In one of the most visible outcomes of the COVID-19 pandemic and following recession, more than 8,000 brick-and-mortar stores have closed this year. However, online sales have skyrocketed, growing four times the growth rate of offline sales in the first quarter of 2020. As home-bound customers shop for more essential items online, many retailers are stocking up their online marketplaces. This positions retailers as one-stop shops and helps them acquire more customers. Leading consumer packaged goods (CPG) companies have reported more than 30% revenue growth in their e-commerce sales by increasing investments in direct-to-customer operating models and by leveraging digital technologies to monitor customer preferences. As a result, e-commerce sales now account for more than 10% of their overall revenue. Additionally, with curbside pick-up and “buy online pick-up in store” (BOPIS) gaining traction, we expect more growth in online sales.
These are key findings of Avasant’s new Retail & CPG Digital Services 2020-2021 RadarViewTM report, which covers emerging trends in the retail and CPG industry. The report is a comprehensive study of digital services in the industry, including top trends, analysis, recommendations, and a close look at the leaders, innovators, disruptors, and challengers in this market.
Avasant evaluated 37 providers using three dimensions: practice maturity, partner ecosystem, and investments and innovation. Of those 37 providers, 22 are recognized as having brought the most value to the market during the past 12 months.
The report recognizes service providers in four categories:
- Leaders: Accenture, Cognizant, HCL, IBM, Infosys, TCS
- Innovators: Capgemini, NTT Data, Tech Mahindra, UST Global, Wipro
- Disruptors: Atos, CGI, DXC, Genpact, LTI
- Challengers: Mindtree, Softtek, Sutherland, Unisys
Figure 1 from the full report illustrates these categories:
“Retailers are facing challenging times this year, to say the least,” said Avasant’s Research Leader Pooja Chopra. “As they try to navigate these choppy seas, it is crucial for them to find the right strategic balance between business growth and cost containment. They need to fully understand how technologies like artificial intelligence and advanced analytics can help. That’s why they need to bring service providers on board.”
Some of the key findings from the full report include:
- Evaluate which business models and revenue streams can drive business growth:
- Elevate the mindshare of private label brands by promoting their availability. Price-conscious consumers are willing to replace any of their usual brands if they have limited availability.
- Launch lucrative subscription-box models and interactive apps to swiftly transition to online shopping and boost e-commerce sales.
- Accelerate the digitalization of supply chains to expedite delivery and contain costs:
- Invest in digital technologies (drones, autonomous vehicles) or hire employees to expedite last-mile delivery of e-commerce sales.
- Leverage robots, drones, IoT, artificial intelligence (AI), and analytics to optimize inventory levels, expedite order fulfilment, and contain costs by reducing the dependency on workers.
- Modify your go-to-market strategy to improve brand visibility and acquire new customers:
- Repurpose savings from store closures and redesign existing stores. Prioritize investment in point of sale, curb-side pick-up, and facilitation of social distancing to boost in-store traffic.
- Make product packaging more compact to ease online delivery. Use recyclable materials for the targeting of millennials and other groups.
- Expand e-commerce capabilities to increase customer outreach:
- Promote subscription models to increase the sale of essential items and health-related products.
- Digitally connect with luxury-brand consumers by sending personalized notifications or alerts, developing customized products at minimal cost, and providing free consultation services.
The report also features detailed RadarView profiles of the 20 service providers, along with their solutions, offerings, and experience in assisting enterprises in digital transformation.
This Research Byte is a brief overview of the Retail & CPG Digital Services 2020-2021 RadarViewTM report. The full report is available at no charge for Avasant Research subscribers, or it may be purchased by non-subscribers directly from our website (click for pricing).