Digital Technologies Create Opportunities, Challenges for CPG Industry

As we have seen across other sectors, the consumer packaged goods (CPG) industry is now in recovery mode, with companies focused on growth and opportunities for global expansion to enhance both their top and bottom lines.

But, new research shows that CPG companies will sorely miss one newly critical capability as they expand to places like China and other emerging markets. Which critical capability is lacking in developing economies?

Digital technology.

Thriving in a Connected World, an intriguing new report from the Grocery Manufacturers Association (GMA) and PwC US, points out that today's CPG companies have become quite savvy at leveraging digital innovation to optimize service to consumers and trading partners.

For instance, the report suggests that mobile devices have improved workforce productivity in three specific areas:

mobility on the floor where workers use their digital devices for instant information,


in the field where mobile employees can make decisions on the spot with their devices, and



in flight where sales representatives, who historically traveled to each location to analyze performance, now use mobile technology to monitor activity, thereby increasing productivity.


What's more, the report says that as devices and wireless data networks grow and mature, rich multimedia capabilities will continue to improve business work flows, boosting productivity for individuals, as well as for sales, supply chains, distribution centers and stores.

These capabilities aren't available in emerging markets, however. According to the report, CPG companies lack detailed insights about consumers in China and other emerging markets, and many of the norms taken for granted in developed markets -- point-of-sale SKU numbers, predictable pricing models, even accurate information about how to reach a store or when it will be open -- cannot be assumed.

CPG companies will have to adapt accordingly. As Susan McPartlin, PwC's Retail and Consumer Industry Leader, says, digital data has transformed the industry in just a few short years.

"Today's consumers are more empowered with greater control of their shopping choices with the growing array of digital technologies like smart phones, tablets and social media. And they aren't shy about posting their feelings online about products, where they literally are handing over reams of potential insights that can create a tremendous opportunity for CPG companies that can find the patterns in the noise," she explained. "Just a few years ago, digital information meant one thing to senior executives risk. However, companies are no longer just thinking defense,' they are using the digital data to advance their competitive position, help improve all aspects of operations and get smarter about international expansion plans."

For more findings from the report, see this press release or download the full report at www.pwc.com/us/retailandconsumer.