What do you see as the biggest challenges facing CPG at the moment?
[AR]: The CPG industry is a highly competitive marketplace with well-established players and disruptive startups competing for market share. This gets tricky due to ever-changing customer expectations influenced by health and ethical considerations. Companies not only need to constantly innovate to keep up with the competition and meet customer expectations but also worry about increasing costs because of the fluctuating prices of raw materials and transportation. The cost increase is further compounded by customer expectations of sustainable packaging, responsible sourcing, and eco-friendly practices. The post-COVID economy of increased inflation and supply chain disruptions due to the Ukraine war has not helped. Finally, the increased adoption of digital commerce channels has mandated companies to continuously invest and innovate to provide personalized buying experiences to their customers.
Which key trends and innovations will have the strongest impact on CPG?
[AR]: One of the biggest trends is a direct-to-consumer strategy (D2C). D2C allows CPG brands to reach consumers directly and bypass traditional retail channels giving them greater control over customer relationships and data, as well as the ability to offer personalized shopping experiences. Leveraging AI and data analytics to understand customer preferences and shopping patterns will be key to providing customers with personalized products and targeted marketing campaigns. At the same time, providing subscription-based services and membership programs increases brand loyalty and customer retention. In addition, increasing the overall brand appeal by exploring innovative packaging solutions for products that prioritize convenience and sustainability is an ongoing trend to create a niche in the CPG industry.
What strategies do you recommend for CPG companies to market and sell their products through digital channels effectively?
[AR]: To effectively market and sell their products through digital channels, CPG companies need to implement a strategy that combines experience, technology, and data effectively. The strategy should include the following:
- 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?
[AR]: Trika is a team of digital practitioners and industry experts with roots stretching back to the earliest days of online commerce. We dedicate ourselves to serving our client companies by utilizing domain expertise, cutting-edge technology, and innovative transformation services so our clients stay ahead of the curve. Our approach to transformation is based on the conscious Intent to delight customers through continuous Insight and creative Innovation with an enduring culture of problem-solving.
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.
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?
[AR]: AI has significant potential to revolutionize the Consumer Packaged Goods (CPG) industry across various aspects of operations, marketing, and customer engagement. Here are some key areas where AI can make a substantial impact:
- 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?
[GTCMES]: The global manufacturing sector (including CPG) has recently undergone a tremendous upheaval – from supply chain disruptions, commodity price increases, and labor shortages. As a result of this disruption, manufacturing organizations have responded by:
- 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?
[GTCMES]: The shift towards online shopping, where businesses prefer to research products and purchase online without ever interacting with a salesperson, is a big shift.
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.
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?
[GTCMES]: With governments imposing different types of tax regulations and requirements at each stage of the supply chain, CPG manufacturers must pay close attention to ensure that they comply with tax laws while reducing costs and complexity at each stage.
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.
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?
[GTCMES]: Vertex Inc. is a leading global provider of indirect tax software and solutions. Our mission is to provide customers with the most trusted tax technology, enabling global businesses to transact, comply, and continue to grow with confidence. Vertex offers industry-specific solutions for key indirect tax categories such as value-added tax, goods and services tax, and sales and consumer use tax.
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
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?
[GTCMES]: Currently, businesses around the world are leveraging advanced platforms and tools to add efficiency and deliver automation to streamline processes and reduce the risk of human error. This is a key driver for tax automation, which leverages these tools to determine the right tax rates and rules to apply to every transaction. Combining this with advanced commerce platforms, which can deliver dynamic offers, pricing, and packaging, can enable businesses to deliver more personalized commerce experiences. And ultimately can help to drive increased customer satisfaction and loyalty, while reducing costs and increasing margins.
What do you see as the biggest challenges facing CPG at the moment?
[AM]: In the CPG industry, products move fast and not just in shops. Behind the scenes, products are always in development or at different stages of their lifecycle. This means juggling multiple strategies and campaigns, and keeping on top of frequently changing products, images, prices, and descriptions. Some of the biggest challenges facing the industry include
- 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?
[AM]: Product personalization, direct-to-consumer upstarts, private label brands, metaverse, social media, and sustainability will have the strongest impact on the industry.
- 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?
[AM]:
- 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?
[AM]: Headquartered in San Jose, CA, SkillNet Solutions is a leading provider of consulting, engineering, and system integration services. We help CPG enterprises modernize their omnichannel touchpoints to better engage and transact with their end customers. SkillNet collaborates with top industry players like Spryker to deliver modern commerce solutions. These solutions are composable, cloud native, and headless.
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.
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.
What do you see as the biggest challenges facing CPG at the moment?
[VCB]: packaging and transportation, with products consumed very frequently, and factories using and producing goods for the whole world, the overall impact on the environment is huge. All CPG companies need to get extremely serious about it and act truthfully. The time is ticking, the responsibility is unavoidable and consumers smell greenwashing right away, changing their purchasing decisions accordingly.
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.
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?
[VCB]: In terms of Food, it has been amazing to see how there have been so many advancements in plant-based alternatives in the last few years, with startups flourishing everywhere and being acquired by the biggest CPG players in the market. There’s still a long way to go, but the numerous food solutions being developed and the shifting consumer behaviors make me feel optimistic about a more sustainable future in the industry.
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.
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?
[VCB]: I believe there’s been a misconception of “e-commerce” in the CPG world. There’s been a reductionist view on it as an exclusive DTC option, a careless approach to defining its value proposition vs. other channels, weighting its operational challenges and the overall viability of the business model. We’ve seen many DTC startups collapsing over the last months and many big players failing to implement successful initiatives for these reasons.
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.
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?
[VCB]: The breadth of opportunities and the velocity to address them are of the essence here. Having a flexible tech stack that allows you to test, learn and iterate fast in as many different transactional business models and sales channels as possible is critical, together with a best-of-breed capability that guarantees your Total Cost of Ownership is future-proof.
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.
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.
What do you see as the biggest challenges facing CPG at the moment?
[DS]:
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?
[DS]: Streamlining and optimizing shipping, logistics, and E-procurement through a buy-side marketplace has become critical to manage profitability, mitigating supply chain disruptions, and providing seamless visibility to the customer into inventory levels and into every step of the supply chain.
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.
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?
[DS]:
- 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?
[DS]: At Qnovate, we deliver end-to-end e-commerce solutions tailored for the CPG industry spanning from Assessment through to Implementation and on to Governance & Monitoring. We have a team with incredibly strong Consumer Goods domain expertise which enables us to deliver customer experience solutions that are highly configured for the CPG industry. In addition, we have full ERP and EAI practices which enables us to deliver integration of the e-commerce platform to backend ERP, Supplier, and Logistics solutions and tools.
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!
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!
What do you see as the biggest challenges facing CPG at the moment?
[AL]: Our CPG customers are facing many issues. Most notably affecting the industry is supply chain disruption, growing demand for sustainability and environmental responsibility, and of course, a drive for digital transformation. The global pandemic exposed vulnerabilities in supply chains, leading to severe delays in sourcing raw materials and impacting manufacturing processes, and distribution channels. Customer demand for environmental sustainability has grown, pushing CPG manufacturers to adopt new business practices to meet and demonstrate environmental awareness.
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.
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?
[AL]: Innovations in the CPG space have been slow, compared with other industries, but we see this changing. Our clients have been empowering their businesses by expanding their e-commerce footprint into new channels, expanding e-commerce capabilities, and by leveraging data analytics. Their channel expansion has expanded into direct-to-consumer, improvement of their B2B e-commerce, self-service, and Configure, Price, Quote (CPQ), enabling self-managed or selling through third-party marketplaces. This channel expansion is only possible with new technologies; composable technologies have started to be a strong consideration to enable them to ‘turn on’ smaller capabilities without disrupting their whole technology ecosystem.
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.
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?
[AL]: CPG companies need to continually adapt to the changing needs of their customers, both end consumers and businesses. Just like advanced B2C retailers have done for years, they need to truly understand their customers, leverage as much data as they have, and continually get more to give them a complete picture of their customer lifetime experience. Notice that I am not saying Customer Lifetime Value, the experience leads to value, and in my mind, it is the true driver of revenue. For every customer who does not trust your brand because they had a bad experience, your average CLV will be negatively impacted.
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.
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?
[AL]: CriticalRiver offers comprehensive solution development using an offshore, near-shore, and on-shore model across many technologies that CPG manufacturers need. We have built comprehensive CRM, CPQ, AI, Data Analytics, and B2B e-commerce solutions for our CPG customers. We work as an integrated global team to help our customers achieve their digital strategy goals in a very complex technology evolution environment. Through our partnership with Spryker, we expanded our footprint to add their comprehensive composable platform, which enables us to dramatically expand our offerings to our customers to empower them to expand into other channels like B2C or marketplaces, optimize their customers’ experiences, track and report against all their interactions and data, and to evolve these technologies using the Spryker composable approach.
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.
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.