A company redesigning its warehouse replaces its handhelds, laptops and back office computers with a smart device, priced at $1500 or thereabouts. The same company leverages digital tools to not only predict but also proactively push slow-moving merchandise via loyalty programs and personalized offers. These are clearly instances of digital transformation.
The term is much-used in corporate circles but ask what it means and each one has a different answer depending on their orientation. So a person in marketing is likely to have a different view from, say, a finance professional. In my opinion, this is the reason why the potential of digital has not been realized in most organizations yet. The views are so varied that integrating them to form a common enterprise-wide policy is a herculean task. The findings of the recent CGT survey commissioned by Wipro validate my assumptions: only 36% of the respondents have a common digital strategy across the organization, the consolation being that 27% think they need a common strategy and are working towards it.
While it is common knowledge that many companies are adopting digital marketing practices, I was pleasantly surprised to see that 70% of the respondents are already marketing directly to shoppers through digital. Some (24%) have conveniently delegated the task to their retail partners. Consumer goods companies need to be more actively involved, surely?
The survey indicates digital transformation in the supply chain as well where the stakeholders are many: suppliers/farmers, agents, wholesalers and retailers, and not to forget, consumers. Although currently, the highest degree of digital interaction is with the consumers (88%), there is significant interaction with agents (71%). Another fact that stands out in the report is that companies are appreciating the importance of digital interaction with suppliers/farmers. 73% of the respondents who are currently not digitally connected with them, plan to do so within the next three years.
The findings on loyalty programs are also interesting. Only 18% of the respondents have an enterprise-wide shopper loyalty program, courtesy the absence of a pan-organizational digital interaction policy, I think. The survey throws some light on revenues too: most of the digitally-driven revenues are coming in from the direct-to-consumers channel. And what is driving companies to embrace digital? The report says it is the desire for revenue growth and consumer loyalty.
There was one more thing I was curious to know: Is the data gathered from the various digital touch points being used to draw consumer insights? I did not really think much was happening there. But it was a pleasant surprise to see from the survey that a whopping 64% are using digital touch points to perform data analytics. More than 50% of the respondents are leveraging the insights for trade promotion, market mix, media spend and new product development. Further, the survey covered digital transformation in emerging markets where a significant number of companies (51%) are already using digital to reach shoppers.
Digital transformation in the consumer goods space will obviously entail omni-channeling involving consolidation of various parts of technology. 48% of the respondents have integrated their consumer-facing systems, while 47% have consolidated the insights systems. These are followed by digital asset management, registration and security.
A worrying revelation is that only 19% of the participants are already reaping the benefits of digital transformation. Not only that, 38% is still in the process of developing their digital infrastructure. Without doubt, the pace needs to pick up and more organizations need to gain in terms of greater cost- effectiveness, topline growth and better understanding of the consumer.
Well, that about sums up the findings of the survey. Do they match your views on the subject? Would like to hear what you have to say.