How Digital Business Strategy Leads to Digital Transformation?

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Digital Transformation Trends for CPGs

Digital transformation sounds great, it's very attractive. And there's an ever-increasing investment behind digital technology, but does it mean we're already there? Are we able to transform our disconnected data into real business intelligence? Unfortunately, not just yet!

The good news is, we're getting there, and with increasing speed across all sectors. In 2021, we - CPGs - were too focused on adapting to continued eCommerce growth and digital transformation was one of the key trends. In 2022 it is going to be in the top 5 for sure, but this year is also going to be more about differentiation and customer experiences. So the question is, how does our digital business strategy lead to digital transformation?

Between 2018 and 2021, medium and large-size CPGs have reported around an 8% increase in technology budgets. However, a cohesive data management strategy is still in its infancy in many of those companies, which is a critical component supporting most of those digital technology investments.

CPG digital transformation trails other industries, the ability to manage product data is a key component in driving digital adaptation within any industry. While almost all CPGs have enterprise-level goals and strategies to get to the "becoming digital" eventually, many of them are somewhere between "passively digital" and “exploring digital”.

CPGs that successfully reach the “being digital” stage, will have linked enterprise systems, defined data governance, and robust tools to automate processes and?analytics to provide insights across the value chain.

So, what are the roadblocks to a successful digital business strategy?

1. We know the destination, but where is the roadmap? If we can support the goals with the strategy and with the directions, there would be more active players on the digital transformation team. An accessible dashboard would help track the progress and function as an accelerator for the team members. Employees across the organization would have visibility of the progress and their contribution to the endeavor.
2. How can we measure the performance/progress? If all (or the majority) of the stakeholders can agree on the end goal, then we can establish the metrics to measure the performance. Tied to #1 above (roadmap and dashboard), performance measurement also reinforces the enterprise-level learning, helps teams to pivot, reorganize and change tactics if the metrics are not hit.
3. Are we all on the same page about the "end goal"? This one sounds like a "Duh!" moment I know, but believe it or not, it's one of the toughest roadblocks to overcome. If we want the digital transformation project(s) to succeed, everyone in the enterprise needs to align on the desired outcome of this initiative. This is about organizational change, and changing organizations is no small task.
4. Leaders focus on short-term results instead of long-term vision. Of course, every leader will look for the EOY ROI in every tower. Budgets are tight and competition keeps pushing, yes, and it's always going to be like this. We must build this discipline to overlook short-term gains in favor of long-term benefits and not give in to demands to fund projects that might benefit only a business unit but don't support the broader digital transformation of the enterprise.
5. Culture ate strategy for breakfast, how about digital transformation? We're way past that discussion already. Gen Z is trailing Boomers, Gen X, and Millenials closely with the generational power and influence, we're already talking about Gen Alpha now (8-10 years olds). If our ongoing digital transformation hasn’t been transforming the way our company works already, it is simply not powerful enough. It has implications on our operational efficiency, customer experiences, innovation capability, as well as our company culture.

73% of executives are unable to derive actionable data-driven insights from their legacy, disconnected assets, plants, supply chains, and operations.

Sources: MIT Sloan Center for Information Systems Research (CISR), Accenture Research, 2021 (2,000+ executives spanning 15 industries)

Did your favorite brands make “The World’s 100 Most Valuable Brands in 2021” list?

++ The Facts ++

• The combined brand value of this list is $7 trillion.
• At the top of the list - 3rd year in a row-?Amazon?has a total brand value of $683 billion.

++ Insights ++

The Big Gets Bigger: Starting “strong” can give brands an edge, and the growth rate is correlated with high brand equity.

Marketing Makes a Difference: Brands with emotional associations, like pride or popularity, tend to see that translate into brand value growth.?Nike?and?The Coca-Cola Company?have mastered the art of emotional advertising.

Smart Investment Gives You Edge: It’s not just about developing an effective marketing strategy, it’s about executing that strategy, and continually investing in ways that perpetuate your brand message.?#Innovation?is the core value of?Tesla?brand, and they walk the walk—in 2020, the company spent $1.5 billion on R&D.

Agile eCommerce?& Leader Brands for '22.?A benchmark?report with a playbook?from the Profitero?team, to get "eCom Ready" next year.

• Just 17% of brands believe their companies are ahead of the curve (leaders)
• Most brands (71%) feel they’re just keeping pace up to the competition.
• Food & beverage brands are 1.5X more likely than all brands to feel like novices

+ Key Insights +

??eCommerce knowledge remains centralized. Only 15% of brands have integrated eCommerce into their entire business.

?? Budgets are hard-won. 41% of brands cite attributing online’s influence on offline sales as a top challenge. This is a huge jump from 28% compared to pre-COVID. It suggests that eCommerce leaders are still having to spend a lot of time gaining buy-in and proving their case for the budget when by now it should be pretty obvious that digital investments are key enablers of growth.

?? Data & analytics are being under-leveraged. 61% of brands are tracking eCommerce sales on their retailer partner websites and not much else. Few brands (14%) are investing in advanced analytics (e.g., predictive sales and inventory forecasting; causal analytics; attribution modeling).

+ 6 Playbook Tactics for: +

1. How to align team structure to be more eComm ready

2. How to manage eComm when specialized talent is hard to find

3. How to set eComm goals & incentives for the whole org. will buy into

4. How to build an eComm-ready supply chain

5. How to create (and optimize) content that converts

6. How to develop a digital toolkit to outperform in eCommerce

by MIT Sloan School of Management

NRF 2022?–?Retail’s Big Show

January 16–18, 2022 | New York | In-Person?| eCommerce & Retail

EEE Miami?– Ecommerce Experience Evolution

Feb?23, 2022?|?Miami (Florida) | In-Person?|?eCommerce

B2B Marketing Exchange

Feb?28 –?Mar?2, 2022?|?Scottsdale?(Arizona) | In-Person?|?Marketing &?B2B

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CXOs Can’t Do It Alone, Digital Innovation Happens Collectively

Why Micronamagement Is Bad Management

The Career Path to CEO Is Different for Women

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About Mert Damlapinar

Mert Damlapinar has been in director roles for eCommerce, digital marketing, and sales, he's currently Global eCommerce Lead, Sr.Mgr. for Mondelez International. He holds a master's degree in Applied Business Analytics from Boston University, executive management certificates in Integrated Digital Marketing from Cornell University, and Applied Data Science from Massachusetts Institute of Technology.

He's currently working on his 2nd book.

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