As consumer shopping journeys and purchase preferences continue to shift, consumer packaged goods (CPG) companies that can respond quickly to trends have a distinct advantage. This was never more apparent than during the pandemic, as more agile brands were able to evolve with changing shopping behaviors rather than react to them and miss out on sales opportunities.
About 70% of CPG-sector growth over recent years has come from small- and medium-size brands, according to McKinsey & Co. A key reason for their success is that they are more nimble than large brands and can adapt and capitalize on shifts in consumer preferences and trends more quickly. A lot of factors contribute to this agility, but a key factor is the ability to leverage supply chain data and market insights to create a broader view of opportunities and threats.
A New Approach to Data and Insights
Larger CPG companies are being left behind and losing market share to their smaller, more agile counterparts. They have complex, multi-dimensional organizational structures straddling many regions, product categories and channels (including direct-to-consumer) which makes sharing data across traditionally siloed teams challenging. To accelerate product innovation, agile processes and time-to-market, leaders need access to real-time sales data coupled with market insights that shed light on consumer behaviors and supply chain disruptions.
Put simply, they need a new approach to collecting, consolidating, synthesizing and sharing data in real-time to become agile. Luckily, a new model for data management called programmatic commerce has emerged. It is a data-led automated operating model that proactively keeps companies ahead of rapidly evolving consumer behaviors, identifies potential disruptions, deploys resources, predicts store and online traffic, tracks inventory and product performance, understands store conditions, and replenishes both virtual and in-store shelves at speed and scale.
Adopting a programmatic commerce model enables companies to aggregate real-time operational data from retail and distributor portals together with market data. A programmatic commerce platform makes it easy for executives within production, marketing, merchandising and supply chain to leverage integrated internal and third-party retail-time business data to understand business performance, risks and opportunities across the supply chain.
Combining market trends with real-time operational data, managers can make more informed business decisions designed to boost sales, manage inventory, improve merchandising mix, reduce out-of-stocks and waste, optimize logistics and more.
A programmatic commerce model gives CPG brands real-time access to customer, product and syndicated (market) data that enables enhanced capabilities to:
Access to huge amounts of data is not the challenge today’s CPG brands face; it’s harnessing all the available data, converting it into insights and leveraging it for competitive advantage. Brands differentiating themselves with data-led initiatives are the ones able to quickly adapt or even anticipate shifts to be first to market with the products that consumers demand. Enormous amounts of data must be captured, analyzed, made accessible and shared at the speed of light.
In the past, connecting multiple sources of data to be collected and transformed into unified, real-time insights was nearly impossible. But programmatic commerce platforms make this simple because they allow both upstream and downstream data systems to be easily connected. For the first time, the ideal of an end-to-end digital supply chain can be realized.
Aggregating all critical business data into a single consolidated view is imperative. Only then can the power of advanced analytics, artificial intelligence and machine learning be applied to extract usable insights. It creates a clear picture of consumer demand, allowing leaders to build a resilient, agile supply chain to support it.
Anytime, Anywhere Access
Making the most of customer, product and market data requires easy access from anywhere and at any time. And, access to data is even more important with companies relying on remote workforces during and after the pandemic. CPG companies and supply chain partners can’t wait for information to be sent to them — they need information on-demand in real-time.
Today’s cloud-based data portals make real-time access to data a reality. Combining real-time data feeds of sales, inventory, logistics, supply chain and market trends creates a “single version of the truth” and enables true agility.
But, sharing access with all departments and partners is imperative to maximize the benefit of this valuable data and insights. Whether it’s connecting to a cloud lake or on-premise servers, companies need the flexibility to share data with everyone who can benefit from the information. Best-in-class, cloud-based repositories and advanced analytic platforms now offer easy plug-and-play with other systems and capabilities, enabling companies to collaborate more easily with others across the supply chain.
CPG companies that are data-led, consumer-centric, connected and collaborative will have the agility to move with the market, lessening the impact on business and revenue. And, with the right technology, it is possible to create a supply chain that is more resilient and efficient, with the ability to proactively identify, alert and respond to trends and disruptions. Smaller CPG brands are adopting programmatic commerce at a faster pace than larger ones, aiming to chip away at market share through their ability to be nimble. But now is the time for all brands to evolve. After all, changing consumer behaviors and unexpected supply chain disruptions will continue to impact business, now and into the future.
Are Traasdahl is founder and CEO of Crisp.
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