The Future of CPG and Digital Commerce, According to 6 Expert Voices
Beneath the wrapping: uncover exclusive expert insights in Consumer Packaged Goods to stay ahead
Consumer behavior has changed more in the past five years than it has in the past 50, and much of that is related to new developments in technology and how it impacts our daily lives. CPG manufacturers must be digitally mature and ahead of the ever-evolving market landscape to win the digital shelf and stay competitive.
Alongside technological advancements such as AI and automation, sustainability and ongoing supply chain disruptions are also prominent topics in the industry. What else should CPG executives look out for? How will these trends develop? We’ve asked six industry experts to give us their opinions. Read on to find out how your CPG business can stay ahead.
Anubhav Raina
President & CEO at Trika Technologies Trika Technologies WebsiteWhat do you see as the biggest challenges facing CPG at the moment?
Which key trends and innovations will have the strongest impact on CPG?
What strategies do you recommend for CPG companies to market and sell their products through digital channels effectively?
- Utilize data analytics and AI to gain insights into customer behavior, preferences, and trends to optimize marketing campaigns, product offerings, and pricing strategies.
- Tailor the e-commerce store based on insights to provide personalized shopping experiences, targeted recommendations, optimized promotions and discounts to incentivize customers to choose products over competitors.
- Continuously innovate to provide fast product discovery and checkout with multiple fulfillment options. This requires leveraging a headless e-commerce technology platform that can be customized to business needs. The platform should also be able to scale and seamlessly integrate with other enterprise systems.
- Increase customer acquisition through social media and influencer marketing tools for reaching and engaging consumers. Strengthen customer retention by providing loyalty and membership programs.
What do you offer companies in CPG, and why is Spryker the right partner for you?
Trika partners with Spryker to provide robust solutions to CPG brands and retailers. Spryker is an API-first Composable Commerce platform that can provide scalable and robust solutions to complex business problems in the CPG industry with quick time to market. Spryker provides modular solutions with strong capabilities for B2C, B2B, and marketplace business models.
What potential do you see for AI in CPG? And what role can your product or service play in this?
- Demand Forecasting and Inventory Management: AI-powered algorithms can analyze historical sales data, market trends, seasonality, and external factors to predict demand more accurately. This enables CPG companies to optimize inventory levels, reduce stockouts, and minimize overstocking, leading to cost savings and improved customer satisfaction.
- Personalization and Customer Insights: AI can analyze vast amounts of customer data to gain deep insights into individual preferences and behavior. This information can be used to deliver personalized product recommendations, targeted marketing campaigns, and customized offers, enhancing customer engagement and loyalty.
- Supply Chain Optimization: AI can optimize supply chain operations by predicting potential disruptions, optimizing logistics routes, and enhancing overall efficiency. This technology enables CPG companies to respond quickly to changing demands and ensure a more resilient and agile supply chain.
Gunjan Tripathi, C.T.A., M.Sc., E.M.B.A. Scholar
EMEA Director, Solutions Marketing at Vertex Inc. Vertex Inc. WebsiteWhat do you see as the biggest challenges facing CPG at the moment?
- Expanding globally (scaling data, operations, and infrastructure accordingly).
- Embracing e-commerce and implementing digital platforms to make it easier.
- Selling a wider variety and volume of services to a broader set of customers.
- Adopting cloud-based solutions to reduce costs and maintenance, compared to on-premises solutions.
Which key trends and innovations will have the strongest impact on CPG?
Cloud-based technology is gaining popularity in these industries because it offers cost savings, easier integration between existing applications, and the potential to make better strategic use of data.
Cloud-enabled platforms that can provide scalable, flexible, and easy-to-implement commerce solutions at a competitive price, for even the most sophisticated business models, will be the winners as global businesses continue their digital transformation journeys.
What strategies do you recommend for CPG companies to market and sell their products through digital channels effectively?
It is critical that leaders fully understand their tax obligations and that those obligations are adequately reflected in the data capture, pricing, and logistics determination; and processed consistently across all of their critical transactional systems. Given how tax requirements can vary greatly by geography, organizations with extensive areas of operation can quickly become weighed down by the scope and complexity.
What do you offer companies in CPG, and why is Spryker the right partner for you?
Integrating the combined solutions offered by Spryker with Vertex will enable organizations to keep up with multiple digital commerce needs as well as ever-changing global tax and regulatory requirements.
Manufacturers, wholesalers, and distributors can seamlessly tap into the combined power of Spryker and Vertex solutions to digitize their entire P2P, O2C, intercompany, and even transactional tax process, enabling them to:
• Streamline tax and IT operations to increase productivity
• Reduce risk associated with audits
• Accelerate business scalability
What potential do you see for AI in CPG? And what role can your product or service play in this?
Anurag Mehta
Chief Executive Officer at SkillNet Solutions SkillNet Solutions WebsiteWhat do you see as the biggest challenges facing CPG at the moment?
- Marketing
- Omnichannel marketing
- The CPG sector is characterized by high competition and low brand loyalty. This means marketers need to work hard to differentiate their products. Promotions and packaging need to appeal to customers and stand out from the crowd - both in-store and online.
- Data, personalization, and the post-cookie world.
- There are also ever-changing marketing and sales channels to explore. Like creating B2C content to engage customers on social media, launching D2C channels to shortcut your route to market, or developing an app to keep distributors on board and on-brand.
- Coupled with inflationary pressures, disruption of the supply chain due to political turmoil and pandemic and cautious spend.
- Localization and distribution
- Distribution is a challenge, especially across multiple global markets. Not only can this mean localized packaging (particularly for foodstuffs), but also B2B efforts to recruit distributors and give them the tools they need to sell your products.
- Loyalty and competition
Which key trends and innovations will have the strongest impact on CPG?
- Social Media
- Influencers are launching their own DTC brands which are becoming successful
- Social Media Shopping is becoming mainstream. So, quickly integrating e-commerce into social media platforms is important for consumer brands. With social shopping, consumers can buy items without needing to go through an entire checkout funnel.
- Food And Beverage DTC are also gaining momentum as GenZ orders online.
- Increased competition within categories.
- Flexible payment methods
- Customers are looking at Buy Now Pay Later options. Cash on Delivery (COD), credit and debit cards, PayPal, and Buy Now, Pay Later (BNPL) services are important for GenZ shoppers.
- Go All-In with Subscription Pricing
- Private labels - Consumers are buying more private-label products. One example of this is Amazon’s private-label clothing brand, Goodthreads, which is competing with big brands like H&M, Levies, and Uniqlo.
- Omnichannel sales are growing
- Self-care products are booming
- Plant-based products are on the rise
- CPG brands are spending big on marketing
What strategies do you recommend for CPG companies to market and sell their products through digital channels effectively?
- Invest in Social Commerce
- Provide personalized experiences
- Focus on the mobile shopping experience
- Go local for global sustainability
- Push subscription-based products to drive retention
- Go offline to build brand awareness
- Get expert influencers onboard into your brand
- Connect with customers at multiple touchpoints
- Master inbound and outbound logistics to gain a competitive edge
- Build partnerships
- Access new audiences: By partnering with another brand, CPG brands can tap into the partner’s customer base and reach a new audience.
- Increased brand credibility: When two brands partner together, it can increase the credibility of both brands in the eyes of consumers.
- Cost-effective marketing: Co-marketing campaigns can be more cost-effective than traditional marketing efforts because they allow brands to share the costs of marketing. This can be especially beneficial for smaller CPG brands with limited marketing budgets.
- Increase customer loyalty: By providing customers with a wide range of products and services, Retail & CPG brands can increase customer loyalty and encourage repeat purchases. Co-marketing partnerships can help brands to expand their product offerings and keep customers coming back for more.
What do you offer companies in CPG, and why is Spryker the right partner for you?
With a track record spanning over two decades, we have partnered with leading brands across North America, EMEA & LATAM to deliver unparalleled customer experiences and drive growth.
Spryker has been ranked as #1 in Composable Commerce capabilities. Its products are known for flexibility, abstraction of the underlying complex process, and data synchronization. We believe that our partnership with Spryker allows us to provide a sophisticated platform that is highly composable and supports all business models. It has reference store implementation for all the above models.
Victor Clar Bononad
Senior Business Consulting Specialist at Spryker GmbH Spryker GmbH WebsiteWhat do you see as the biggest challenges facing CPG at the moment?
Besides this absolute top priority, everyone is still experiencing supply chain issues, rising inflation, and shortage of raw materials - though there’s been a mild improvement, in the context of war and global instability we are facing, brands need to be extremely careful. Cost management and providing customers with enhanced value for their money are key in the short-to-mid term in order to keep having healthy business results in such a volatile scenario. Investing in the digitalization of the sales channels and streamlining operations can certainly help to be more efficient and provide a better customer experience.
Which key trends and innovations will have the strongest impact on CPG?
For other verticals within CPG, particularly health care, I’m confident hyper-personalization will eventually take a much bigger portion of the market. By this, I mean completely customized products to your specific hair or skin needs, for example, which will certainly become a very relevant segment, especially for upmarket brands. We are already seeing this with a handful of brands (big and small) all around the globe, and although it is not easy to do this one-to-one product offering at scale, technology is the key enabler and we’ll start seeing this trend in many more categories.
Lastly, Conversational Interfaces combined with Artificial Intelligence. You now have chatbots, Alexa, Siri, or Google Assistant everywhere, interacting with consumers in many new ways and channels, innovating in all types of customer touchpoints. This will only explode in the coming months, integrating them with the latest AI tools, so… How will CPG brands be able to keep their products Top of Mind (or Top of Voice?) if traditional advertising or SEO don’t apply? There’s another advertising revolution (or should I say “crisis”?) in the making.
What strategies do you recommend for CPG companies to market and sell their products through digital channels effectively?
E-commerce must be considered the flagship of digital transformation. When you start digitizing your company’s sales channels (not only Direct-to-Consumer), you will start seeing
cost optimizations everywhere and an inflow of data that will allow your business to make better decisions faster. But all this dramatic change in the organization requires strategic thinking, careful planning, and stakeholder management (fear of change much?), with a serious investment in technology and team capabilities.
There’s no silver bullet: all markets, categories, and brands/products are different, but the single key in the on- & off-line CPG space is to have an omnichannel strategy: diversify your routes-to-market, increase customer reach, adapt your offering and value proposition to cater the peculiarities of each channel, digitally enhance each step along the way. You’ll need to leverage that data to improve and analyze individual channel performance and how they complement each other in a more holistic way.
What does Spryker offer companies in CPG?
There’s nothing better than Spryker being the centerpiece of such a paramount challenge. But you’ll only get the most out of it, building exceptional competitive advantages, if your company truly embraces agile ways of working top-down and operates in such a manner bottom-up. At Spryker’s Business Consulting, we are excited to take up this challenge with you, helping you and your company achieve success beyond technology.
Deepak Suri
CEO & President at Qnovate Qnovate WebsiteWhat do you see as the biggest challenges facing CPG at the moment?
One of the biggest challenges that CPG companies are facing is that although the pandemic resulted in significant e-commerce sales for consumer goods manufacturers, this increase has also created some newfound challenges around supporting and facilitating that growth through scalable, robust yet intuitive e-commerce platforms; platforms that allow for new and optimized ways to engage with new and existing consumers directly.
Another challenge is that CPG companies are only optimized for scale in retailers and dealers, rather than diversification and dispersion throughout a multitude of channels. Diversification is required today to enhance the multi-pronged digital engagement with end customers. As a result, many CPG companies are struggling to keep up with the growing and changing market demands and dynamics.
Furthermore, to the need for diversification, it’s essential for CPG companies to build strong omnichannel solutions for direct and indirect consumers in addition to existing relationships with retailers/wholesalers and dealers. The e-commerce platform should be able to handle both business-to-business (B2B) and business-to-consumer (B2C) scenarios.
Small independent stores are often a key channel for CPG companies and yet there’s traditionally been poor visibility and integration at this level. There has been a lack of proper e-commerce technology to support these types of end customers, e.g., creating an ordering system for a large independent store mainly using a browser or mobile device. With the fragmented and siloed systems used by these independent stores, there is a lack of consumer intelligence and data for the CPG companies. They must rely on the stores to share any end consumer data and intelligence.
CPG companies have always faced fierce competition, however now that many of the traditional online retailers like Amazon, Walmart, and Target have launched their own private-label consumer products, they are facing increased competition. These private-label brands offer everything from cleaning to baby products to grocery items and household essentials. They’re comparable to traditional CPG brands in quality, price, and ease of access.
Which key trends and innovations will have the strongest impact on CPG?
To stay competitive CPG manufacturers will have to offer additional complementary third-party product lines and services through their marketplace. This would mean that some CPG companies will have to embrace multi-brand marketplaces with offerings from other independent brands available in their existing marketplace.
What strategies do you recommend for CPG companies to market and sell their products through digital channels effectively?
- Build a Multi-Brand Marketplace that will combine your current brand offerings with offerings from other brands.
- Build a B2B2C business model that enables the extension of sales to direct consumer channels in addition to existing dealers without causing any negative impact to dealer engagement.
- Build a next-generation e-commerce platform with Buyer-side and Logistics partner integration to seamlessly deliver the supply chain experience at every step.
- Integrate small independent store front-ends through your e-commerce platform to streamline their processes. This will in turn provide the CPG manufacturer with useful customer behavior data that will help them fine-tune their product portfolio and deliver personalized customer experiences tailored to their buying needs and preferences.
What do you offer companies in CPG, and why is Spryker the right partner for you?
When we first engaged with Spryker we had already been involved in implementing and supporting e-commerce platforms for many years. We found Spryker’s approach to the market and technology to be far beyond what the traditional players in this space were doing. Spryker’s modular, scalable, and customizable commerce stack and next-generation cloud capabilities really solidified the partnership. Given the latest Magic Quadrant for Digital Commerce report, Gartner suggested that “against its competitors, Spryker ranks first for composable commerce and in the upper mid-range for the B2C commerce, B2B commerce, and B2C and B2B commerce on the same platform use cases.” Based on analyst reports and more importantly the positive feedback direct from satisfied and successful Spryker customers, Qnovate is proud to be a Spryker partner and part of the Herd!
AJ Leale
Senior Technical Solution Engineer at CriticalRiver CriticalRiver WebsiteWhat do you see as the biggest challenges facing CPG at the moment?
We see CPG manufacturers having a strong focus on digital transformation, and having many challenges in adapting advanced technologies such as AI and, IoT, etc., and while facing a dramatic shift in technologies needed to streamline their e-commerce and customer engagement for end consumers and business customers. Forrester, in their Q1 2023 Global State Of Brand Manufacturers Survey, echoes a similar view, “93% of decision-makers surveyed said that digital transformation had become a growing area of focus, and 90% agreed that digital sales had become a priority.” These challenges are further impacted by the proliferation of more and more available data, which requires them to adapt massive data analysis tools so they effectively leverage it to remain competitive. As a result of these many factors, digital transformation is very difficult for large CPG companies.
Which key trends and innovations will have the strongest impact on CPG?
By layering AI onto their data analytics, they gain additional insights to drive a better, more targeted, customer experience. The impact of these improvements allows them to work smarter to better analyze large datasets and make data-driven decisions in product development, marketing, and supply chain optimization.
When these new insights are acted upon, and combined with new e-commerce experience capabilities, they are able to give their customer an improved purchase experience, for
example by adding the ability to see and customize products, or create bundles targeted to their purchase needs for easier ordering and better savings.
What strategies do you recommend for CPG companies to market and sell their products through digital channels effectively?
To meet this strategy, CPG manufacturers must create an agile digital ecosystem that drives better customer understanding, enables them to quickly adapt to changing customer needs, innovate faster than they have in the past, and, most importantly, use these new customer insights and technologies to forge stronger customer connections and brand loyalties. Their technology strategy must evolve to contain superior data analytic insights optimizations, leveraging AI where possible, expand their channel footprint, adapt to use customer marketing, engagement, and social tools, as well as inclusion of customer loyalty programs. In other words, many of the same tools as the B2C retail leaders have used to reach and cultivate their customers. As a result, their direction will either include composable solutions, a best-in-breed approach, or, less likely, a totally customized technology stack.
What do you offer companies in CPG, and why is Spryker the right partner for you?
Through Spryker’s innovative composable commerce platform, we are able to overcome the unique challenges faced by CPG manufacturers by offering a flexible, modular solution that can be tailored to individual business needs. Using Spryker’s headless architecture and API-based integrations, CriticalRiver has built headless storefronts for US customers and has built
a Salesforce CRM / CPQ connector that allows management of Spryker e-commerce quoting on the Salesforce Sales Cloud.
About Spryker
Spryker is the leading composable commerce platform for enterprises with sophisticated business models to enable growth, innovation, and differentiation. Designed specifically for sophisticated transactional business, Spryker’s easy-to-use, headless, API-first model offers a best-of-breed approach that provides businesses the flexibility to adapt, scale, and quickly go to market while facilitating faster time-to-value throughout their digital transformation journey. As a global platform leader for B2B and B2C Enterprise Marketplaces, Thing Commerce, and Unified Commerce, Spryker has empowered 150+ global enterprise customers worldwide and is trusted by brands such as ALDI, Siemens, Hilti, and Ricoh. Spryker was recognized by Gartner® as a Visionary in the 2023 Magic Quadrant™ for Digital Commerce and was also ranked as a Strong Performer in The Forrester Wave™: B2B Commerce Solutions, Q2 2022. Spryker is a privately held technology company headquartered in Berlin and New York. Find out more at spryker.com