The COVID-19 pandemic came as a bolt from the blue in 2020, impacting lives, livelihoods, and businesses. However, it also came with learnings for organizations – learnings that are reshaping the business paradigm for good. For one, organizational leaders now accept that their digital transformation initiatives were not mature enough to handle a global disruption of this scale. As a result, they have shifted their immediate focus to holistic digital transformation in order to bounce back from the abyss, safeguard their future interests, and rapidly adapt to the new normal. This shift in priorities, initially posed challenges galore, but is now offering fresh opportunities to reinvent operating models. The Retail and CPG industry was particularly susceptible to a disruption of this nature, but the new normal has opened new avenues for this fast-moving industry.
Cloud Computing: Enhanced Consumer Experience at Reduced IT Costs
The Retail and CPG industry is known to be innovation friendly, but the pandemic showed that even the retail giants were not digitally prepared to take on a disruption of this nature. The first casualty of the pandemic was the global supply chain, bringing production and distribution of goods to a grinding halt. Supermarket stands ran dry due to supply chain disruption as well as panic buying. The retail and CPG organizations had to think and act fast to turn around their fortunes. Companies such as Amazon benefited from their continued focus on digital transformation and cloud-based business model. Soon, retailers small and big wanted to follow suit with cloud adoption.
While most retail organizations had been investing in their digital transformation initiatives for years, not all of them were up to pace. The pandemic accelerated these initiatives with organizations desperately looking to survive and then turn around. One of the first things to have come out of this situation was for industry leaders to adopt evolutions such as cloud computing, big data, and analytics. With customers apprehensive about leaving the safety of their homes, conducting business online was the only way. But, this also implied additional pressure on their IT infrastructures and processes. They required end-to-end digitization immediately, and the primary need was to move IT workloads and customer interfaces to cloud-native environments. By adopting cloud technologies, the retail companies quickly saw value in the form of driving efficiencies in the supply chain, elevating consumer experience, and cutting-edge integration of tried-and-tested but legacy applications.
Cloud migration is the most sensible decision. It reduces IT costs remarkably, meaning that retail organizations can bounce back faster from their 2020 difficulties and also allocate more funds to experiments and innovations, especially in the fields of Artificial Intelligence (AI) and Machine Learning (ML). Improved agility offered by cloud computing solutions translates to quicker completion of projects and faster time to value. Cloud migration has helped retail companies set up digital customer assistance centers and logistical chains within days, resulting in healthier revenue streams and enhanced consumer experience.
Infrastructural Growth: Digitized Stores, Warehouses, and Supply Chain
Along with cloud migration of the workloads, retail companies also recognized the need to thoroughly digitize their on-premise operations. The new normal dictated physical distancing, reduced use of workforces, and overall safety of human resources. So, from being an industry that thrived on human interactions, much of the workload now had to be entrusted to machines. It is fair to say that the new normal demands a seamless synergy between humans and machines to unlock new business frontiers and retailing experiences. With the help of emergent technologies such as Internet of Things (IoT), Augmented and Virtual Reality (AR/VR), and enterprise-wide automation, retail and CPG organizations are not only compensating for the lack of hands on the factory floor, but are actually getting more from less.
The new paradigm of the retail business is witnessing both workforces and consumers operating from home, doing business virtually over computers and smart devices. This has given rise to new-age delivery models such as Buy Online Pickup in Store (BOPIS) and Buy Online Pickup at Curb (BOPAC). But, these models rely on seamless, frictionless delivery that requires smart sensors which can effectively read details such as addresses, car registration numbers, and even faces. Similarly, cutting-edge computer vision tech is aimed at enhancing the in-store customer and associate safety experience by identifying density, shopper traffic, and adherence to physical distancing norms.
Similarly, smart devices and sensors offer crucial, real-time insights on store inventory depending on multiple parameters. This real-time analysis would otherwise take hours to do manually. Depending on order pickups across stores and deliveries on locations, retailers have an end-to-end visibility of the store and warehouse inventories. Accordingly, retailers can restock immediately or proactively redirect customers to stores with available stocks. No customer likes being welcomed by empty store racks or “out of stock” notes. It affects consumer experience and loyalty, and these are exactly what a recuperating retail and CPG industry cannot afford. Working in harmony with smart machines and bots also improves the efficiency of human resources and enables them to address more critical challenges and interact better with customers.
The new normal is slowly but surely shaping the future of retail and CPG industry, and companies can ill afford to miss the digital bus now. The future of CPG is here and the future is now.