Article

Daniel Torres Dwyer 24 December 2018

The Role of Digital in CPG 2019: Areas for Reflection by Sri Rajagopalan

Always – the ideas, thoughts and words below are mine and reflect my viewpoints, not those of my employers or anyone else.

As the year comes to an end, it is genuinely a time to reflect on what has passed by, what we learned, and how best to apply this to the upcoming year that beckons us. First, before everything else, make sure to relax, recharge, enjoy time with your loved ones, and come back ready for 2019!

Much has been said of eCommerce and digital in our CPG world, and we’re all still in the middle of understanding, determining and landing scaled successes that both please and make us feel like we have command of this subject. Sales results often don’t look like what we anticipated, and innovation launches no longer seem like a blueprint can be followed. I’m not really telling you what you don’t know, but perhaps put into a simple article here, it helps – so, what to focus on in 2019? Let’s get to it.

 

  1. Artificial intelligence: a much loved but misunderstood word. 2019 is the time to truly learn the impact this is having socially on consumers. Listening devices, the change in privacy anchored by opt in, the ability to vocally interact with technology, and experimentation across the board means it will become more real next year. Learn the basics, apply it to your products, and focus on the famous Alexa device as your opportunity. This simple yet bold article helps decompose the tech buzz around AI for CPG[1].

BOLD 2019 PREDICTION: AI continues to evolve but doesn’t really land impact at scale (yet).

 

  1. The role of retail in your eCommerce / digital strategy: continues to evolve every single day. The questions come up routinely – where to focus? Omni, Omni, Omni – omnichannel has truly arrived and virtually every retailer of scale is adapting for it. If you’re not talking to, developing a strat plan, and not leading the way with your retail customer – you are genuinely missing the point. Take time to understand concierge shopping services – Instacart, Postmates and Shipt.

BOLD 2019 PREDICITION: massive attention shift towards omnichannel retail.

 

  1. The role of Direct to consumer (D2C): if you are part of a large, scaled CPG universe, let’s admit it, this feels like a must have, we are still learning it, and we haven’t been able to figure out how to truly adopt it. Does the consumer truly want it directly, what value are we providing, can we create an aura of surprise and delight, does CRM truly anchor with you, and the value of data – these are on your mind and you’ve been trying…

BOLD 2019 PREDICTION: it gets real! M&A becomes the true, tested, tried way to play this out at scale, other ways are finally understood as learning experiments, and played out for those reasons only.

 

  1. 1P vs 3P (where to sell): lately the word ‘CRAP’ has been in the news every day. You’re in this space you know what it means. This phenomenon started in several categories in January and will dominate 2019. Everyone should make a fair profit and this action is only to be expected. Your future as a 1P on pureplay will henceforth be welcome only with direct investments.

BOLD 2019 PREDICTION: the industry embraces 3P as its primary vehicle on pureplays. Yikes (this means you’re learning the art of being a retailer).

 

  1. Areas impacted by digital reach: this is the year cross functional teams truly embrace and deliver support for this space. This means packaging, relevant SKU rationalization, artwork, innovation launch mechanisms, SEO anchored content, SEM paid search strategies all become the ‘NORM’.

BOLD 2019 PREDICTION: the launch of eCommerce specific SKU’s at scale across the industry for omnichannel rollout and scale.

 

  1. Advertising shifts: far too long the industry has relied on amplified and scaled mass communication platforms that were expensive. LIVE TV was one of the most successful and influential platforms of its time. Streaming is the new TV period, short of a few LIVE events. Ask yourself if your ad strategy on streaming is focused on 1:1 consumer relationship development. You’ve exclusively depended on the retail outlet to build loyalty, this is a shared responsibility now. Custom and boutique work focused on 1:1 consumer relationship management is a reality. Are you in the middle of shaping it?

BOLD 2019 PREDICTION: the rise of boutique and small agencies for scaled media buying on new platforms and relationship building, streaming TV is fully understood as a real must do platform.

 

  1. The role of marketing mix: WOW! Have we seen changes in the mix model or what over the last 5 years? Wait, have you adapted and made the necessary adjustments, or is the well know mass channel data (easy to measure) your primary vehicle for developing your mix? Is your equity building platform inclusive of retail outlets and a well-diversified SEM mix? Think about this – audience attention span is diverse and if you’re not including these platforms in your mix up front – you’re not driving scaled equity in 2018 but merely driving it in easily measurable channels (50 % of reach approx..). Let’s reach the consumer where they are.

BOLD 2019 PREDICTION: MMX models become inclusive of SEM and paid media on retail platforms as a norm. (PS- the keyword here is retail platforms) PS – invest in media on Alibaba and don’t use the ROI excuse (this is the year Alibaba’s reach becomes global – are you ready for it? Yes, it will also reach Europe and US in 2019).

 

  1. CES, Shoptalk, Groceryshop: this is your digital playground. See the future of devices and products in one, learn to market it at the next and how to sell it at the third. They are in chronological order. If you’ve never heard of these 3 – we have work to do, it’s a good day to ‘google’ them and get started.

BOLD 2019 PREDICTION: you will find a way to be part of one of these and lead by example.

 

  1. The unprecedented availability of data: no longer are you constrained by the availability of POS aggregated projected data. Yet you are choosing to anchor your success on it even though it measures 50 % of what you do. This is the year, a serious effort needs to be put to understand what you already have, buy into, which vendors can help you, and how you can understand consumer preferences in a truly qualified way. Tech is way cheap compared to when you started this journey, leverage it.

BOLD 2019 PREDICTION: The industry acknowledges the availability of digitally influenced data sets and makes it habitual in every day analytics.

 

  1. Your personal digital journey: by now, you are nodding your head in acknowledgement of the above, or I’ve provided you some good end of year humor, perhaps you will call out my bias for being an industry change agent. Whatever it may turn out to be, in 2019, you don’t have a choice as a CPG leader. You must lead by example. No more depending on individual heroes to lead the path for you. You are empowered and owe this to the industry. So, read up, ask questions, and lead this revolution from the front.

BOLD 2019 PREDICITION: YOU will author, create, co-create content, speak or motivate others in the digital revolution in 2019!

 

HAPPY HOLDIAYS YOU’LL…

 

This article was written by Sri Rajagopalan, Vice President of New Digital Business Models at Johnson & Johnson.

[1] https://bit.ly/2PIe92L