Commentary

Pivoting To A New Supply Chain: 4 Steps Forward

Targeted promotions, clever branding and innovative social media campaigns are no longer enough to guarantee brand loyalty in CPG. Consumer expectations have been raised by brands that offer an omni-channel experience and anytime-anywhere delivery—and shoppers increasingly demand fast, flexible and personalized service as standard. 

The shift in consumer mindset is good news for CPG firms that can deliver their products fast enough, and reliably enough, to meet market demand. By implementing disruptive technologies, they can develop a dynamic, next-generation supply chain that creates competitive advantage, unlocks value and drives consumer loyalty.

A next-generation supply chain also creates new opportunities for marketing. As well as providing a powerful narrative that will resonate with the market—about being a brand that supports the hectic lifestyles of today’s consumers, for example—dynamic supply chains generate valuable data on how consumers interact with the business’ products and services. This data helps enable marketers to build one-to-one consumer relationships based on an in-depth understanding of preferences—whether for more environmentally-friendly products, tailored content and advice, or new ways to purchase and receive items.

The rewards for taking action are significant but present no shortage of challenges. To help establish a more dynamic supply chain, marketers may need to work with partners throughout the business as part of a shared journey toward success.

So what does this journey look like? What does it take to build a next-generation supply chain that enhances marketing efforts? In our view, it breaks down into four key stages.

Automate for faster response

Consumer preferences change rapidly, and so leading CPG firms—as part of the next-generation supply chain—are automating analytic modeling techniques to analyze and convert data into real-time insights that inform supply chain decisions. Digital platforms can also look across social media, sensors and connected devices to deliver up-to-the-minute data feeds on evolving behavior and sentiment.

The automation of data collection and analysis across the supply chain could create several new benefits for CPG marketers. Not only will marketers be able to respond to consumer needs more efficiently, but they will also be in a stronger position to predict future market needs.

Strengthen skills to unlock data-value

The data generated by a dynamic, connected supply chain presents exciting opportunities for marketers to gain deeper insight into evolving consumer trends and behaviors. Marketers can use these insights to develop targeted campaigns and promotions that deliver real value, and even inform the development of new products and services. 

And yet, to reap the benefits of today’s data explosion, CPG firms may benefit from broadening their skills base first. By strengthening their people’s analytical skills to translate large quantities of consumer data into meaningful insights, leading businesses are achieving more effective operational decision-making. 

Build ecosystem partnerships to improve service

On the journey to a next-generation supply chain, CPG firms could rely less on in-house capabilities and more on networks and partnerships with external suppliers. By collaborating with a wider ecosystem of specialist firms, businesses can leverage new skills and capabilities that will help them resolve problems faster, seize growth opportunities and enhance the value proposition. 

We could also expect CPG firms to collaborate more through social platforms. Users will interact with colleagues and ecosystem partners to share qualitative information and up-to-the-minute system data. Sharing, discussing, reviewing and approving scenarios as they occur speeds execution and helps enable marketers to make informed in-the-moment decisions.

Make it personal to provide a meaningful experience

The supply chain of the future is not built for high-volume products and a small number of SKUs, but structured to serve the unique needs of each consumer. According to recent Accenture research, a majority (97 percent) of supply chain executives are planning to modify their operating model toward more granular segments.

Through in-depth segmentation, CPG marketers can identify needs for personalization by channel, service level and market area. This enhanced, more detailed segmentation creates an opportunity for more targeted marketing to defined consumer groups, supported by better measurement of the impact of specific promotions and offers.

Pivoting to the new supply chain

CPG brands can use dynamic supply chains to continuously improve the customer experience. For marketers, much of the value lies in the depth of customer insight generated and, in turn, the ability to act quickly on these insights and build loyalty. Furthermore, by becoming more closely aligned with the supply chain, marketers have an opportunity to engage meaningfully with customers at every touchpoint in the shopping journey. This enables firms to put customers at the heart of their businesses—and could pave the path to greater competitiveness in the digital era.

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