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Kara Romanow, CGT WWW.WIPRO.COM THE DIGITAL TRANSFORMATION JOURNEY, A Wipro CGT Research Report

THE DIGITAL TRANSFORMATION JOURNEY, - Wipro€¦ ·  · 2013-10-28THE DIGITAL TRANSFORMATION JOURNEY, ... Wipro’s Consumer Goods Consulting Group If we asked 100 people “what

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Kara Romanow, CGTWWW.WIPRO.COM

THE DIGITAL TRANSFORMATION JOURNEY,A Wipro CGT Research Report

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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

2

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

DETAILED FINDINGSAugust 2013

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%

6

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%

10

11

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

12

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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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