2. Adoption of evolving new technologies will be
the theme for the year. Such as IoT, which is on
radar of organizations for different aspects it can
serve, be it, Inventory Management through
incremental demand driven approach or
Prediction based proactive applied decision
science across value chain or influencing
irrational & impulsive Consumer buying
behaviour by increasing the perceived value
through clustering of products across categories.
As per Retail Systems Research’s recent report,
The Internet of Things in Retail: Great
Expectations, 80 percent of retailers believe that
the IoT will highly impact Consumer Goods and
the way companies do business in the next three
years. Plug & Play APIs coupled with advances in
data analytics will drive the transformation of the
CPG &Retail industry through seam less
information transfer and setting the stage for
crowd sourcing based innovations . Investments
in niche supply chain tools in areas such as the
likes of Network design, S&OP, Logistics is the
call of the day to improve & optimize fundamental
metrics like Lead time variability & Out of stock
at every nodal point from farm to shelf.
Re-invention of retail through investments in
digital technologies will continue to be one of the
biggest themes for the year. This encompasses
the world of omni-channel. To compete with the
reach of e-commerce, traditional retail companies
have been investing in omni-channel initiatives to
stay relevant. This has opened up a new avenue
for them where the physical store connected to
all channels becomes a universal center to
provide a differentiated customer experience. A
gamut of digital technologies and better
understanding of customer preferences will help
retailers to service customers well across all
channels. Investments in Big Data will ride high
to support these digital initiatives making retail
truly seamless.
Evolution of new technologies to
drive business growth
Blurring of Boundaries between CPG & Retail
2015 saw a lot of activity in the CPG & Retail
space in the field of M&A and transformation.
2016 will certainly take this trend forward
leading to further blurring of boundaries between
CPG & Retail. In order to chase growth and
predict consumer behaviour, CPG companies are
engaging directly with and reaching out to end
consumers. This can be seen in the form of
interaction and innovative marketing on social
media or gauging the success of a new product
by launching it directly on a non-traditional
channel such as an e-commerce marketplace.
This on-going trend is also visible from the fact
that many brands are opening company operated
restaurants.
CPG companies have backed initiatives by
Amazon where it has moved some products on a
fulfilment model, where a press of specially
designed physical Dash buttons, orders product
on Amazon in case these items are recurring
orders such as toothpaste, dish soap etc.
Similarly, retailers too don’t want to be left
behind in reaching out to their consumers and
grabbing a bigger pie of the consumption story.
This has resulted in backward integration in the
supply chain (generally associated with creating
private brands) in the form of JVs and
collaborations with brands with high traction
looking for development of sales channels.
3. With COP21 just concluded, efforts from the CPG
& Retail industry will focus on achieving their
previously set sustainability goals and setting up of
new targets. As most of these corporations are
global in nature, they need to evaluate the new
realities and commitments of each base of
operation and come out with comprehensive
action plans.
CPG & Retail has always been at the forefront of
setting up and reaching ambitious goals in the field
of sustainability and this move is expected to be
carried forward in the coming year as well.
Presence of CPG & Retail majors in RE100, a
coalition of businesses intent on converting to
100% renewable energy, is a proof of this
commitment. Taking into view consumer health
concerns, Target has expanded the list of
prohibited chemicals in its products. Similar moves
as part of self-regulation are expected to be taken
by the entire CPG & Retail industry in 2016.
Another area that will see a boost in 2016 due to
focus on sustainability will be new product
development as consumer preferences will move
to goods that are sustainably produced, sourced
and can be disposed-off/recycled with minimal
damage to the environment.
Sustainability
(moving towards a green and lean supply chain)
With different studies pointing out deficiencies in promotion management being undertaken by different
CPG companies, the coming year will bring into focus an evaluation of trade promotion strategies adopted.
Slowdown in demand and changing market dynamics will put additional burden on companies to focus on
cost efficiencies. For the last few years, CPG & Retail companies have been playing catch up with market
disruptions and investing in new channels of sales and marketing. Some of these initiatives have resulted in
positive gains while some have been struggling. 2016 will be the year where companies will evaluate the
performance of their initiatives and invest in course correction. In a nutshell, CPG companies have to come
up with an aligned Optimization based Trade Promotion strategy which is more agile and can adapt to the
challenges posted by not only the major global competitors but also from small, yet nimble & aggressive
regional niche players.
Re-interpretation of trade
management and evaluation of ROI
Counter to Slowdown
CPG companies will enter into businesses that promise high growth as traditional sectors are slowing down
due to economic slowdown and increased competition. One such segment that will see heightened activity
is healthcare. Nestle plans to invest in nutritional therapy and Indian FMCG giant HUL is reviving its
Ayurveda based health supplement brand – Lever Ayush. Other big names are also expected to follow suit.
Another example of companies moving to big business segments is Pepsi Co India Snack business Frito Lay
competing directly with Indian traditional snack companies by launching namkeens under its brand name
Kurkure.
4. The following snapshot highlights the gamut of areas CPG & Retail
industry is looking to work on to adopt and adapt to the above
highlighted trends.
Figure 1: CPG Industry Landscape
Figure 2: Retail Industry Landscape
We believe that, in order to build next generation innovation and be able to ride this change wave,the
CPG & Retail Industry should invest heavily in the following strategic initiatives in collaboration with their
IT partners.
! PLM Implementations
! Product Quality & Factory Compliance
! NPI Optimization
! Digital Transformation
! Internet of Things (IOT)
! CPG Analytics, Advanced Analytics & Big Data
! ERP Implementations
! Middleware/EAI Intergration
! Master Data Management
! Sustainability Solutions
! Infrastructure Services, Helpdesk & Store Field Services
! IT Cost Reduction
! Trade Promotion Optimization
! Outlet Segmentation & Retail Order
Recommendation
! Sales-force effectiveness
! New Product Launch Analytics
! Pricing Analytics
! Demand Planning
! Distribution
! Inventory & Stock-Flow Management
! S & OP
! Network Design
! Transportation & Route
! Lean Fulfilment Services
! Purchase Order Processing
! Trading Platforms - Commodity and Currency
! Supplier Risk Management
! Sourcing & Contract Management
! Consumer Promotion Optimization
! Coupon Effectiveness Analytics & Optimization
! POS Data Analytics
! Social Media Analytics
! Throughput Inprovement
! Capacity Augmentation Analysis
! Production Inventory Tracking
! Product Traceability
! Manufacturing Compliance
Deeper Consumer
Engagement
Cross Channel
Strategy
Rapid Product
Innovation
Cost
Efficiencies
Value Chain
Integration
Information &
Performance
Visibility
Retail
Technology
Innovation
Compliance
& Sustainability
Campaign
& Loyalty
Solutions
Omni-Channel
CX Improvement
Framework
Customer
Value
Management
& SVOC
"IOT" for
CX Solutions
CX
PLM
Product, Vendor
& Factory
Compliance
Integrated
Design
Sourcing &
Global Buy
NPD Value
Ready
Solutions
Managed
Process
Services
SCM
"IOT" for
Supply Chain
Supply Chain
Excellence
Supply Chain
Visibility &
Integration
SC Design &
Optimization
DATA
Retain
Enterprise
Performance
Management
MDM
(IDI/SVOC/
SVOI)
Big Data
Use Cases
Advanced
Analytics
Use Cases
ADM /
Infra
Business
IT Alignment
Target IT
Operation
Model Design
IT Cost
Reduction &
Optimization
WorkEZ
ManageNXT
CloudSHYFT
! Electronic & Mobile Application Development
! Integrated Supply Chain strategy to service Direct to Customers
! Building Advance analytics solutions using consumer data for informed
decision making
Focus on
Digital Commerce
Create Enterprise
Information
Management Platform
Move towards Cloud
based Master Data
Platforms
Create Farm to Shelf
Supply Chain Visibility
& Integration
Managed Supply
chain Services
Next Gen IT
Consumer
Connect
Research & Product
Development
Procurement
Manufacturing
Integrated
SupplyChain
Trade &
Marketing
! Customised Performance management frameworks ( Strategic, Tactical &
Operational levels) to help CPG companies move from Descriptive BI to
Diagnostic BI
! Creating complete BI Analytics service bureau approach & Developing
deep domain expertise to advise CXOs on integrated organizational
dashboards highlighting key KPIs at every level
! Partnering with Master data experts to facilitate cloud based solutions to
Increase data quality and efficiency by meeting all the needs in data
migration, data analysis, data archiving, data cleansing and standardization
with one single tool
! Development of partner ( Vendor & Customer) portals enabling the ease
of doing business by creating transparent reporting dashboards & real
time information systems
! Aimed at assisting Organizations in not only carrying out their day to day
Supply chain Operations with increased efficiency and accuracy but
create an intelligence power house that can help them identify process
gaps and areas of improvement in their existing supply chain planning and
operations practices.
