The COVID-19 pandemic has been a decisive factor in crafting business models and engagement strategies for digital transformation with the help of technologies such as data analytics, digital, cloud, enterprise mobility, cybersecurity etc. Physical distancing, greater focus on hygiene and welfare, and the shift in communication channels have all contributed in some manner toward the outlook of businesses for digital transformation. It is safe to say that some of these trends will continue to be the new normal for the retail sector, bolstering its digital footprint long after the crisis has ended.
The retail and CPG industry is one of the most affected sectors during this challenging period. While the retail and CPG industry has witnessed staggering growth in demand for essential products, they have also had to contend with the looming threat of supply chain disruptions. In addition, the pressure to ensure business continuity and high-quality customer experiences has prompted further adaptability and ingenuity within the retail sector. Yet, uncertainties exist.
As we, gradually venture into the new normal, industry players will need to increase their focus toward gaining the competitive edge and boosting their digital footprint in a world without quarantine measures. While we may not have a lot of clarity on how long these conditions will last, I believe that now is the time to scale.
The rise of digital media and the increased consumer reliance on e-commerce, in particular, provide some indication of the critical role that digital growth will play in shaping businesses. While early observations of the Chinese economy suggest that the newer consumer segments will continue to be slow to adapt to virtual channels, the vast majority of the market has already exhibited a steep increase in online media purchase activities. For instance, in the United Kingdom, the surge in online retail activity has led one of the region’s largest retail brands to double their online capacity within a 5-week span.
Scaling Digitally in the New Normal: Not an option anymore!
The rapid proliferation of virtual operational models, within the enterprise as well as outside it, provides businesses with the opportunity to test and scale their digital presence. For organizations that are at a lower maturity level in the digital transformation journey, investing in a new virtual ecosystem promises big returns, if carefully planned and executed.
One of the most promising areas of digital scalability in the RCPG sector is data analytics and insights. At an early stage of the scalability journey, enterprises will need to ensure a complete and comprehensive view of available data for an effective decision-making cycle.
Supply chains serve as the primary component of the retail fulfillment process and are the most vulnerable to sudden, radical shifts in purchase patterns. The pandemic has proved this many times in the past few months. Protecting the supply chain from unwanted surprises is a complex job. However, an Agile process that identifies and predicts baselines, and subsequently recalibrates operations, can prove to be a winning capability for business. As consumer behavioral patterns grow increasingly dynamic across geographies, supply chains will need to be flexible and scalable to meet fluctuating demands. This is where data analytics comes in the picture.
As markets struggle in the wake of the short- and long-term effects of the pandemic, enterprises will need to identify and quantify the historical shift in customer behavior at a local level. The onset of the pandemic saw consumers proactively purchasing health products. And the buying patterns have evolved to reactive health management, eventually leading to the increased online traffic we see today. As people return to their daily routines, elevated health, hygiene, and wellbeing protocols will continue to be a standard practice. And this will be reflected in buying patterns. By leveraging data and analytics, businesses can realign their sales and operations to meet the changing market requirements.
Enterprises that are implementing data analytics to secure their supply chain operations will need to train their advanced forecasting model to include an independent pandemic variable that accounts for customer behavior shifts at a local level. The value of the variable could be determined based on various region-specific data such as the number of confirmed cases, the death toll, and local government regulations. Enterprises can take this a step further and prepare for any future outbreaks by recording and leaving room for changing the coefficients and assumptions made for existing models.
But with the increased use of digital levers, businesses will also need to ensure that their digital assets are properly managed and maintained. Many companies are already leveraging digital asset management (DAM) solutions along with Product Information Management (PIM) platforms. Such an approach provides the business with a single, unified, cloud-based platform that grants geo-agnostic accessibility to employees. This further enables teams to streamline their processes and execute production, customization, and sales through multiple channels.
Scaling in a Learning Environment
One of the most significant challenges in scaling digital is scaling what you learn. While it is imperative that enterprises scale their digital footprint through analytics and data management, it is equally important to understand that these efforts address one dimension at a time. Rapid shifts to a full-scale digital transformation across operations and interfaces raise several roadblocks. But they also present numerous opportunities. To make the most of the situation, enterprises will need to ensure real-time learning from the values derived through scaling digital. By doing so, enterprises can not only identify areas of stability and agility but also pave the way toward building a future-proof, resilient business.