Podcast Audio Transcript
Alisha: Hello listeners, this is Alisha; thank you for tuning in to yet another exciting and informative podcast from us at Infosys BPM. Today, we are discussing how digital technologies were adopted in retail and CPG domain, fuelled by the global pandemic. And to talk about this, we have here with us, Sreekant Natarajan, who is the AVP for CPG, Retail, Logistics and Manufacturing here at Infosys BPM. Welcome Sreekant. How are you?
Sreekant: Thank you, Alisha. It’s a pleasure to be here.
Alisha: Before we talk about the impact of COVID-19 on retail and CPG, let me ask you, how has the year 2020 been for you?
Sreekant: Alisha, 2020 was a difficult year for everyone. It was riddled with major challenges and some very exceptional paradigm-changing experiences.
Firstly, we all started to increasingly appreciate the things we took for granted earlier – primarily friendships and relationships. We realised that social interactions are extremely important for a person’s mental well-being.
On the other hand, another important aspect is collaboration. The way we embraced virtual collaboration is phenomenal. I personally believe we leapfrogged a generation in terms of adoption of virtual collaboration technologies.
Hence, even though it was a tough year, it brought a lot of new insights, learning, and experiences, which I think will have a lasting influence.
Alisha: That was exactly what I thought too. We did indeed leap forward by a generation in terms of virtual collaboration. So, here is a question for you: The pandemic has completely changed our lives. What effects have you seen specifically in the CPG & retail space?
Sreekant: This pandemic has fundamentally changed the way we buy and consume products, as well as interact with brands. This colossal change will require consumer goods and retail companies to revisit the way they connect with their consumers and identify evolving patterns of demand. Demand analysis and planning has to change to cater to the New Normal.
Supply chain took the hardest hit. In the medium-to-long term, companies will need to improve from a just-in-time supply chain to cater to what-if scenarios also. This may require companies to re-examine the dependencies in some countries they operate in and the suppliers they work with. Companies will need to identify alternatives and capitalize on them in order to build future resilience and maintain business continuity.
Alisha: Yes, I agree. It was quite an impact on the supply chain. How long do you estimate this effect will last, or has the recovery process already achieved some pace?
Sreekant: IMF predicts that the global economic output will grow by 5.5% after a fall of 3.5% in 2020, which is still about 5% below the pre-pandemic projections. The recovery process has now started to gradually pick up steam.
Alisha: That’s good news. These days, we have to mandatorily wear masks in all retail stores. And also, the number of people allowed in every store is limited. In this New Normal scenario, what digital interventions could help us in retail?
Sreekant: Yes, it’s quite an unprecedented time we are going through!
Retail and distribution industries are reinventing themselves. One of the key changes brought by the pandemic is that consumers are increasingly
E-commerce became the primary purchasing channel for many consumers during lockdown. Since the beginning of March, search interest in online shopping-related keywords has doubled worldwide.
While e-commerce has experienced accelerated adoption, retail isn’t the only area that embraced a focus on digitalization during the lockdown.
We are seeing this trend becoming increasingly prevalent, as consumers are turning to online channels for unconventional needs, such as virtual try-on, online classes, tea delivery, virtual pub quiz, customer service live chat, and even virtual gyms. All of these have seen increased search interest globally.
While retailers were already experimenting with hybrid, offline-to-online models before the pandemic struck, the New Normal is expected to result in accelerated transition. Companies will now boost their investments in omni-channel models and redesign the future of retail experience.
Alisha: That’s true! Digitalization has seeped into every aspect of our lives. Considering the losses that retail and CPG companies have suffered during this pandemic, do you expect that companies will increase digital investments this year?
Sreekant: Well, companies will have to design products and services to suit the current times, while pricing them right, to stay relevant and competitive. At the same time, they will have to cut down on costs to be able to adjust to the New Normal. Of course, it is a tight-rope to walk on. Organizations across different sectors are looking at conserving cash at least in the short-to-medium term.
As World Bank Group President David Malpass notes “Making the right investments now is vital both to support the recovery when it is urgently needed and foster resilience. Our response to the pandemic crisis today will shape our common future for years to come”.
We can see a boost in investment across digital technologies aimed at mitigating the impact of this crisis.
Alisha: Sounds like digital transformation is here to stay! Business process optimization is the primary step before implementation of RPA or AI. What are your recommendations for standardizing and simplifying retail and CPG business processes?
Sreekant: Several companies, over time, have built complex business operations. Now is the time to untangle this intricacy and implement simplified operations. Companies need to cut down on complex operational structures by integrating functions that have been performing in silos. For example, finance as a function must work in tandem with supply chain.
However, with RPA and AI tools becoming mainstream, a lot of companies are jumping in to implement them before achieving readiness to drive them.
It’s more effective if organisations perform an in-depth analysis of their business processes, examining them end to end, and then drive improvements by process re-engineering wherever possible; automation should be done post that. In essence, process standardisation is a key predecessor to automation.
Companies need to simplify their key data, such as spend data in procurement or order data in supply chain, in order to improve visibility into their operations. Digital transformation is vital in the finance function to follow the flow of money.
Alisha: Yes. As they say, automating waste increases waste. Agility and responsiveness are key to achieving success in the new normal. Could you give an idea on the master data strategy companies should adopt?
Sreekant: As companies seek to redesign their products and services to cater to the New Normal, master data is vital for them to be agile and to launch products and services quickly to the market. Traditionally, the master data flow in most companies is very complex, due to legacy systems, acquisitions, and other reasons.
As we pointed out earlier about optimising and simplifying business operations and processes, companies also need to re-look at the master data flow from R&D, manufacturing, and product information management (PIM) perspectives. PIM maintenance is important for efficiently managing online channels as well. This will ensure that your online products are found easily, and searches don’t return too many products or wrong products.
Alisha: Quite true. I hate it when I get irrelevant results when I search for something online. In order for these companies to accelerate the adoption of digital transformation, what are your recommendations?
Sreekant: So, to summarise, companies need to ensure the following:
Alisha: Those are some rock-solid recommendations for growth, Sreekant. I’m sure our listeners will appreciate the information you have given today. I would like to thank you so much for joining us and providing your wisdom in this topic.
- Business process standardisation and optimisation
Many companies, over time, have developed complex business operations. This is the time to simplify these intricate processes. By integrating siloed functions, they can cut down on complex operational structures.
- Develop analytics
Analytics is needed to draw insights from across the supply chain. From demand and supply planning to readjusting the supply chain, insights is key.
- User experience at the core
As companies ramp up their omni-channel online presence, it is key to put the user experience at the centre of transformation.
- Have an agile and responsive digital strategy
Digital transformation is an ongoing process. Considering how fast both consumer behaviours and needs are changing along with technology, you need to consistently and frequently revaluate your digital transformation initiatives. This will help companies react faster to changing consumer behaviour.
Sreekant: It was indeed a pleasure. Thank you, Alisha.
Alisha: Dear listeners, if you enjoyed our podcast today, please don’t forget to share and like it on social media. Our social handles are mentioned in the podcast page. The podcast will be available on various platforms like Google Podcasts and Spotify, in addition to our website.
Also, if you have any queries, do reach out to us through the email address on the podcast description. Watch this space for more exciting podcasts coming up. Once again, thank you for tuning in, stay healthy and socially distanced. Have a nice day!