The Pillars of Successful Digital Transformation for CG Companies

The Pillars of Successful Digital Transformation for CG Companies

Digital Product Passport ·

Digital transformation is a hot topic amongst Consumer Goods (CG) companies. It promises to reshape the operational landscape and drive success by enhancing efficacy, efficiency, and transparency. That is vital in navigating customer needs, market trends, and regulations.  In 2021, companies increased their spending on digital transformation by 20% compared to 2020. 

Key to digital transformation is deploying personalized strategies and versatile digital tools across value creation phases. Consumer goods brands benefit from data-driven trend forecasting, personalized digital experiences, real-time supply chain tracking, and AI-powered workforce optimization, enhancing business performance.

Such tools streamline work processes, reduce errors, and enhance production efficiency. But this change is not without its challenges. For instance, companies face failure to scale initiatives and a lack of employee engagement. CG companies often struggle because of disorganized product data and the lack of a cohesive data management strategy.

These companies can enhance their digital transformation efforts by investing in digital technologies and integrating suitable systems for growth. Digital transformation offers significant advantages, such as improved customer satisfaction through automation, data-driven decision-making, and enhanced user experiences.

This article will discuss what digital transformation is, common challenges and ways to overcome them, four pillars you should keep in mind when undergoing this transformation, and how Layerise can help you get there. 

What is digital transformation? 

Digital transformation is integrating technology into your day-to-day business operations to improve outcomes. It includes reshaping business processes, culture, and customer experiences to align with market changes and technological advancements. This transformation focuses on enabling agility, responding to customer demands, fostering innovation, and preparing for future technologies. 

You need a clear vision, market understanding, value identification, and a well-defined roadmap, with leadership alignment and cultural shift, to transform your operations successfully. 

The digital transformation market is experiencing rapid growth. Emphasis is on technology integration, operational changes, and value delivery. The acceleration of the transformation efforts is evident in the post-COVID era. Businesses are focusing on customer support, expansion, automation, system optimization, and enhancing customer experience. 

Why are CG companies behind in digital transformation?

Consumer Goods (CG) companies are eager to evolve but face stumbling blocks in their digital transformation journey. They often lag in digital transformation due to a combination of factors. These include: 

  • Insufficient internal expertise

  • Lack of funds

  • Internal resistance due to the daunting prospect of organizational change

  • Unfamiliarity with emerging technologies

  • Difficulty in identifying the optimal pathway to transformation

  • Challenges of navigating a multifaceted process that doesn't offer a universal solution

  • Trying to adopt the same processes as others. Every business is unique, and hence one size does not fit all

  • Lack of a tailored digital strategy. 

How can CG companies accelerate digital transformation?

CG companies can expedite their digital transformation by embracing IT digital transformation strategies and collaborating with specialized digital transformation companies. They can also adopt innovative tools to enhance efficiency, customer experiences, and innovation. 

Let us look at three ways CG companies can undergo successful digital transformations: 

1. Understand that digital transformation is more than just technological change

IT digital transformation in CG companies is a holistic reshaping of its operations. You must use technology only as a catalyst. First, understand your business objectives and develop clear goals. Also, determine your current capabilities and evaluate the skills required for this task. Then create an adaptable strategy that considers current technological trends and market dynamics. 

You can begin by integrating cutting-edge tools and methodologies like cloud computing, AI, and automation. Next, foster a culture that embraces technological advancement. Involve everyone from C-suits to interns. The result will be a more responsive and agile organization capable of meeting the modern consumer's demands. Remember, ongoing evaluation and adjustment are critical for a successful digital transformation strategy.

2. Collaborate with digital transformation companies or consultants 

Be open to outside help because the complexities of digital transformation may require expertise that your CG company may not have in-house. Digital transformation companies offer tailored solutions, technological insights, and hands-on experience navigating the transformation journey. 

CG companies can leverage their expertise to overcome challenges, mitigate risks, and optimize digital strategies. These collaborations can also provide a roadmap, set realistic goals, and ensure alignment with the company's unique needs and aspirations. The synergies created through these partnerships enable CG companies to maximize their digital potential. That can lead to increased efficiency, innovation, and a competitive edge in the market.

3. Ensure cultural alignment and leadership support 

Digital transformation requires a significant investment in technology and talent. Ensure you have the support of your leaders and bring in people that can successfully implement your transformation strategy. Meanwhile, focus on the smooth running of essential business elements like R&D, data management, and customer satisfaction to minimize any negative impact on your revenue and customers during this change.


The four pillars of digital transformation 

Digital transformation can be divided into four steps: digital marketing, employing new technologies, digitizing business processes, and designing new business models. You may not need to redo all four aspects of your business. The appropriate choice among these factors depends on the context, needs, and digital maturity of the CG company. 

Success involves understanding the four essential pillars, selecting the right ones depending on the organization's context, and aligning leadership, resources, and KPIs. Misunderstanding these can lead to the failure of the digital transformation project.

1. Digital marketing

Digital marketing is innovatively using digital channels and technologies to engage customers and market products or services. It requires reimagining customer engagement and utilizing digital tools to maximize the value of your marketing efforts. That can help your competitive positioning in the market. This step can be part of a strategic ecosystem for impactful workforce alignment. It can ensure that your CG company's marketing strategies are optimized for the digital age.

2. Employing new technologies

CG companies should view digitalization as a business model innovation, not just technological change. As such, they must explore and choose new technologies wisely. The business must ensure proper alignment and prioritization of technology within the broader business strategy. That is vital to avoid excessive resource dedication to technology and ensure a balanced approach that supports the overall transformation journey.

3. Digitizing business processes

Redesign your CG business standards of operations by keeping technology at the forefront. Understanding customer needs and reimagining products is essential to a holistic transformation strategy. The focus should shift from primary goals, like cost optimization, to reimagining customer needs, products, and the overall purpose of the enterprise. That can help CG companies align with creating more personalized and meaningful interactions with customers.

4. Designing new business models

In the context of digital transformation, becoming data-driven is paramount. This doesn't only involve data accumulation but also means taking critical decisions and actions with data-driven insights rather than human intuition. This approach prompts organizations to rethink their strategies. It can have a transformational impact, but many companies fail to digitally transform because of underestimating this step.

The importance of digital marketing and customer acquisition 

In today's dynamic business landscape, CG companies must transition from traditional marketing methods to innovative digital techniques. Effective marketing and robust customer acquisition strategies are critical. Embracing digital means and channels allows CG companies to engage with global audiences. It fosters brand loyalty and drives sales. Now, let us explore both these topics in depth: 

Digital Marketing 

Traditional advertising, which once focused on print and broadcast mediums, has evolved to encompass diverse strategies. This includes email outreach, PPC advertising, social media engagement, digital billboard ads, influencer marketing, and video marketing on platforms like YouTube and TikTok. 

An illustrative example is McDonald's use of digital ads to reach late-night customers through their app. Digital marketing doesn't just parallel traditional methods but is an advanced, interactive mechanism that targets specific customer segments, achieving greater efficiency and reach.

Improve customer acquisition with better customer insights

Collecting customer data transcends the boundaries of mere information gathering; it's a tool for refining business strategy. It is about tapping into customer preferences, tailoring offerings, and delivering experiences that resonate. By using digital strategies, you can leverage customer data to understand behaviors and create more personalized interactions. 

For instance, website heatmaps can provide insights into how consumers navigate a platform. Similarly, Key Performance Indicators (KPIs) can measure the efficacy of digital strategies and monitor metrics such as click-through rates, conversion rates, and social media engagement. These data-driven insights empower CG companies to deliver offerings that align closely with consumer expectations and needs. 

Furthermore, harnessing such data responsibly ensures companies remain attuned to their audience. That can forge deeper connections and strengthen brand loyalty.

Element - data

How to collect customer insights with Layerise 

The Layerise platform is designed to help CG companies effortlessly gather first-party data. Here are some ways you can do that: 

  1. Website and app tracking

  2. Incentive systems; Offer incentives (a discount) in exchange for information (email or phone number) 

  3. Onboarding process

  4. Surveys and feedback

  5. Social media listening

With built-in systems that are easy to deploy, Layerise is the perfect tool to gather customer data, improve digital marketing efforts, and transform your business. 

Legacy systems and processes hamper innovation and flexibility, while internal resistance to change blocks progress. The path to digital transformation is indeed fraught with challenges. CG companies must recognize the right path, seek professional guidance, and leverage internal and external collaboration to ensure a successful transformation.