Today, the CPG industry is experiencing an increasingly rapid technological boom, with new digital solutions and technologies emerging almost every six months, promising to completely transform the industry. Robotics, the metaverse, computer vision, digital twins, and, of course, AI have generated a huge amount of often exaggerated expectations. To navigate the abundance of technological offerings, businesses must maintain a strategic focus on what will provide long-term advantages.
Insights into the ever-evolving technological landscape within the CPG sector can be found in the reports published by the Promotion Optimization Institute (POI). With a decade-long track record, the State of Industry Report from POI is a trusted source of peer-benchmarked data.
Upon analyzing these reports, it is evident that certain key focus areas for CPGs have remained consistent over the years. These include; prioritizing data quality and efficient data management, adopting a comprehensive approach to enterprise planning, harnessing the power of advanced analytics, excelling in retail execution, achieving excellence in revenue growth management, enhancing partnerships with retailers through data and analytics, and driving change management.
These initiatives are in perfect alignment with the capabilities of advanced Machine Learning models, which are essential for setting a solid groundwork to drive strategic initiatives forward. This post introduces 8 strategic imperatives for CPGs in 2024. (Please refer to Figure 1 below)
Figure 1: 8 Strategic Imperatives for CPGs in 2024
1. Data management and quality: Organizing, cleaning, and harmonizing data is critical to enabling advanced analytics and providing "one version of the truth". Ensuring data quality is fundamental to making informed decisions and effectively collaborating with retail partners. A staggering 72% of companies encounter data quality issues which, if not addressed, can result in misleading analysis and business outcomes.2. Leverage AI/ML and Advanced Analytics: Leverage the power of AI to improve efficiency and provide predictive and prescriptive analytics for pricing, promotions, assortment, and retail execution.
3. Integrated Enterprise Planning (EPx): Break down data barriers to enable end-to-end, integrated planning across the organization.
4. Revenue Growth Management (RGM): Address all cross-functional areas to drive growth, profitability, and effective promotional and portfolio strategies.
5. Retail Excellence (RetX): Focuses on in-store execution, guided selling, promotional compliance, and connecting RetX to scheduling systems for in-flight monitoring.
6. Omnichannel Excellence: Develop balanced omnichannel strategies to ensure a seamless customer experience across physical and digital channels.
7. Change Management: Managing continuous change in people, processes, and technology through effective change management techniques.
8. Strengthen retail partnerships through analytics: Offering data-driven recommendations to retail partners to collaboratively adapt to evolving consumer demands. Strategically invest in retail media networks to amplify impact and engagement.
About the POI State of the Industry Report
The annual State of the Industry report by POI delivers a comprehensive overview of the consumer products sector, drawing insights from data collected through a multi-year survey of leading companies in the CPG industry. By maintaining consistency in survey participants, tracking progress over time, and welcoming new contributors annually, the report presents invaluable insights, strategies, and best practices for CPGs. For access to the complete report, click here.
