• Visibility, innovation, manufacturing, and distribution – the key elements to achieve success.
Organizations have invested heavily in implementing the best technology to transform data into information, and now it’s time to transform all this information into a key asset for decision-making. It’s a new era, and there are new challenges to be addressed in the Consumer Products sector. Now that data represents one of the key assets, organizations that do not have the right people, tools, and strategy face the following challenges:
- The lack of visibility manufacturers have in relation to what happens to products once the retailer distributes them in different outlets. They do not know the assortment that goes on sale, the follow-up to the transaction, if the promotions have been executed correctly, or if inventory is low. The only two sources that can provide reliable consumer behavior data in this scenario is the sales force, and the Sell-Through Rate.
- The rise of White-Label products in the market. In recent years, they've been winning a large part of the revenue, and they are 26.6% cheaper than market leaders, according to the State of Distribution.
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- The marketplace is becoming more competitive, and in order to keep up, it's important to be efficient with promotions. Data is required to identify the best time of year, the place, type of promotion, and to measure the impact.
- Promotions do not always work because of the competition and saturation of the market. Customers often find them repetitive because they lack innovation.
- The consumer omnichannel refers to how consumers now interact and communicate with companies and brands through various channels (mobile phone, social media, websites, etc.) If all this data is not analyzed, then businesses miss the opportunity to send customized promotions that are aligned with the tastes and habits of individual consumers.
- The steady rise of online sales portals has forced physical retailers to provide versatile solutions of the same quality, reliability, and speed as e-commerce giants.
- Over time, consumers adopt new lifestyles. For example, many consumers today are concerned with adopting healthy lifestyles, such as following a vegan diet, or only consuming products that are eco-friendly and chemical-free. Consumers want new products and they have the power to influence the type of products that are sold.
- These challenges we have named are a result of the new era we live in, but there are the usual challenges that have existed, and they are still important to consider. For example, optimal stock management of warehouses, proper demand planning, and optimal costs of production, people and machines.
Where should you begin to address these challenges?
You need a strategy based entirely on Data & Analytics and a culture based on Business Insights. Achieving a data-driven model requires a culture change from within, putting data at the center of decision-making.
To learn more about overcoming the challenges of the Consumer Products sector, download the complete Business Insights e-Book.