But have consumer brands truly recognized this new reality? And are they backing that up with the necessary investments in their e-business strategies? Accenture’s latest research suggests many aren’t.
An overwhelming majority of CPG decision-makers surveyed (90%) believe e-business will drive future growth. A similar number (82%t also understand they need to innovate at an accelerated pace to stay competitive. But less than half (45%) plan to act on these imperatives and significantly increase e-business investments over the next three years.
Why so cautious?
So what’s going on? It seems many large consumer goods companies are still struggling to get deep insights into their customers, and are hampered by limited or disjointed visibility into their data. Some are feeling restricted by data privacy and security issues.
And others are hindered by inflexible or overly complex legacy business processes. The net result is a negative impact on these companies’ e-business strategies. Nearly half of those surveyed said their brand’s strategy wasn’t well-defined and highly effective.
That’s set to be an increasingly big headache for brands, especially as these decision makers are expecting big increases in online sales. Two of every five executives are planning for at least 25% of their sales to come from online channels in three years’ time (compared to the less than one in five who say the same today).
Getting the priorities
One of the reasons for this disconnect between strategy and investment is the need for upskilling in workforces. Take the fact that less than a quarter of executives strongly agree that their staff “understand how ecommerce works.” That’s a really low figure and suggests companies may simply lack the skills to capitalize on the opportunities presented by the digital economy.
Legacy operational processes and mindsets can also be a hindrance. Just one in five of those surveyed said they have commercial models in place with digital retailers to manage pricing, promotions and distribution. Similarly, low numbers said they have the right culture to foster collaboration and the right processes to deliver digital ecommerce content at scale.
Content is another priority area for companies to address. Two in five executives said their content strategies were actually holding their businesses back (in particular in their approach to managing product details, partnerships, and descriptions on third-party sites). Almost as many cited the challenge of ensuring product availability matched their customers’ shopping behavior and their propensity to purchase through digital channels.
The future must focus on achieving relevance at scale
The advantages of incumbency, which once protected large consumer goods companies so effectively, are falling away with remarkable speed. Challenger brands are entering a level playing field and rocking established business models from their foundations.
There’s a clear and present risk for incumbent brands: that they end up becoming “just” manufacturers in hypercompetitive commoditized markets. It means relevance at scale — where consumer brands meet individuals in the moments that matter — has become an urgent priority for organizations to address. That’s why having an effective e-business strategy — supported by the right talent, processes, content, and technology investments — is so vital in retaining competitive advantage in the years ahead.