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Overcoming roadblocks to digital transformation in the CPG industry

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Overcoming roadblocks to digital transformation in the CPG industry

by Arturo Mendiola


Competitive encroachment from digital-native DTC brands

Recently, Deloitte published a digital maturity curve and outlined where a large contingency of CPG companies fall on the spectrum. Generally, what they found is that most CPG organizations are either passively digital or exploring digital. Which boils down to a slow progress into operating the business and customer experience with digital as a pillar to the model. Comparatively, the CPG industry is slightly behind other industries with harnessing customer data and deriving insights from them to influence buying decisions.  
Interestingly is that many organizations that are prioritizing digital, have developed roadmaps with identified initiatives to modernize their martech stack, digital capabilities and internal processes; but have yet to realize those plans and brought them to bear. So, what’s dragging CPG companies and slowing them down from moving the needle on getting closer to digital transformation? 

Progress in the CPG industry has been impeded by various challenges, one of the major ones being legacy software platforms. The opportunity cost to diverge from these platforms is often deemed too great. Siloed teams also hinder progress, as individual business units operate too autonomously, without tapping into enterprise systems and platforms to enhance marketing and customer touchpoints. This mentality is coupled with the belief that the war of customer conversion is won on the shelf, whereas in reality, digital plays a significant role in wallet-share, influencing buying decisions, and being the end-to-end journey for DTC CPG brands and products. 

A case for innovation  

75% of CPG shoppers…used digital channels in their most recent shopping journey to become inspired, browse research or select a brand. (Deloitte) 

A quarter of CPG shoppers that used brand websites or mobile apps to browse or research before or during their most recent journey also reported spending 108% more than shoppers who didn’t. (Deloitte) 

Brands with the strongest omni-channel customer engagement strategies retain an average of 89% of their CPG customers, in comparison to 33% of companies with weak strategies. (Harvard Business Review) 

One brand that has recently been recognized for its innovative use of digital is Colgate-Palmolive’s Hill’s pet food and nutrition brand. The brand’s key strategy is creating relevant emotional engagement with customers through personalized digital engagement: 

Their website balances specialized product (‘science-based pet nutrition’) content with tailored preferences and recommended products for ‘my pet’. 

Hill’s leverages analytics, along with 3rd- and 1st-party data to interact with customers during digital touchpoints. 

They lean heavily in e-comm – recently relaunched packaging with an e-comm first design. 

Their focus on elevating digital capabilities has helped accelerate growth with net sales for the Hill's Pet Nutrition business expanding by 14.5%, and organic sales growing to 18% (YOY, FY21-22).  (Consumer Goods Technology) 

Where Sitecore XM can help 

To aid in helping CPG enterprise companies help achieve results like Hill’s is adopting and incorporating a purpose-built digital experience platform like Sitecore XM.  

Sitecore XM Cloud is a flexible, enterprise-level software-as-a-service (SaaS)-based content management system (CMS). Its strength lies in giving marketers and content authors ease-of-use through its visual authoring capabilities, while providing back-end developers the flexibility of development (including headless architecture). Which means, if your CPG organization is a house-of-brands, each brand can leverage global templates and components for 80% of their features, functionality and page builds, while allowing for 20% of customization to offer that higher-touch aspect to reflect individual brand uniqueness and nuances.  

Key benefits of the platform include: 

  • Data insights: With its embedded visitor analytics, XM Cloud can provide visibility into user engagement at a page-level, along with activating personalized page variants for different target audiences (e.g., users looking for dermatology resources versus those needing oncology information). Internal teams can get insights out of the system to make better data-driven decisions in support of improved patient satisfaction. 
  • Speed-to-market: Being SaaS-based, XM Cloud doesn’t require heavily involved and time-consuming upgrades, as all platform updates are conducted automatically. Meaning it would not slow down internal teams from ensuring content and resources are always delivered to the right audiences. Additionally, with the built-in visual authoring capabilities, non-development resources can easily update content on the website.  
  • Page performance: Because it’s SaaS-based, it can deliver high-performance (page speed) for web experiences. Helping to ensure information and resources patients are looking for are delivered within milliseconds (and avoiding costly calls directly to care administrators, when a task could have been done online). 
  • Security: XM Cloud is always up-to-date, scales on-demand, and meets rigorous controls so organizations can power their global, content-driven digital experiences with confidence. 
  • Scale: Sitecore Experience Manager Cloud’s SaaS and composable nature allows you to easily scale up and down your project based on business requirements. If your business grows, you can add modules, or remove tools you are not currently using. 

If you’re exploring avenues to modernize and ways to get to the next level of digital maturity – ultimately ‘being digital’ – we’d love to help.  

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