Over the past several months, we have seen the Coronavirus pandemic disrupt the lives of people around the world. Many retail and consumer packaged goods (CPG) companies are facing enormous amounts of business disruption and lost revenue, from which some of them are unlikely to recover.
Supply chain disruptions
A key question on many supply chain leaders’ minds right now is how to address both the current and future demand surges, while keeping costs manageable. One solution is to understand when and where the breakdowns in the supply chain may occur so that they can be addressed proactively rather than reactively. This can be done by leveraging business intelligence and analytics tools to understand risk factors in your supply chain, for example, potential closures of a country’s logistical infrastructure (ports, roads, etc.). It is important to map out the supply chain network in-depth and identify weak spots, such as when you are sourcing a critical product or part from a single supplier.
A resilient supply chain must have alternative suppliers, preferably in different geographies, so that a work stoppage or transportation issue in one country does not derail the overall supply chain. Supply chain mapping exercises can be time-intensive depending upon the complexity of the supply chain, but they are worth the investment when compared to the cost of a major disruption. Just as important as supply chain mapping and demand-sensing analytics, companies need a digital dashboard to visualize these risk factors and provide actionable insights around how they can be addressed. Artificial Intelligence, when combined with big data, can support a business in developing alternate plans in the face of a supply chain bottleneck.
The retail crunch and shift to Ecommerce
Beyond the immediate effects of the current retail crisis, many business leaders expect the consumer buying habits to change in the long-term. Ecommerce sales for grocers has nearly doubled in March 2020, compared to the same period in 2019, while overall Ecommerce sales are up by around 25% 1. In conjunction with this trend, the use of buy online pick-up in store (BOPIS) and curbside pickup options have increased by 62%. Even when stores eventually reopen, there will be consumers who continue to avoid brick and mortar retail stores in favor of Ecommerce.
Online was already the fastest growing channel of sales for many retail & CPG companies, but up until now it accounted for a relatively small portion of overall revenues 2. Now Ecommerce seems poised to account for a significant share of the overall retail revenues, along with the Brick & Mortar and Wholesale channels. CPG companies that had never sold direct-to-consumer are likely to invest in their own Ecommerce offerings to address this trend in the long-term.
Faced with this new reality, many retailers and CPG companies will need to put renewed emphasis on their Ecommerce capabilities, to ensure that they are providing an ‘Amazon-like’ experience for customers.
Internet search engine optimization, real-time inventory visibility, order status tracking, mega menus for site navigation, and mobile-ready information architecture are just a few of the major capabilities that consumers have come to expect from an Ecommerce experience.
Reinvention key to resilience
While the COVID-19 pandemic is continuing to wreak havoc in many parts of the world, there are also opportunities for CPG and retail companies to emerge stronger than they were before. For companies that have resisted making the investments needed for true digital transformation, this pandemic should serve as a wake-up call for them to modernize their business processes and operations. Understanding how this situation has impacted consumer preferences and purchasing habits in the long-term will be key for manufacturing, retail and CPG players to reimagine themselves and come out stronger on the other side.
The Security Operations Center, or SOC, is often the first solution that comes to the mind…
At the onset of the current Covid-driven pandemic, no one visualized either the timeframe it…
In the era, where there is an exponential increase in a number of breaches per year and decrease…
The world has come a long way from the era of dial up internet connections that offered humble…