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Revolutionizing CPG, Retail, and Logistics Industry with a Platform-Centric Digital Strategy 

May 22, 2024

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Navigating today’s rapidly changing consumer landscape, complex ecosystems, and supply chain disruptions is challenging for the Consumer-Packaged Goods (CPG), retail, and logistics industry. How can CPG, retail, and logistics firms provide personalized customer experiences that drive loyalty in these dynamic market conditions? How can they enable an insights-driven, customer-centric culture?

In the era of data-fueled customer journeys, Consumer Packaged Goods (CPG), retail, and logistics businesses are turning to digital transformation to meet rising customer expectations. That said, the maturity of retail e-commerce has also accelerated the shift toward digital transformation within the retail industry, emphasizing its importance and urgency.

Undoubtedly, digital transformation is a complex journey, fraught with a myriad of challenges, from the need for technology skill sets and data talent to the intricacies of change management and compliance. For instance, many companies find it difficult to harness the potential of emerging technologies and new digital tools due to a lack of technology skills or knowledge, thereby hindering their transformation efforts.

Key barriers to successful digital transformation for CPG, retail, and logistics firms

In August 2023, EdgeVerve commissioned Forrester Consulting to conduct a custom study with 106 business and IT decision-makers from CPG, retail, and logistics firms to understand the effectiveness of digital transformation initiatives and the adoption of platform-based strategies.

38%
of CPG, retail, and logistics decision-makers believe their digital transformation efforts have been unsuccessful in achieving desired business outcomes.

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The main reasons being – unlike other industries, these businesses are still at the beginning stages of digital maturity and enterprise connectivity across IT and business teams, data operations, and processes. They are also behind other industries in terms of having technical, process, and knowledge foundations to advance digital transformation.

Here are a few digital transformation challenges that hinder organizational outcomes:

How can CPG, retail, and logistics businesses overcome these barriers to deliver customer and business value? This is where embracing an AI-driven, platform-based approach comes in.

The immense potential of AI and key digital transformation use cases

Though 82% of respondents highlighted that it was critical to harness emerging technologies holistically to create customer and business value, firms remain hesitant to incorporate AI into their DX strategies due to a lack of data readiness, skill sets, and trust in AI. Due to challenges in scaling AI, whether it’s a lack of skills to develop, implement, and operate AI solutions or an inability to measure ROI associated with AI investments, CPG firms are less likely to utilize AI significantly in their DX journey.

However, firms prioritizing AI and automation capabilities stand to gain significant benefits that can augment human potential and employee productivity and, ultimately, drive CX. According to the study, improving customer experience is a central driver for 92% of surveyed CPG, retail, and logistics decision-makers in their organization’s digital transformation efforts.

As businesses start to harness the power of data, they can also make well-informed, strategic decisions across IT and business centers. This shift towards insights-driven decision-making empowers businesses to adapt to rapidly evolving market conditions and customer needs.

Below are a few use cases focusing on efficiency, better decision-making, and improved productivity:

The way forward: Adopting an AI-driven platform-based strategy to enhance enterprise connectivity and efficiency

A platform-based strategy is the way forward for CPG, retail, and logistics firms to accelerate their organizations’ digital efforts. According to the Forrester study, 69% of CPG, retail, and logistics decision-makers believe in adopting a platform-based strategy that unifies business and technology to drive growth.

Advantages of a platform-based strategy to drive DX:

In short, the current digital transformation challenges have emphasized the need to connect business, IT, and partner ecosystem by leveraging a platform-based strategy that enables to capture both business and customer value through efficiencies, insights, and growth.

FAQs

The main challenges include operational inefficiencies, lack of business resilience, data security and quality issues, difficulty in implementing new processes, and a lack of understanding of emerging technologies.
AI-driven digital transformation can improve customer experience, increase efficiency, improve sales decision-making, and enhance productivity. It can also help identify territory gaps and ensure effective outlet coverage.
Digitized and automated sales activities, such as generating bills and conducting merchandising audits, can streamline processes. AI can also improve sales representatives’ productivity and performance, as well as enhance sales decision-making.
A platform-based strategy can unify business and technology, providing seamless integration between systems and applications. It can also enhance enterprise connectivity and provide insights for accountable decision-making.
To become more data-driven, firms can start by harnessing the power of data to make informed strategic decisions. This involves improving data readiness, developing skill sets, and building trust in AI to optimize new tech initiatives.

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Possibilities Unlimited

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