A next-gen strategy for strong ecosystems
The COVID-19 pandemic upended consumer packaged goods (CPG) businesses across the world.
Stay-at-home mandates indicated tectonic shifts in consumer preferences, and brands demonstrated resilience as they rapidly adapted to the fast-changing trends. A need that has come to the fore in the post COVID-19 world is for CPG companies to build an ecosystem of retail partners, third-party service providers, and consumers. Businesses need a next-gen online-to-offline (O2O) business model strategy that places consumers at the center of the brands’ strategic priorities to meet this need. The strategy should also capitalize on the abundant data available in the ecosystem for a frictionless consumer experience.
The new reality
Some of the most visible changes in our day-to-day lives on account of the novel coronavirus pandemic is increased screen time.
Far more consumers are shopping online now as compared to the pre-COVID era. The new reality consists of lockdowns and the possibility of consumers continuing to practice social distancing and self-isolation even as restrictions ease. Also, consumers are no longer fussy about brands, paving way for private labels to penetrate.
To cope with changing consumer demands, CPG companies are going back to the drawing board to rethink their product and SKU mix. An imperative need in the post-COVID-19 world for CPG companies is the ability to deliver products at the right place and time. It requires brands to revisit their supply chain strategies. Also, given the increased screen time of consumers and increased competitive intensity from digital channels including the growing influence of social media, brand marketers need to revisit their marketing strategies.
Hence, CPG companies must be cognizant of these emerging trends and focus on delivering an outstanding purchase experience to consumers. It requires adopting consumer-led, insights-driven, fast, connected, and disruptive strategies. This can be achieved by moving towards a consumer obsessed model.
Build the O2O mindset
The model facilitates a common consumer-centric ecosystem of convenience stores, social media applications, brand-owned outlets, and logistic partners to ensure an immersive consumer experience across all touch points.
Besides it also fuels companies with plentitude of consumer order data.
The basics of driving a unified brand experience involves every aspect of the business to come together. It starts from discovery, encompasses consumer touchpoints to purchase, delivery and feedback to complete the loop.
The O2O model facilitates a common consumer-centric ecosystem of convenience stores, social media applications, brand-owned outlets, and logistic partners to ensure an immersive consumer experience across all touch points. It also provides companies with plenty of consumer order data.
Embrace a segment-centric approach
While embarking on the O2O journey, consumer packaged goods (CPG) companies need to adapt their strategy to the segments in which their organization operates.
For instance, a premium cosmetics/beauty brand can collaborate with niche outlets, service partners such as premium salons and spas as well as logistics partners. While a luxury brand with a direct to consumer (D2C) presence can display real time inventory of the nearest stores allowing consumers to reserve online and try at store or opt for online delivery using logistic partners.
Companies supplying baking/garnishing products can partner with bakeries and allow consumers to order from the nearest outlet. Whereas confectionary manufacturers can collaborate with food aggregators for a wider reach.
CPG companies need to take a slightly different approach when it comes to driving adoption among retail partners. Apart from traditional bulk order discounts and trade promotions, it is pivotal for CPG companies to make retailers realize the importance of consumer data gathered by this model and educate them on how it could drive exponential growth. It is imperative for brand marketers to ensure that the partnerships they pursue with brand aggregators and retailers includes consumer data sharing policies apart from the revenue, display and pricing guidelines.