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Richard Webster: Deconstructing the Digital Agenda in Consumer Products

The digital agenda for most consumer goods companies has expanded rapidly in recent years. Digital winners adhere to a few key themes.


Richard Webster: Deconstructing the Digital Agenda in Consumer Products

The digital agenda for consumer goods companies has expanded rapidly in recent years, evolving from experimental digital marketing to digital initiatives that span functions across the business. Richard Webster, a partner in Bain's Consumer Products practice, discusses a few key themes that digital winners follow.

Read the Bain Brief: Deconstructing the Digital Agenda in Consumer Products

Read the transcript below.

RICHARD WEBSTER: Growth is a huge issue within consumer goods. How do I grow my business? And many people are turning to digital. What role does digital play in driving my business? And the digital agenda has changed hugely over the last five years.

Five years ago, it was all about digital marketing. What do we do with these new media channels? What do we do on Facebook or YouTube? How do we actually build a business in this space? And in some companies and categories, it was about, what do we do on Amazon? But the agenda has expanded significantly since.

Yes, it's still about digital marketing. E-commerce has got a lot broader. It's become more important, and people no longer are talking about just what do we do with Amazon, but questions like, do I need my own direct consumer business? How do I compete against small insurgent brands?

Other areas have been added: digital operations. How can I rework my process flows, whether they're frontline or back office, to radically simplify my business? And the neighbors have changed as well. It used to just be about, how do I find talented individuals to work in this space? Now, it's still about talent, but also the operating model they fit in. It's also about how I use data and how I use analytics on that data to support all of the other areas of the digital agenda.

Now, the other thing we've seen over these last few years is that the people who were leading a few years ago have pulled ahead. In fact, the importance of leadership in digital I think is even more so than in the physical world. And that's because scale delivers on a number of things.

One is there's a first mover advantage in e-commerce. Many of the algorithms actually look at historic sales as a key determinant of which products they show. So if you were on first and doing well first, you will actually continue to turn up well in the search engines.

The other thing is baskets. When people buy products and they add them to their baskets for the first time, they often will go back to their shopping baskets online to buy more. So again, a first mover advantage.

The second area which is important is scale in digital marketing. The more you do, the more you learn, the better able you are to target consumers, the more you learn about a better area where you ought to target them in the future. So scale in digital marketing, your focus there matters much.

And the last one is talent. It's still very difficult to get good-quality talent in this space. And if you're a first mover and seen as leading the industry, it is much easier for you to attract high-quality talent to your business.

Now, the other thing we see as we look at companies is there's no one company who's doing everything right. There is no silver bullet in this space. There are a few key themes, which we think are good to follow.

The first is return of strategy. Digital has, at its heart, for a long time been all about experimentation, which is still true. But equally, there needs to be strategy. We need to make sure that we're making choices about what we do and what we don't do, and we're funding properly the things that we do do.

We also need to be much more thoughtful about the role of IT. IT has been very used to running with great-uptime ERP systems and now needs to experiment and work in a very different, more agile way. And that's a change the organizations need to make.

The third point is about simplicity. There is a real risk that people are just adding digital on top. They're taking existing, often cumbersome, processes and just putting a digital front end on. And digital creates much more of an opportunity to reset the process, to look at how can we radically simplify the business along the lines of digital and reinvent how we work, not just by adding on a new front end.

Companies that take advantage of these things are going to be the ones which win in digital.

Read the Bain Brief: Deconstructing the Digital Agenda in Consumer Products


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