LONDON — Technological development has been “fast-changing and sustained” since the onset of COVID-19, emerging as a hot-button topic for the consumer goods industry in many forms, according to “Pursuit of harmony in turmoil: working together to make a difference,” a new report from the EY Global Consumer practice in conjunction with the Consumer Goods Forum.
With the COVID-19 pandemic forcing more consumers and companies to adopt ecommerce and remote working, both consumer behavior and the industry’s enterprise technology also underwent a significant shift, generating a “tidal wave of data” that provides a much more nuanced understanding of consumers and operations, the report noted.
Recent technology investments have accelerated several capabilities, such as transparency and efficiency, in several important areas including e-commerce, data management, supply chain and even cybersecurity.
“Structurally, this is one of the most underestimated topics in the economy,” said Steffen Greubel, PhD, chairman of the management board for Metro AG. “No one is really talking about it and it won’t go away. Cyberattacks inflict damages of around €200 billion on the German economy every year and it is also a massive act of economic sabotage.”
According to the report, the market turmoil of the last few years has not disrupted the progress of “disruptive technologies” such as artificial intelligence and the Metaverse since they tend to impact both consumer behaviors and business processes.
“A key focus for us is health care professionals,” said Brian McNamara, chief executive officer of Haleon PLC, whose products include vitamins and supplements. “So, we’ve invested heavily in our health portal, where health care professionals get education on our products. That’s extended our reach and is a key part of what we do.”
Digitization technologies are also accessible and advanced enough to provide opportunities for “value creation,” the report said.
“There’s an opportunity to find new revenue streams on retail media monetization,” Frans Muller, president and CEO of Koninklijke Ahold Delhaize NV. “You can use that to be more relevant to customers, make the shopping experience more effective, fund better offerings and get better insights. Quality of data is key, consent and privacy and ethical use of data is key, and it’s also a new revenue stream.”
According to the report, digitization promises to “transform” all types of company operations, from improved supply chain transparency to automation across business functions, providing early adaptors with a competitive edge before it becomes a norm in the industry, especially with how quickly technology grows.
“The big opportunities are now automating processes both in the supply chain, but also as a way of improving efficiency everywhere,” said Magnus Growth, president and CEO of Essity AB. “There are opportunities to improve the whole supply and demand planning process and reduce working capital.”
Technologies not only generate efficiencies but also challenge organizational structures, the report said.
“Sales these days is all about revenue growth management and digital tools,” said Dirk Van de Put, chairman and CEO of Mondelez International, Inc. “It’s no longer about talking well and being in front of your client. Our next CMO could come from our digital group rather than somebody that grew up in brand management.”
However, companies must invest in the skills to identify and manage the right technology investments if digitization programs are to succeed, the report said. Requirements change as quickly as technology evolves, hence why companies are favoring generative AI over the Metaverse, but investments in core analytics capabilities continue thanks to “the rising tide of data.”
“You can talk all day long about empowerment, but unless you have the data, analytics, and the capability to make the right decisions at the right level, you won’t be agile,” said Steve Cahillane, chairman and CEO of Kellogg Co.
Even then, companies should still put the human element first and foremost and treat automation and AI as “enablers,” the report said.
“We speak about productivity, digital transformation, technology, but we forget that all this is useless if you do not connect people, if you do not connect hearts, if you do not connect the minds of our different generations with a longtime purpose,” said Carlos Mario Giraldo Moreno, CEO of Grupo Exito, a South American retail company that offers food and non-food products.