OMNI-SHOPPERS EVERYWHERE: The challenges of digitalization for the food trade and the consumer goods industry
Anuga Executive Summit 2017 to be devoted to digitalization
Anuga Executive Summit 2017 will focus on the mega-trend digitalization. It goes without saying that the digital revolution has already affected food manufacturers and the food trade. New data-driven concepts are not only transforming the sales, marketing and procurement of food, but also product development and the organization of the flow of goods. These developments are accompanied by an evolution of corporate culture, because the management of digital business units requires new approaches to team leadership, for example.
Several business models are currently competing with each other in the field of digital marketing strategies for food products. These models include digital marketplaces, B2C models, specialty vendors, subscription models, and purely online supermarkets that have their own logistics and bear their own product-related risks.
This diversity is accentuated by the fact that most market researchers now predict that consumers will become omni-shoppers in the near future and combine various sales channels with one another as they see fit. This will apply to food purchases as well. Consumers will expect to have a networked shopping experience that merges the stationary trade with online media and the use of mobile devices.
In the near future, customers will therefore obtain information mainly from social media and at virtual marketplaces and product comparison portals. To do this, they will primarily use smartphones or tablets. That’s why mobile apps are becoming increasingly important for obtaining information before and during the food purchasing process as well as for marketing products.
Networked shopping experiences for omni-shoppers
To obtain purchasing advice, consumers will make even more extensive use of messenger services. This is one of the reasons why more and more retailers and consumer goods manufacturers are currently intensively analyzing the potential posed by chatbots. The vision is to use artificial intelligence to create conversational robots that simultaneously act as virtual shopping assistants and digital purchasing advisors. The first pilot systems are already being tested in practice.
The technology for the increasingly rapid merger of online and offline commerce already exists. For example, sensors in the sales area can already communicate with customers’ smartphones. This enables the system to precisely determine the shelf a customer is standing in front of and thus transmit appropriate product information and purchasing incentives to the consumer’s mobile phone. Such a mobile-phone-based shop navigation system could also be used to analyze customer movements.
A chief digital officer for the consumer goods industry
However, digitilization is not only bringing major changes to commerce, but also for consumer goods manufacturers. These companies are increasingly concerned that digital business models will be better and more inexpensively able to serve the newly defined customer needs.
Manufacturers of FMCGs are responding to this danger in a variety of ways. On the structural level, more and more companies are creating a separate unit for the digital business, headed by a CDO. They are also establishing separate subsidiaries for drawing up digital business models, acquiring other companies to utilize such know-how, and forming partnerships with successfully operating start-up developers.
Success factors for the omni-channel trade: supply chain management and logistics
Companies that understand consumers to be omni-shoppers who take a comprehensive view of sales channels, also have to act more holistically and customer focused in their supply chain management and logistics. Not only do omni-shoppers want to be able to buy everywhere and at any time, they also want goods to be delivered at any time and to any location. Single channel strategies are increasingly failing to meet such changed consumer needs.
The level of direct contact to the end customer varies, depending on the channel used. Unlike the situation in the stationary trade, online commerce is experiencing a shift in its customer contact. The most direct contact is no longer enjoyed here by retailers, but by parcel deliverers and thus by the providers of logistics services. As a result, logistics companies have access to customer information that complements that possessed by retailers. An information advantage is achieved when both types of data are combined.
Empirical values from previous deliveries enable logistics companies to estimate, for example, how the architectural situation is like in an area, whether there are secure places where parcels can be deposited, at what times people are most likely to be at home and how often goods have been returned. As a result, they have an important store of data that can be mined with the help of digital systems and that is indispensable for good omni-channel solutions.
The delivery of goods at specific times and the serving of new delivery points such as parcel boxes pose major challenges with regard to route planning and the management of ordering processes. Self-learning and self-driving systems could be used for such purposes in the foreseeable future. Even the autonomous delivery of parcels by robot vehicles in public areas is no longer just a vision.