Consumer products intelligence and retail therapy

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The French philosopher Denis Diderot once said, “The first step towards philosophy is incredulity.” The Diderot Effect definitely played its part but are we looking at something different in this day and age?

The pandemic accelerated a shift in consumers’ digital behaviors far more drastically than anticipated. As countries around the world reopen, we observe four priority themes emerging with consumer products:

  1. Sustainability
  2. Digitalization
  3. Efficiency
  4. Diversification

If we look at each in turn:

Sustainability

A large theme here is reduction in CO2 emissions. With increased transparency into logistics data, CP organizations are optimizing the distribution to customers – route by route – creating value for them and customers, but also importantly saving CO2 emissions in the process. Many of our customers in the CPG space have saved tens of millions of euros due to a more efficiency transportation network and CO2 in the process. Capgemini’s assets in Carbon Footprint in Outbound Transportation, an SAP S/4HANA solution uses transportation management and logistics business networks to solve these problems.

Digitalization

Fifty-eight percent of average global consumers say they are on the internet constantly (source Hootsuite), so there is a growing trend to move from B2B (retailers) to B2C/Direct to Consumer (D2C). This needs to be supported by new e-commerce platforms linked closely to social media so market sentiment and demand can be constantly reviewed. Some CPG manufacturers are getting into the D2C game by buying up fast-growing new entrants, e.g. Unilever’s USD1 billion acquisition of Dollar Shave Club and Nike already generates more than USD9 billion in D2C sales. SAP’s utilization of C/4HANA and the Customer Experience Platform is perfectly poised here with how and what Capgemini delivers.

Efficiency

CP organizations are shifting their focus to the efficiency of the individual production line and to overall equipment efficiency. For example, any large consumables enterprise must ensure that no part of raw material spoils or is lost. Our customers have saved millions of euros that would otherwise have wasted their raw product. CPs are also reducing complexity and share more products across market. Capgemini is using SAP’s Manufacturing Intelligence & Integration solutions here.

Diversification

CP organizations are broadening their portfolio to keep up with market trends. For example, only ~50% of Coca Cola’s revenue is from carbonated drinks, with the other 50% from dairy, fruit juice, water, and tea and coffee. Other companies are similarly diversifying in by-product from what their essentially deal with in manufacturing as well as cross-pollinations. This is in line with the thinking of the Renewable Enterprise, where a flexible SAP landscape built on MPSA and standard functionality allows to quickly develop new business models.

 The magnitude of change is too vast to cover in a two-minute read, but I hope you get a sense that our Digital Core with SAP S/4HANA offering is ready to tackle the intelligent components of the consumer products sector. Let’s talk. Contact me directly to find out more.

 

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