Consumer goods companies are learning from traditional e-commerce retailers when it comes to their use of online customer and competitor insights to understand buying patterns, price sensitivity, new competitive product offerings and improve category management for e-commerce channels.
91% of the respondents see e-commerce as a strategic priority, and 57% are investing in eCategory Management to support fast-paced growth in online market share, by better understanding and reacting to the online consumer. These are some of the finding of a new survey report unveiled today by Periscope By McKinsey, a suite of solutions focusing on price, promotion, assortment, sales and marketing optimisation to achieve sustainable revenue growth.
However, the survey also showed that for the overwhelming majority of consumer goods companies (75%), the journey towards using advanced eCategory Management capabilities to inform product assortment, pricing and promotional decision making in online channels, is only just beginning.
The survey, conducted at the recent Consumer Goods Sales & Marketing Summit 2017, benchmarked online assortment, merchandising, pricing and promotions optimisation technology across consumer goods companies. It also investigated how companies use online customer behaviour and preferences to inform digital marketing, product purchasing and promotional decisions, as part of an integrated multichannel game plan.
Building E-Commerce Capabilities Are A Top Priority
An impressive 91% of respondents said building e-commerce capabilities was a top strategic priority for their business, highlighting that digital commerce is now viewed as a growth engine by the majority of consumer goods companies. Asked to rank how important it is to acquire these capabilities, 15% said it was viewed as the #1 priority for their company; 58% said it was a top three priority; and 18% identified it as being a top five business priority.
What’s Driving The Consumer Goods Change?
Asked about the reasons for improving their capabilities, the need for customer centricity echoed throughout the findings: Evolving consumer needs and expectations was the top reason for 81% of respondents. This was followed by the desire to build a channel for direct customer interaction (45%), and the ability to leverage digital to raise brand awareness or control online representation (42%).
Moving Towards E-Category Management
While 48% of respondents ranked building eCategory Management capabilities as a key priority for senior management and 30% said it was vital for their sales teams, just 22% of the companies surveyed were already up and running with their eCategory Management initiatives. 61% said that gathering online consumer and shopper insights was the main focus of their efforts to implement eCategory Management.
Consumer Goods Brands Are Battling Themselves To Move Forward
When it comes to pursuing their eCategory Management ambitions, consumer goods companies face a raft of operational and technical challenges. Getting the right system architecture in place was proving a problem for 50% of those surveyed, while the lack of a fully functioning e-commerce platform and/or the scarcity of reliable data on online shoppers were a barrier for 46%.
Commenting on the findings, Paul Thompson, Vice President and Global Sector General Manager Consumer Goods of Periscope By McKinsey, said, “Digital technology is dramatically changing shopping behaviours and forces consumer goods companies to reinvent their approach to channel management. Companies need to rapidly build eCategory Management capabilities, that utilise insights from online customers’ behaviours and preferences to drive revenue lifting pricing, promotions and category innovations. Advanced and prescriptive analytics solutions are key technology components for companies to understand and attract the millennial buyer.”