According to euromonitor, even as recently as 20, online sales accounted for less than 1 percent of food sales and less than 3 percent of nonfood. Countless companies are rushing to meet these changing demands. For far too long, digital transformation initiatives have been solely focused on customer experience. Digital innovation in consumergoods manufacturing mckinsey. With economic uncertainty looming, how can cp executives balance prudent investment strategies with technology initiatives that address the needs of increasingly empowered consumers. Trends that will shape the consumer goods industry the consumerpackagedgoods cpg industrys growth over the past quarter century has been nothing short of exhilarating. Consumer packaged goods cpg the new consumer shopping journey 1. Feb 06, 2018 weve entered a new era for manufacturing, dubbed industry 4. Digital leaders frequently pluck talent from disparate sectors because they understand that digital competency matters more than sector knowledge in the early stages of transformation. Digital transformation council dtc for manufacturing. While cpg companies are usually adept at exploiting new trends, and although we are seeing some exciting innovations in the digital space.
The retail and consumer packagedgoods cpg sectors have seen such reversals in the past 15. In 2020, an uncertain economy serves as a backdrop for cp executives. Insight report shaping the future of retail for consumer. Most, however, appear to be hopping onto the bandwagon without understanding digital marketing. Reallocation is on the agenda at annual topmanagement workshops and regional strategy sessions. Digital is blurring the boundaries between consumers, stores and consumer brands. When researching and developing a new dishwashing liquid, they used modeling to predict how moisture would excite various fragrance molecules so that throughout the dishwashing process, you get the right fragrance notes at the right time. Six scenarios as global megatrends fundamentally disrupt business, retail and consumer companies are forced to reinvent themselves. Article the digital future of consumerpackagedgoods companies. The digital transformation of cpg and manufacturing. A recent forbes article features a success story by a global cpg company. Digital leaders make decisions based on data and build capabilities that connect people, processes, and technology across all channels that engage. If you know key trends, you get surprised less, you can anticipate more, and you can use whats happening in the world around you. Grocery stores make up the vast majority of sales within this channel.
When consumers can get what they want, when and where they want. This process of reinvention, which we are calling transformation, is far more complex than change management, which implies a single defined outcome. Digital transformation of industries dti is a project launched by the world economic forum in 2015 as part of the. Digital transformation is helping companies in the consumer packaged goods cpg industry streamline operations, increase business agility and gain deeper insights into their data. In collaboration with accenture consumer industries january 2016 the views expressed in this white paper are those of the authors and do not necessarily represent the views of the world economic forum or its members and partners.
Deloitte winning cpg business models research, 2015. Weve compiled cpg digital challenges and trends for this year. Both cpg consumer packaged goods and manufacturing industries face similar challenges. They are also enabling historic advances in materials, medical and manufacturing science, among many other areas. The drivers of digital growth have undergone a rapid and massive transformation where disruptors have created new business models based on an agile operating structure that successfully engages in a larger ecosystem by unlocking new sources of value. Digital transformation is the catalyst for growth the consumerdriven digital economy the consumer products industry has become the consumer outcomes.
Americans spent about 5% less on their food and beverage purchases in 2015 within the cpg industry than they did in 1984. Uslisted cpg companies, for example, have increased total returns to shareholders trs by an annual average of 10 percent over. Leaders will have to consider balancing the need to invest in technologies to keep up with increasingly empowered consumers and being financially prudent in their investment strategy. With automated decisionmaking, a multinational fashion retailer can manage markdowns in 30 countries with local pricing decisions. To help make sense of it all, we offer deloittes sixth technology trends report, our annual. Dec 06, 2015 3 strategic trends and 3 sets of technologies big data analytics, internet of things iot and artificial intelligence ai that will drive digital transformation for the balance of this. Dublin volkswagen auto parts dublin volkswagen pdf digital consumer. Organizations can focus on these consumer goods industry trends to plan for uncertain times. Cpg companies can drive profitable growth online, provided they are ready to adapt quickly. Today 89% of enterprises intend to adopt or have already adopted a digital first business strategy in order to truly transform their business. The digital transformation council seeks to enable industry, energy, and public sector professionals driving or impacted by digital transformation to keep abreast of the many emerging technologies and business trends, to learn from others on similar journeys, and to leverage these trends and technologies to achieve transformational growth.
With the digital consumer becoming pervasive, many cpg companies are exploring the digital channel. As for the most important factors for successful business digit al transformation, the com panys value and human factors were selected by. Jul 11, 2018 the cpg industry is one of the largest in north america. World economic forum white paper digital transformation of.
It is an ongoing initiative that serves as the focal point for new. Trends that will shape the consumer goods industry before assessing the trends of the future, it is worth asking what has driven the industrys extraordinary performance in recent decades. Aug 22, 2014 digital technologies empower change driven by consumer demand. Specifically, these competitors are using biodata to understand. This is much higher than the average price point for most cpg products, which is precisely why widespread proliferation of digital commerce has yet to occur. Jul 30, 2019 in the case of retailers, digital transformation of the dailyweekly decisions such as markdown management in fashion, purchase order management and store replenishment are the most common starting points. As the retail and cpg industries revolve around the empowered consumer, organizations will have to focus on certain critical priorities. Marketing for the digital consumer roadmap for cpg companies. According to suzanne white, the sheep year 2015 will be more mild and gentler to be alive in. The drivers of digital growth have undergone a rapid and massive transformation where disruptors have created new business models based on an agile operating structure that successfully engages in a. With very little online competition, cpg seemed untouchable by digital trends and buzzwords. World economic forum digital transformation initiative.
May 10, 2020 digital transformation for 2020 and beyond. Join this live webinar to learn how box platform can play a critical role in digitizing outdated processes such as partner onboarding and distribution. Instead, the truth is that the drivers of growth have undergone a rapid and massive transformation and traditional leaders are being left behind. The digital transformation initiative dti is a project launched by the world economic forum in 2015 as part of the system initiative on shaping the future. We enable disruptive business transformation through the fusion of newage digital technologies. Published on apr 20, 2015 absolutdatas ramakrishnan m in conversation with imran saeed director analytics as they discuss digital trends in. Digital savvy consumers, new entrants and new business models are upending traditional retail. This channel accounts for just 6% of the total sales which occur.
Myriad of new and existing trends will shape the cpg industry in 2016. Digital transformation is the catalyst for growth the consumerdriven digital economy the consumer products industry has become the consumer outcomes industry. Digital transformation of industries dti is a project launched by the world economic forum in 2015 as part of the future of the internet global challenge initiative. Circle the wagonsthe internet will account for about 50 percent of industry growth in the next few years. Growth in the future of consumer goods will require it. These forces are not just fueling innovation and giving rise to new business models. It is an ongoing initiative that serves as the focal point at the forum for new opportunities and themes arising. And its not just amazon thats blazing a digital cpg trail. Consumer packaged goods cpg stand directly in their path. However, to truly transform, internal operations and systems must be addressed. Accelerating digital innovation in consumer packaged goods cpg.
Accelerating digital innovation in consumer packaged goods. Digital transformation of industries consumer industries world. Digital transformation in consumer packaged goods cpg lti. If you know key trends, you get surprised less, you can anticipate more, and you can use whats happening in the world around you to thrive in work and life. See more ideas about digital, business case template and digital strategy. The digital future of consumerpackagedgoods companies mckinsey. To capture the value of e commerce, leaders are rethinking category strategy and management in three areas. Jan 16, 2017 weve compiled cpg digital challenges and trends for this year. Technology is changing our life, and people are using technology to know, do, and be more.
Build, drive and earn ecommerce growth for retail success ecommerce is a key digital pillar for cpg strategy. Weve entered a new era for manufacturing, dubbed industry 4. With access to a range of new technologies and a wide variety of online resources, consumers are using various channels to search for product information while shopping. Digitalsavvy consumers, new entrants and new business models are upending traditional retail. Gear up now for a year of growth 77 times and trends exhibit 4 even the 10 largest cpg categories are challenged for solid growth, though inflation and declining merchandising activity are. This transformation touches every group within the company and will require the full commitment of employees at all levels. Dec 06, 2017 major trends and drivers pushing digital transformation in retail, consumer goods, and the manufacturing industry how box platform makes it easy to securely share confidential information between your partners all within your own custom web portals and mobile apps. Five not so easy steps to cpg digital transformation.
World economic forum white paper digital transformation of industries. Times and trends taking stock of cpg past and future. The project supports the broader activity of the forum around the theme of the fourth industrial revolution. Below are six mustfollow trends that will help cpgs connect with millennials. Consumer packaged goods cpg industry 5 digital transformations published on may 23, 2015 may 23, 2015 238 likes 20 comments. The winners will be those who have recognised these trends and are building agile organisations capable of delivering a consistent profitable proposition in a multichannel way. Digital marketing is not merely about having a presence on facebook and following up on twitter. Dec 21, 2017 generating revenue, directly or indirectly, hasnt been the responsibility of chief information officers cios at consumer packaged goods cpg companies. Trends in online transactions and consumer disputes. White paper digital transformation initiative aviation.
Jul 28, 2016 consumer packaged goods cpg the new consumer shopping journey 1. Trends, opportunities and challenges trends and challenges for the digital consumer. Digital transformation isnt as simple as implementing one specific tool or technology it is a journey that impacts every area of your organization. While there was a time that cpg brands were firmly attached to the local brick and mortar shelves, new trends are changing the industry and affecting the distribution and transportation of goods. But the longterm benefits of digital solutions, which will usher in a new era of manufacturing efficiency, more than justify the effort. How does a digital transformation apply to supply chain planning. In the digital realm, brands can see an array of con. Consumer packaged goods cpg the new consumer shopping. Prior to this fourth major transformation in modern manufacturing, there was the lean revolution of the 1970s, the outsourcing trend of the 1990s, and the automation boom that began in the 2000s. How technology is revolutionizing the integration of unstructured data by onyeka. Major trends and drivers pushing digital transformation in retail, consum.
In the cpg sector, digital is rapidly approaching a tipping point where emerging winners make an aggressive break from the pack and create toughtobeat leadership positions. Several trends offer growth opportunities in 2016 and beyond. Embracing digital transformation in retail, cpg, and. But the digital transformation journey is not an easy one. This holds major opportunities for consumer packaged goods cpg companies prepared to radically reshape for the digital worldand clear risks for those who fail to. Revamping your business through digital transformation. Six trends cpg brands must embrace to win with millennials. Generating revenue, directly or indirectly, hasnt been the responsibility of chief information officers cios at consumer packaged goods cpg companies. Digital transformation is connecting billions of people worldwide, empowering consumers and enabling consumer packaged goods cpg companies to manage the enterprise more effectively and efficiently to drive growth. May 23, 2015 consumer packaged goods cpg industry 5 digital transformations published on may 23, 2015 may 23, 2015 238 likes 20 comments.
Consumer packaged goods cpg the new consumer shopping journey. The cpg industry is one of the largest in north america. Consumer packaged goods the new consumer shopping journey 2. Marketing for the digital consumer roadmap for cpg.
Digital business revamping your business through digital transformation to gain the most business benefits from todays digital technology, it pays to question key managerial assumptions. George westerman didier bonnet revamping your business through digital transformation to gain the most business benefits from todays digital technology, it pays to question key managerial assumptions. The digital thread ties product information, decisions, and history together in a structured, integrated way that captures product innovation, offers insights during. The digital future of consumerpackagedgoods companies.
Our 2020 consumer products industry outlook explores industry 4. The road to 2025 6 cpg at the ipping point ow brands can in in the ew routes to arket knowing consumers and engaging oneonone with them represents power for brands and rocks the timehonored model of working through retailers as the middleman. Connected consumers are driving a revolution in the cpg industry. Considerations for business, regulators and policymakers. How does a digital transformation apply to supply chain. Retailers must come to grips with the evolution of new customer groups, including things, and. In a sector where growth has depended on brand strength and mass marketing, cios have played a corporate technology role behind the scenes. Business model innovation in consumer goods deloitte. Top 5 technology trends 8 reimagining reimagining everything. Which trends looked years away from the mainstream but now feel primed to become totally.
Apr 20, 2015 published on apr 20, 2015 absolutdatas ramakrishnan m in conversation with imran saeed director analytics as they discuss digital trends in cpg emerging markets category. Top 6 retail analytics trends of 2017 by jeff huckaby, segment director, retail and consumer goods, tableau software nyse. Last year, the top 25 us food and beverage companies drove 45% of category sales, but only. The digital transformation initiative dti was launched by the world economic forum in 2015 to serve as the focal point for newopportunities and themes arising from the latest developments in the digitalization of business and society. Digital transformation for the insurance industry 5 figure 3.
Eretail is a phenomenal growth lever, and firms are beginning to realize its potential as a powerful. Posted by asena denizeri on july 30, 2019 no comments. Stop thinking about digital experiences just as tools or. According to the 2018 gartner cio survey, growth 44% far outpaces digital strategies 15% as a business priority for retailers reacting to the threat. Shaping the future of retail for consumer industries weforum. Cpg companies have launched innovative products to meet an evergrowing array of human needs and desires.