The brand and consumer packaged goods (CPG) industries are facing a changing world. Evolving consumer demands and globalization have created price pressures. Agile new entrants are selling direct to consumers, stressing traditional distribution models. But the latest technologies, such as the Internet of Things (IoT) and blockchain, could help incumbents find opportunities they could have never imagined before. Are you ready?
CPG and brand-oriented manufacturing companies are at the center of a changing landscape, one that can present many opportunities for organizations that eagerly embrace the transformation in front of them. Growth has slowed for many large incumbents, and smaller new entrants are appearing to seize their share of the market. Not only are they competing for shelf space in supermarkets and stores throughout the country, they’re also selling direct to consumers online—and that’s putting pressure on more established brands.
This shift is partially driven by a new generation of consumers. In the age of social media, needs and wants change fast. In a few swipes, millennials will happily buy the latest health supplement or a trendsetting new dress that’s gone viral online. But they’ll research more expensive purchases carefully, scouring online reviews and price comparison websites to find the most competitive offer.
As a CPG or brand manufacturer, that means you need to deliver affordability, variety and quality, all while responding to a rapidly changing market. And you need to give buyers a world-class experience—often this means exploring new distribution channels like e-commerce and building direct relationships with consumers. Fortunately, the latest technologies can help you find opportunities in this environment by enabling you to become more innovative, agile and responsive, without disrupting daily operations or compromising on product quality.
Here are five technologies that could give you an edge in brand and CPG manufacturing.
Speed up innovation with digital twins
You need to get products to market faster than ever. But you also need to manage the cost of production and innovation. As a virtual replica of a physical system, digital twins let you test new manufacturing environments, machinery and processes. This helps you reduce the risk of failure and adopt a more experimental approach, regularly trialling designs and improving internal efficiencies.
Offer transparency with blockchain
Today’s customers don’t just want affordability and variety—they’re also interested in where products come from. There’s a rising demand for environmentally sustainable and ethically produced goods. Blockchain or distributed ledger technology can provide transparency across an entire manufacturing supply chain, allowing your consumers to see the country of origin for each material or component. It can also help you detect and report counterfeit goods or materials—which is important for your revenue, brand reputation and maintaining product safety.
Gain visibility with IoT
You’re under increasing pressure to cut costs while getting products to market faster. And one of the best ways of achieving this is by utilizing IoT sensors, which can give you granular visibility of shipping—not just of cargo routes and expected arrival times, but even tracking individual items or materials and where they’re packed in a hold. This information can help you reroute deliveries if there’s a problem, or source replacement materials from a different supplier.
Promote safety with augmented reality
Augmented reality (AR) technology is set to have a big impact on manufacturing. It can be used to provide realistic and engaging safety training on your shop floor. Not only is AR training effective, it’s more fun than learning from a manual and can help you attract millennials and digital natives to the workforce. AR can also improve safety during the production process, by allowing employees to access important real-time data about machinery and equipment as they work. It can alert them if they’re standing too close to moving parts or interacting with a machine incorrectly.
Drive growth with artificial intelligence
More and more manufacturers are cutting out third-party retailers and selling direct to consumers. But to make a success of this model, you need to take full ownership of the customer journey.
As you gather vast amounts of data based on online behavior and purchasing patterns, artificial intelligence (AI) can help you make sense of it all. By identifying patterns in data, AI can help you determine which channels your customers prefer, how they like to purchase and which pricing models work best. These insights can even help you forecast future demands, identify new niche markets and drive product innovation.
Be ready for change
Of course, whichever new technologies you adopt, there will be other crucial considerations. How will your technologies interact with each other, and will they integrate with your existing systems? In the case of a merger or acquisition, will you combine your systems or keep them separate? And do you have the right underlying infrastructure and network and cyber risk management strategies to keep everything running smoothly?
To learn more about the latest technologies making an impact in CPG—and how to implement them successfully—please contact your Verizon Account Representative.