enhancing OEE (operational equipment efficiency) of their manufacturing processes by 10% on average.
No more excuses for not going digital with CX
According to some researchers, customers will reward firms that soothe their tension. Forrester analysts have also projected that in 2022, customers will resort to uplifting, appealing products and experiences that give respite from the strain of persistent uncertainty. If these projections are anything to go by, this could favor businesses that sell items that inspire delight (such as spa packages and comfort food).
Customers have limited tolerance for anything less than outstanding service; great packaging, prompt delivery, and goods that meet their expectations. According to Forrester, around six out of ten US and UK customers feel organizations "should have worked out how to handle pandemic-related interruption by now."
According to these strategists, brands should invest in the fundamentals of commerce namely inventory control, order management, and payments control. This will help them to improve the customers’ shopping experiences.
The most significant business difference is made by gaining insights from linked data. According to IDC, 30% of Fortune 2000 organizations will use the next-best action throughout their omnichannel environment by 2024, creating the need for omnichannel management, customer support solutions, and customer data platforms.
Prioritize sustainable business
For supply chains, it’s hard to separate the connection between technological innovation, consumer experience, and sustainable business.
According to IDC researchers, by 2023, half of all supply chain predictions will be automated using AI, increasing accuracy by 5%. According to Gartner experts, by 2023, half of the global product-centric organizations would have invested in real-time transportation visibility technologies. IDC research states that seventy percent of manufacturers in global supply chains will have improved the long-term profitability of the supply chain by investing in software solutions to support circular economy business models and sustainability by 2024.
The research further indicates that by 2024, thirty-five percent of manufacturers will invest in order management software to improve visibility, agility, and delivery speed. This may result in a twenty-five percent improvement in OTIF (on-time, in-full) fulfillment. By 2025, the prediction is that 40% of G2000 firms will invest in supply chain solutions to improve inventory and information velocity so as to improve customer experience and last-minute delivery efficiency.
The interesting thing about these forecasts is that they are predicted to drastically alter the CPG industry in just a few years. Never before has the future been more transformative.
