91% say Building Capabilities That Enable a Better Understanding of Online Shopping Buying Behavior is a Strategic Priority, but for 75% the Journey is Only Just Beginning
New York and London – July 14, 2017 – Consumer Goods companies are learning from traditional eCommerce retailers when it comes to their use of online customer and competitor insights to understand buying patterns, price sensitivity, new competitive product offerings and improve category management for eCommerce channels. 91% of the respondents see eCommerce as a strategic priority, and 57% are investing in eCategory Management to support fast-paced growth in online market share, by better understanding and reacting to the online consumer. These are some of the findings of a new survey report unveiled today by Periscope® By McKinsey, a suite of solutions focusing on price, promotion, assortment, sales and marketing optimization to achieve sustainable revenue growth.
However, the survey also showed that for the overwhelming majority of Consumer Goods companies (75%), the journey towards using advanced eCategory Management capabilities to inform product assortment, pricing and promotional decision making in online channels is only just beginning.
The survey, conducted at the recent Consumer Goods Sales & Marketing Summit 2017, benchmarked online assortment, merchandising, pricing and promotions optimization technology across Consumer Goods companies. It also investigated how companies use online customer behavior and preferences to inform digital marketing, product purchasing and promotional decisions, as part of an integrated multichannel game plan.
Building eCommerce capabilities are a top priority
An impressive 91% of respondents said building eCommerce capabilities was a top strategic priority for their business, highlighting that digital commerce is now viewed as a growth engine by the majority of Consumer Goods companies.
Asked to rank how important it is to acquire these capabilities, 15% said it was viewed as the #1 priority for their company; 58% said it was a top three priority; and 18% identified it as being a top five business priority.
What’s driving the Consumer Goods change?
Asked about the reasons for improving their capabilities, the need for customer centricity echoed throughout the findings: Evolving consumer needs and expectations was the top reason for 81% of respondents. This was followed by the desire to build a channel for direct customer interaction (45%), and the ability to leverage digital to raise brand awareness or control online representation (42%).
Moving towards eCategory Management
While 48% of respondents ranked building eCategory Management capabilities as a key priority for senior management and 30% said it was vital for their sales teams, just 22% of the companies surveyed were already up and running with their eCategory Management initiatives. 61% said that gathering online consumer and shopper insights was the main focus of their efforts to implement eCategory Management.
Consumer Goods brands are battling themselves to move forward
When it comes to pursuing their eCategory Management ambitions, Consumer Goods companies face a raft of operational and technical challenges.
Getting the right system architecture in place was proving a problem for 50% of those surveyed, while the lack of a fully functioning eCommerce platform and/or the scarcity of reliable data on online shoppers were a barrier for 46%.
Commenting on the findings, Paul Thompson, Vice President and Global Sector General Manager Consumer Goods of Periscope By McKinsey, said, “Digital technology is dramatically changing shopping behaviors and forces Consumer Goods companies to reinvent their approach to channel management. Companies need to rapidly build eCategory Management capabilities, that utilize insights from online customers’ behaviors and preferences to drive revenue lifting pricing, promotions and category innovations. Advanced and prescriptive analytics solutions are key technology components for companies to understand and attract the millennial buyer.”
Click here to download a full copy of the report.
Founded in 2007, the Periscope® By McKinsey platform combines world-leading Intellectual Property, prescriptive analytics and cloud based tools with expert support and training. It’s a unique combination that drives revenue growth, both now and into the future. The platform offers a suite of Marketing & Sales solutions that accelerate and sustain commercial transformation for businesses. Periscope leverages its world-leading IP (especially from McKinsey but also other partners) and best-in-class technology to enable transparency into Big Data, actionable insights and new ways of working that drive lasting performance, improvement, and a sustainable 2-7% increase in return on sales (ROS). With a truly global reach, the portfolio of solutions comprises of: Insight Solutions, Marketing Solutions, Customer Experience Solutions, Category Solutions, Pricing Solutions, Performance Solutions and Sales Solutions. These are complemented by ongoing client service and custom capability building programs.
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