Seven areas to consider in a post-COVID world for CPG companies: part 2
If you missed the first part of this blog click here.
Despite all the negative impacts that COVID has created, it has provided opportunities for transformation. In addition to supply chain resilience, embracing technology for demand forecasting and continuing cost realignment opportunities.
1) Digital differentiation
The pandemic certainly accelerated the digital transformation. From restructuring teams to implementing scenario tested response plans, many companies now have new ways to operate in an agile environment. This approach can now give companies the opportunity to digitise their development process.
With continued lockdowns and consumers slowly returning to public spaces a majority of retailers expect to see a continued increase in demand for digital engagements throughout 2021.
Many retailers are planning major investments in technology from planning, to e-commerce. Companies should accelerate or launch opportunities that support at-home consumption, evolving shopping missions, or repeat purchase. On the other hand, retailers who have streamlined their product lines should reconsider line extensions. Companies should consider breakthrough innovation ahead of line extensions, only devoting resources when necessary with clear and measurable goals.
The major focus will be on consumer data, understanding preferences and future trends.
2) Proactive customer management
Companies shaping demand through a more proactive customer approach, have shortened the planning cycle to weekly intervals and involved senior leadership for faster decision making on product allocation and substitutions. Leaders have adapted their ordering policies, rationalised SKUs, offered customer incentives to ensure full-truckload shipping and where possible, direct from plant shipments.
Additionally, by targeting consumer needs to cross all touchpoints and include personalised point of sale marketing will maximise the brand’s relevance.
3) The future of work
Following the pandemic, many CPG companies stood up to new ways of working within weeks. From restructuring teams to implementing scenario-tested response plans, many CPG companies now have new proof points for how to operate an agile organisation.
Some estimates conclude that more than 20 percent of the global workforce (in high skilled jobs such as finance, insurance and IT) could spend a majority of its time working remotely while being just as effective. Advances in automation and digitisation have made it possible, the pandemic just accelerated the situation.
Businesses will need to decide on the role of the office itself, which has traditionally been the hub for creating culture and a sense of belonging. The other challenge has to do with adapting the workforce to the new requirements of automation, digitisation and other new technology.
4) Global versus local operating model
Some CPG companies have realised that, after losing ground to more locally relevant competitors, that a global one-size-fits-all model doesn’t work. Recently, CPG companies have reinvested in local talent and decision rights in priority growth markets. With the local GM owning the game plan for winning in the market and positioning them as lead markets for understanding consumers and channels in the region or subregion.
Instead of driving innovation out of global R&D centres, they identify innovation needs by the local market. Then they form a cross-functional team within days, fast-track funding, and, with the help of global R&D capabilities pulled into the process, develop a marketable product in weeks, rather than years.
This operating model uses technology and digitises wherever possible, from automating standardised tasks in HR, finance, and IT to supporting the decision-making of signature roles, such as equipping brand managers with KPI and consumer insights dashboards. As well as establishing a high-profile, institutionalised sprint process that identifies, resources, and sponsors new capability-building and other priorities across the business in short-burst cycles.
For further information, including details on the changing consumer trends and how connected planning can help, download our full whitepaper.
In our final blog of this series, we’ll be exploring the role of planning and real-time insight, so keep an eye on our social channels where we’ll be publishing details.