the digital transformation journey, - wipro€¦ · · 2013-10-28the digital transformation...
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WHAT DOES DIGITAL TRANSFORMATIONREALLY MEAN?
Expert Perspective • By John Rossi, Global Leader, Wipro’s Consumer Goods Consulting Group
If we asked 100 people “what is digital transformation?” we would
receive at least 99 different answers, and those two people that
gave the same answer probably sat next to one another while
taking the survey. Why do many find it difficult to describe digital
transformation? It’s much more than e-commerce. Digital
transformation should be an eye-opening exercise for your company
in creating new ways to make Life simpler by digitally linking front and
back-end processes. It will enable “simpler” for your employees,
trading partners, shoppers and consumers.
At Wipro, we help our client’s realize digital transformation
throughout the enterprise. It occurs in warehouses, distribution
centers, sales and marketing departments, across finance and even
in the CEO’s office.
What if you redesign a plant or warehouse, would you do
it differently considering the efficiencies gained via digital
transformation? How about a sub-$1,500 device that is a
“hardened for the warehouse” smart device that replaces
handheld devices, laptops and back-office computers?
How about being able to accurately predict slow-moving
merchandise and proactively push via loyalty programs better
reasons for them to shop for those items today, and by tomorrow
morning, if it’s still behind the demand plan, sending them
personalized offers to entice them to shop? Would this change
expiry issues in food & beverage? How about markdowns in
apparel & footwear? Or revolutionize trade promotion spending?
What if you sent your VIP customers real-time personalized offers
as they enter a retail partner’s parking lot that are only good for
the next 90 minutes? Would you better serve these shoppers in
the future by understanding their adoption habits? The above
questions are already answered with great success. Digital
transformation needs to occur across the entire enterprise. It’s
highly cost effective, increases your topline, and allows you to
better understand your shopper and consumer.
Custom Research
DIGITAL TRANSFORMATIONA work in progress
As more and more business activities are conducted electronically,
the need for a formal digital strategy becomes apparent. Add
social media into the mix, where consumer goods (CG)
companies can interact with end consumers like never before, and
it’s a little like the wild wild west! Many companies have pockets
of digital activity, but it’s often disconnected and even
experimental. To get a better understanding of what is really going
on, CGT partnered with Wipro to uncover insights about an
industry in transition.
Digital interactions can take place with consumers, shoppers and
households, as well as business partners, like brokers, retailers and
suppliers. The efforts, however, are not yet coordinated across the
enterprise, as only 36 percent have a common strategy in place.
Twenty-seven percent are working toward an enterprise-wide
strategy, but another 27 percent also have brand-by-brand
strategies in place without an overarching requirement for a
common direction. The primary purpose for using digital
technology for almost half of survey respondents is to grow
revenue, followed by build consumer loyalty at 35 percent
(see figure 1).
Roughly one-third have loyalty programs in place today, either
across all major brands or through individual brands, and 24
percent are planning to develop one within three years; 39
percent have no plans for a loyalty program. Multiple channels are
being leveraged to drive revenue, but direct-to-consumer
channels are ranked the highest at 39 percent, followed by web at
27 percent and social at 24 percent. Interestingly, the mobile
channel was ranked last at 9 percent — a number we expect, rise
dramatically in the near future.
Focusing on shopper interactions specifically, we find an area ripe
for development. Many companies are transitioning to digitized
versions of familiar marketing tactics, where a full 70 percent of
respondents are marketing directly to shoppers via digital touch
points, like e-coupons and mobile devices (see figure 2). Ironically,
24 percent rely on retail partners to provide digital services to
shoppers. Some companies are even leveraging digital to reach
shoppers in emerging markets with 12 percent reporting it’s
implemented and working, and another 39 percent making
headway, but it’s too soon to tell. Direct to consumer emerges
again as a viable option (maybe webvan was just ahead of it’s
time?) with 36 percent selling direct through mobile and web sites.
Our respondents currently average 33 percent of revenues
directly from consumers, and they expect it to rise slightly to 39
percent in five years.
Similar to the promise of big data, the real benefit may come through
connecting digital touch points to consumer insights. A full 64
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Figure 1Main purpose for using digital marketingPURPOSE
35%
5%
45%
15%
Digital marketing approaches Note: multiple responses permitted
METHOD Figure 2
36%
3%
0%
70%
24%
Figure 3
25%
38%
19%
19%
Other
GrowingRevenue.
More effectivego-to-market thanusing trade funds.
Building consumer loyalty.
We directly market to our shoppersvia digital touchpoints(via e-coupons, mobile devices, etc.).
We directly sell to our shoppersvia mobile/web sites.
We don’t digitally market toour shoppers; our retailpartners provide this service.
We employ a buyanywhere/returnanywhere capability.
We employ a buyanywhere/returnto us capability.
MODE
Current mode of digital infrastructure Note: chart does not total 100% due to rounding.
Developing - sometests and learning.
Building - we understand whatchannels drive benefit most andare reengineering a platform todeploy these channels and back-endsystems to better serve the shopper.
Scaling Best Practices - we have theorganization and platform in place toextract and scale best practices.
Seeing Results - We are measuring theeffectiveness of consumer engagementsand incremental business benefits.
spend and new product development
each at 52 percent. Interestingly,
operational areas such as supply chain,
inventory management and distribution
are each under 30 percent.
As with many transformations, technology
infrastructure is critical to success (see
Figure 3). many companies are still in
development, with 25 percent building
platforms, and 38 percent early in the
testing and learning cycle. thers are further
along, with 19 percent reporting that they
have the organization and platform in
place to scale best practices, and another
19 percent are seeing actual results by
measuring the effectiveness of consumer
engagements and incremental business
benefits. We assumed we would find
disparity by company size, but there were
no clear trends as the entire Industry
seems to be cautiously adopting digital
strategies that have the potential to
provide enormous benefits. The
technology itself involves multiple parts,
which need to be consolidated to leverage
omni channel opportunities. Currently,
almost half of respondents consolidated
consumer facing systems at 48 percent
and insights systems at 47 percent,
followed by Digital Asset Management,
registration and security.
percent are currently connecting findings,
with 21 percent planning on it for the
future. Those insights are being used to
provide value for many different business
processes, with trade promotions leading
the way at 66 percent, followed by
market mix at 59 percent and media
“The efforts, however, are not yet coordinated across the enterprise, as only 36 percent have a common strategy in place for digital interactions.”
70%
45%
3
5
1. Revenue wise, what is the size of your organization?
Revenue
Less than $500M
$500M to $1.0B
$1.1B to $2.5B
$2.5B to $10B
$10B+
%
42%
12%
15%
18%
12%
2. Which best describes your company?
Company
Food & Beverage
Home & Personal Care
Apparel & Footwear
Other
%
52%
36%
3%
9%
Less than $500M
$500M to $1.0B
$1.1B to $2.5B
$2.5B to $10B
$10B+
Food & Beverage
Home & Personal Care
Apparel & Footwear
Other
12%
42%
15%18%
12%
52%
36%
3%
9%
3. Adoption: Which statement best reflects your digital strategy direction?
Digital strategy direction
Common strategy adopted across the organization
Brand by brand strategies exist but common strategy not required
Digital Strategies
Common strategy required and in development
No strategy at this time
Common strategy desired but no plans for development
%
36%
27%
27%
6%
3%
4. How do you digitally reach the shopper today? Multiple responses permitted.
Digitally reach shopper
We directly market to our shoppers via digital touchpoints (via ecoupons, mobile devices, etc.)
We directly sell to our shoppers via mobile / websites
We don't digitally market to our shoppers ourselves - our retail partners provide this service to our shoppers
We employ a buy anywhere / return anywhere capability
We employ a buy anywhere / return to us capability
%
70%
36%
24%
3%
0%
27%
3%
27%
6%
36%
Common strategy adopted
Brand by brand strategies exist
Common strategy required; in development
No strategy at this time
Common strategy desired; no plans for development
We directly market to our shoppers via digital touchpoints
We directly sell to our shoppers via mobile / websites
We don't digitally market to our shoppers ourselves
We employ a buy anywhere / return anywhere capability
We employ a buy anywhere / return to us capability
36%
24%
3%0%
70%
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7
5. Who are you digitally interacting with today? Within the next 3 years.
Digitally interacting with
Your Supplier / Farmer
Agent / Broker
Wholesaler
Retailer
Shopper
Consumer / User
Household
Within 3 yearsToday
73%
53%
83%
56%
37%
36%
39%
53%
71%
44%
60%
77%
88%
74%
53%
73%71%
53%
6. What type(s) of shopper loyalty programs do you have today?
24%
18% 18%
39%
We don't have one and have no current plans for one
We don't have one but are planning on it within 3 years
Individual brands have them, but it's not enterprise-wide
Ours is Enterprise-wide across most / all major brands
Shopper loyalty program
We don't have one and have no current plans for one
We don't have one but are planning on it within 3 years
Individual brands have them, but it's not enterprise-wide
Ours is Enterprise-wide across most / all major brands
%
39%
24%
18%
18%
Your Supplier/Farmer
Agent/Broker
44%
83%
60%56%
77%
37%
88%
36%
74%
39%
Wholesaler Retailer Shopper Consumer/User Household
27%39%
24%9%
35%45%
15%5%
Direct-to-Consumer
Web
Social
Mobile
Digital channel
Direct-to-Consumer
Web
Social
Mobile
%
39%
27%
24%
9%
7. Which digital channel is driving the most revenues today?
Growing revenue
Build consumer loyalty
More effective go-to-market than using trade funds
Other
Main purchase for using digital
Growing revenue
Build consumer loyalty
More effective go-to-market than using trade funds
Other
%
45%
35%
15%
5%
8. What is your main purpose today for using digital?
8
9
64%
15%
Yes
Not yet, but already in plans
No
Connecting touchpoints
Yes
Not yet, but already in plans
No
%
64%
21%
15%
9. Are you directly connecting your digital touchpoints into shopper/ consumer insights?
Trade Promotion
Market Mix
Media Spend
New Product Development
Supply Chain
Inventory Management
Distribution
10. Which areas are you using digitally-driven shopper / consumer insights for today? Multiple responses permitted.
Areas interacting with
Trade Promotion
Market Mix
Media Spend
New Product Development
Supply Chain
Inventory Management
Distribution
66%
59%
52%
52%
28%
28%
24%
%
21%
66%
52%52%
28%28%
24%
59%
11. Are you using digital to reach shoppers / consumers in emerging markets?
Using digital to reach shoppers?
Yes, and it's working
Yes, but too soon to tell
Not yet, but it's in our near-term plans
No, and no plans
We aren't looking at emerging markets
%
12%
39%
30%
9%
9%
Shopper interactions
Mobile
Web
Social
In Store
>10%
12%
14%
17%
11%
Yes, and it's working
Yes, but too soon to tell
Not yet, but it's in our near-term plans
No, and no plans
We aren't looking at emerging markets
<10%
>10%
>20%
>50%
>70%
12. What are the percentages of shopper interactions per channel:
<10%
58%
18%
41%
39%
>20%
31%
18%
21%
7%
>50%
0%
32%
14%
11%
>70%
0%
18%
7%
32%
12%
39%
30%
9% 9%
Mobile Web Social In Store
12% 14%17%
11%
58%
18%
41% 39%
18% 21%
7%0% 0%
32%
14%11%
18%
7%
32%31%
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13. What percentage of your revenues TODAY are:
Revenues TODAY
Direct-to-Consumer
Through Retailer / Distributor
Average %
33%
76%
Revenues IN 5 YEARS
Direct-to-Consumer
Through Retailer / Distributor
Average %
39%
68%
Direct-to-Consumer
Through Retailer / Distributor
Direct-to-Consumer
Through Retailer / Distributor
33%
76%
39%
68%
14. What percentage of your revenues IN 5 YEARS will be:
16. Have you consolidated systems and functionalities to leverage omni-channel opportunities? Which ones?
Digital Infrastructure
15. What mode are you in?
Mode %
38%
25%
19%
19%
Consolidated systems
Registration
Insights
Digital Asset Management (DAM)
Publishing
Consumer-facing
Contact Centers
Security
No
28%
13%
23%
41%
17%
Yes
41%
47%
43%
30%
48%
28%
34%
21%
28%
Future
31%
40%
33%
30%
34%
In-Store Selling
In-Store Insights
41%
41%
38%
38%
31%
24%
41%
34%
Developing
Building
Scaling best practices
Seeing results
Yes
No
Future
38%
25%
19% 19%
Registration Insights Digital Asset Management
Publishing ConsumerFacing
ContactCenters
Security In-store Insights
In-store Selling
47%
13%
40%
43%
23%
33%
30% 30%
41%
48%
17%
34%
28%
41%
31%
34%
41%
24%
21%
38%
41%
28%
38%34%
41%
31%
28%
Developing - Some test and learns have been done
Building - You understand what channels drive business benefit most and are re-engineering a platform to deploy these channels and back-end systems to better serve your shopper
Scaling best practices - You have the organization and platform in place to extract and scale best practices
Seeing results - You are measuring the effectiveness of consumer engagements and incremental business benefits
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About Wipro Ltd.
Wipro Ltd. (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company that delivers solutions to enable its clients do
business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of "Business through
Technology" - helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services,
a practitioner's approach to delivering innovation, and an organization wide commitment to sustainability, Wipro has a workforce of 140,000
serving clients across 57 countries.
For more information, please visit www.wipro.com or mail [email protected]
About Wipro Consumer Goods
Wipro’s dedicated Consumer Goods practice has over 3000 + consultants and deep expertise with Tier 1 companies in the areas of Sales
& Marketing, Value Chain Optimization, Digital Transformation, and Analytics driving Insights. Our focus includes speci�city related to
Food & Beverage, Home & Personal Care, Apparel & Footwear and Agribusiness & Tobacco segments. Wipro’s offerings include Systems
Integration, Consulting and BPO. Our industry leading solutions include ownership of Promax, SAP’s newest offerings, Salesforce.com, and
Market Mix Optimization.
About Consumer Goods TechnologyConsumer Goods Technology (CGT), an integrated media brand, is the leading resource for consumer goods executives looking to improve
business performance. Delivering content in print, online and face-to-face, CGT reaches an audience of more than 54,000 consumer goods
executives ranging from managers and directors to VPs and CIOs. CGT also covers all major segments of the consumer goods sector, including
Food, Beverage, Packaged Goods, Consumer Electronics and Footwear. For more information on CGT, visit www.consumergoods.com.
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