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Customer-Centric leading to Digital Transformation in CPG

Updated: Jan 22, 2023

That is what Digital Transformation is driving in the Consumer Packaged Goods industry.

Every industry has adapted to technology and automation in today's digitalized society. Technological advancement is now a driving force for almost all companies and industries, opening up unimaginable possibilities for change.

Integrating digital technology across a company's business functions leads to the transformation of its operations and provides its customers with more value.

Everything can be measured and accomplished with the help of technology. Content is abundant and requires emotional engagement from the customer. Business and brand success depends on building this connection with the customer.

Digital transformation initiatives in Consumer Goods (CG) organizations have a direct impact on customer engagement and customer experience.

For these reasons, CG organizations are in the midst of a major transformation.

The Need for a Digital Transformation in CPG Companies.

The internet isn't used just by millennials to perform research and shop on the web. Senior citizens began purchasing products online following the COVID-19 pandemic.

When buying products, the importance of the user experience has surpassed the importance of the price. Consumers of all ages desire a seamless digital experience on different channels. Customer experience must be at the centre of the digital revolution in consumer packaged goods. We put our customers at the centre of everything we do, whether improving their experience or delivering better service.

With a digital transformation, companies are embracing mobile-first strategies, augmented reality or artificial intelligence, cloud computing, software, IoT devices, and APIs to connect everything.

Providing customers with a tailored and personalized experience requires a digital transformation. Increasing numbers of digital devices in the home mean that consumers will increasingly rely on technology to conduct transactions. Alternatively, they can use Alexa, Google Home, or Apple HomePod to place an order, add an item to the grocery store's app shopping list, or set a smartphone location reminder so they can pick up the item the next time they're in the store. CPG firms must follow the consumer trend by going digital as well.

The CPG organizations that prioritize "going digital" will have fully integrated business systems, a data governance strategy, cognitive technologies that automate activities and analytics that allow them to gain insight into the value chain.

In the long run, digital technology expenditures will produce the promised benefits.

Laying the foundation for transformation.

Companies in the consumer goods industry need to implement next-generation transformations based on these foundations to thrive post-COVID-19.


To transform, a statement of the company's purpose and portfolio must be formulated. Instead of relying exclusively on traditional strategies, purpose and sustainability are now critical additions, providing a compass for such journeys, and allowing appropriate decisions and trade-offs along the way.


Customer-centricity must be adopted right from the beginning, so businesses can redirect efforts away from short-term success and focus on growth as the leading factor for long-term value creation. The company can also initiate growth-oriented activities that have traditionally been considered separate from standard cost-cutting measures.


The operations model of the company must be realigned to better reflect long-term transformational goals. To adapt to the upcoming transitions, companies need to reallocate their resources and rethink operating models to be more agile flatter, and faster. This process involves adopting agile and cross-functional approaches that are faster and more efficient, with fewer touchpoints and increased manager empowerment.


It is crucial to plan the phased implementation of the various functional building blocks and determine key interdependencies across functions and geographies as a means to ensure progress. In the continuous evolution of consumer preferences and expectations, the intersection of functions, and their ability to adapt synchronically to emerging trends, holds a lot of value.

The Influence of Technology on Digital Transformation.

Digital transformations are characterized by rethinking business models and rejecting existing ones. This has been happening in the CPG business lately. In the wake of the COVID-19 epidemic, the integrated supply chain underwent even further change, as traditional operations weren't sufficient to meet customer demand. The result is that advanced analytics and machine learning are becoming a necessity for the CPG industry.

Various technologies can be used in digital transformations to meet the needs of a variety of customers. Cloud Computing, the Internet of Things (IoT), Artificial Intelligence/Machine Learning, Mobility, Analytics, and Social Media dominate the digital transformation landscape.

This article explores how the CPG industry is embracing these technology trends for its digital transformation.

Analyzing Data from a Variety of Sources

According to consumer goods companies, data integration from multiple sources is their biggest challenge as per reports. Their success rates can be drastically impacted by this because mature business decisions require a wide variety of insights that can only be gathered from multiple systems, sources, and external business partners.

Businesses can now access a wide variety of data sources, compile them, and provide actionable insights based on these data with the help of AI and advanced analytics. By combining artificial intelligence and advanced analytics, companies can now observe patterns for demand forecasting, Trade Promotion Management, sales activation, dynamic pricing and promotions, precision marketing, targeted consumer engagement, and AI-powered diagnostics and recommendation services.

Leveraging AI/ ML

Digital transformations have been proven to be cost-effective when implemented by organizations that invest considerably in new and emerging technologies. Artificial Intelligence and Machine Learning can transform current business structures and processes into futuristic enterprises as a result. CPG companies may benefit from AI and machine learning in the following ways-

  • In real-time, machine learning can process tens of thousands of data points without involving humans. During an online purchase, AI/ML will only show consumer offers that are relevant to their current search, giving them a more personalized experience.

  • A machine learning system can examine large amounts of data significantly more efficiently and quickly than manual analysis. This helps streamline digital processes and allows you to make informed decisions because it can find numerous relationships in your data sets.

  • The CPG industry can benefit from incorporating cloud-based technologies and baseline projections into its business models. As a result of these cloud solutions, CPG companies can create meaningful experiences for customers and assist in the development of their businesses, such as AI-powered smart factories and supply chains, as well as personalized data-driven marketing.

Role of IoT

Although the CPG industry has yet to catch up to other industries that have been implementing IoT for years, it is not far behind. Retailers have traditionally provided CPG companies with insights into customer behaviour and audits. The move to the Internet of Things has created new possibilities for direct, quick connections between companies and their clients. By using IoT, insights can therefore be measured in a variety of ways, such as:

  • The most popular and best-selling goods among customers are determined by analyzing data from smart sensors.

  • Identifying the retailer that sells the most to its customers compared to other retailers.

  • To advertise products in the best locations, sensors evaluate client behaviour patterns.

  • Making apps that allow consumers to directly buy things, get discounts, and take advantage of promotions, bypasses the middleman.

The omnichannel ecosystem

Constant changes are taking place in consumer expectations and behaviour. During Covid, the winners were direct-to-consumer (DTC) and digitally-native businesses, since they prevented their customers from switching. Consumer packaged goods companies must act like direct-to-consumer brands and engage with and establish relationships with their customers online to drive continuous loyalty. It is accomplished through developing e-commerce and B2B offerings and world-class experiences for direct-to-consumer and business-to-business markets.

The focus is on the eCommerce channel. The consumer packaged goods industry quickly realized that this channel is different from the traditional grocery store aisles. To accomplish this, a unified approach must be taken to demand sensing, shaping, and fulfilment that is compliant with an algorithmically operating flywheel. Commercial teams in CPG companies need to upskill more than ever before thanks to e-commerce.

For the CPG industry to maintain competitiveness and to adapt to changing occurrences like the COVID-19 outbreak, scaling operations is crucial.

Scaling your Consumer Goods company requires considering factors such as skills shortages, data governance, validity, and market specialization. Advanced analytics and machine learning also take into account these scaling factors and future predictors

Let's Wrap up

Digital transformation is the key to competing and surviving in today's rapidly changing world. It is good that the CPG industry is being forced to abandon old business practices to adapt to the new market reality through digital transformation. Technology allows the CPG industry to become digital, whether it's by building IoT solutions, integrating smartphone technology, incorporating AI/machine learning into your day-to-day operations, using Big Data techniques, or incorporating cloud computing into your present infrastructure.

Since GPG companies are also manufacturing their products to reach end customers, the smart factory initiative is now accelerated. To read more about how digital transformation impacts manufacturers click this link.

We drive digital transformation across industries, and we have extensive expertise in disruptive technologies such as artificial intelligence, automation, the Internet of Things, robotic process automation, and machine learning. Get in touch with us so we can help you define your strategy and ensure a smooth transition.

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