Coca-Cola

• To become more agile, Coca-Cola underwent various changes that included how the company worked internally.
•  James Quincey CEO of the company said that “We must be much more agile, get things to market quicker, test and learn; if they don’t work, move on. If they do, take them to the next stage.”
• To achieve the vision of the CEO, the company had to adopt the mode of operation of tech companies. This involved changing the long time the company took to invent new products in order to achieve perfection. The company, therefore, decided to adopt the test and learn method.
• Additionally, the company is adopting a new “make it happen” motto. The motto empowers employees to take smart risks and accept the outcome of the risk even if it was not successful. The company has gone a step further by awarding innovative failures through Coca-Cola’s Global Innovation Awards.
• Another thing that Coca-Cola changed in order to be more agile was its organizational structure. The company flattened its organization. It did this to enhance faster and more effective decision-making.
• Coco-Cola is also training its associates in agile practices and forming agile teams that can handle strategic priorities. Leaders in various positions in the organization are implementing agile principles.

• Coca-Cola opted to adopt "agile" because it needed to match the speed by which consumers taste change. It also did this to keep up with new buying habits that are evolving at a fast rate.
• The company also adopted "agile" to remain relevant to a diverse and rapidly moving marketplace. Adopting Agile was a step in ensuring that the internal organization becomes more curious, empowered, and innovative.

• One area that "agile" affected the company was the product launch. The company was able to launch new beverages to the market at a more rapid pace.  
• Initially, Coca-Cola could take up to 52 weeks to launch a product. The launch also had very high stakes dependent on its success.
• However, adopting "agile" has reduced the product launch period by half. The company can now launch a product in just 22 weeks. An example was the launch of Coca-Coal Zero that was launched in 22 weeks.

• The change in structure also promoted creativity and innovation. It fostered an entrepreneurial culture in a company that allowed employees to learn and adjust quickly.

Unilever

• Unilever, in order to become agile, started by collapsing its organization matrix. The goal was to move decision-making down the chain of command, thus creating a less-cluttered organization environment.
• Unilever, therefore, decided to decentralize its operations. It did this by creating three global divisions, which are beauty and personal care, home, and food and refreshments.
• It empowered each division with the power to make decisions without needing approval from other executives.
• The divisions were also tasked with developing innovation, which includes strategy, research, product development and advertising.
• The company also created cross-functional teams dubbed “country category business teams” (CCBTs).
• CCBTs need only to report directly to one of the company’s global divisions. The teams were also given the freedom to spend a percentage of the company’s innovative budget on local initiatives without having to ask for approval from executive officers.

• Unilever created the three divisions in order to be more agile and increase competitiveness in their markets.
• The reason was to make the Unilever a more consumer-facing company that had the ability to roll out global innovations faster. Additionally, it wanted to become more agile in responding to local trends.
• According to Unilever CIO Jane Moran, the company used "agile" to balance growth, innovation, disruption, and legacy in the company.
• The CIO also acknowledges that the consumer packaged goods industry is ever-changing and has a lot of disruptions.

• Through the creation of CCBTs, Unilever was able to eliminate the duplication of roles between global division and regional divisions. It was, therefore, able to save money by creating an agile process through CCBTs.
• The company was also able to successfully devolve power and reduce regional clusters that were increasing its operational costs.

Behavior-Centric Designs

•  Openness to change helps an organization to respond to changes in technology, changes in economic conditions, competition, and other external market forces. To boost the company's performance, organizational review and being open to the possibility of redesigning can be considered.
• Being goal-driven is essential in identifying the organization's performance shortfalls. Identifying the gap between the current performance of the company and the target performance can lead to strategic plans on how to reach the company goals.
•  Analytical thinking is required to understand behaviors and why they are rational. When the company struggles with strategy execution, it is helpful to identify the gaps to be able to implement solutions and adjustments when and where they are needed.
•  Cooperation within the organization makes the team performance excel and makes any process easier. Organizational performance is determined by workforce behavior — how people act, interact, and make decisions.

Organizational Agility

• Responsiveness is an essential factor to implement organizational agility. It is essential for facilitating changes in a company's governance and leadership practices promptly. To be responsive to market changes, real-time development and employee coaching are also important to keep pace with the changing business demands.
•  Efficiency and quality make an organization competent. In embracing agile principles, new patterns or culture might need to be undertaken. But these changes must be approached with accuracy to successfully implement the right transformation.
• With a lot of innovation and transformation happening across industries, organizations are facing external pressures as well. Problem-solving and decision-making become important for instances when new business challenges arise. There are cases when immediate action and solution is required to be able to respond to business disruptions and gain competitive advantage.

Omni-channel Capabilities

• Companies are required to have the right infrastructure in place in order to store and sort through large amounts of data. Collecting customer data from a variety of platforms is critical but if this data is not stored efficiently it will inhibit the company's ability to provide an excellent omni-channel service.
•  Inventory management and excellent organizational skills are essential if a company wants to deliver an effective and consistent omni-channel customer experience. If a customer wishes to purchase an item viewed on Facebook but chooses to shop on Amazon and also view the item in-store, the company must have the capability to update their inventory across all platforms in real-time.
• Hiring dedicated staff to professionally and expertly manage a company's social media accounts is critical to omni-channel retail success. The strong management of social media platforms enables customers to interact directly with a company and allows the company to resolve issues promptly and with minimal effort.
•  Research shows that consistency across every sector within a company is more likely to promote a positive view of that company among its customers, particularly when the company is adopting an omni-channel retail strategy. This requires a company to have excellent communication skills within teams and consistent, clear guidance from management.
• Being able to work as a supportive and professional team is critical when implementing an omni-channel retail strategy. Having a clear brand voice guide can help staff to be unified in their approach.

Pop-in Partnerships

• Excellent communication skills are critical for both the host store and the pop-in brand. Communicating clearly and professionally about expectations, costs, design and marketing will enable the pop-in store to be a success for both parties.
•  Creative thinking and problem solving is an important skill for those wishing to host and those looking to run pop-in stores. Customers are seeking a new experience from their in-store visit so a well-designed and thought out pop-in store that creates a buzz around a smaller brand will draw attention and promote positively for both the host store and the pop-in brand.
•  Understanding a company's customer base and its market is important when seeking either a host store or a pop-in brand. The partnership between the host store and pop-in brand must make sense to the customers of both companies in order for it to be successful.
• Superb customer service ensures that customers stay loyal to the brand whether it is customer service on the part of the host store or that of the pop-in brand. Customers seek unique experiences from pop-in stores that they cannot find elsewhere and staff members who are willing to go above and beyond to enhance their experience will leave a positive impact on the customer.

Research Strategy

•  Smarter personalized shopping experiences 
•  Reduced costs, better deals 
•  Improved communication through consumers’ preferred channels 

• As a result, average revenue growth at the top 30 global consumer goods companies fell to just 0.4 per cent annually in 2013-18, from 4.5 per cent for 2007-2012, according to Bain & Company. Average growth in annual operating profits has halved over the same period. 
• In the US, large consumer goods companies have lost 2.4 percentage points of market share to smaller companies and private label products since 2013, according to Boston Consulting Group. Meanwhile, Unilever recently admitted it was losing share across about half of its business, with steeper losses seen in packaged foods compared with household goods and beauty products
•  PepsiCo has started to work with 5 startups to build a set of tools knitted together in a proprietary platform (ADA) that could be used by anyone at the company to spot trends earlier and quickly test out their ideas for products, packaging and advertising messages 

Research methodology:

CPG Technology Adoption Statistics

• Only 28% of CPG companies use IoT and of the 85% of companies who track their customers’ digital activities via cookies, less than half of them utilize it.
• A study that interviewed executives at 25 large CPG companies, as well as 100 industry experts, found that by using AI analytics, CPG companies can generate more than 10% revenue growth.
• CPG brands that invest in digital and technological branding are estimated to gain $2.9 trillion in revenue within a decade.
• CPG online sales rose 35.4% in 2018, compared to a 3.4% growth in sales at supermarkets that sell CPG products, and the overall U.S. CPG market grew around 2% in 2018, reaching approximately $815 billion.

Coca-Cola

• The Coca-Cola Freestyle has mixing capabilities of a beverage portfolio, has a mobile app, and a diagnostics dashboard for business owners to monitor drink inventory levels.
• The implementation of 50,000 units has been successful for the company, with beverage servings up 8% in Freestyle outlets and calories-per-serving down by nearly 10%.

• In January 2018, Coca-Cola smart coolers, which deliver push notifications to nearby customers with special promotions, totaled around 120,000 and those numbers tripled by 2019.
• This use of proximity marketing using internet-based technology created a return rate of 7-10% on smart coolers, compared to the traditional returns of 2-3%.
•  80% of cooler openings indicate a sale; however, if the location is unsuccessful, they simply move the cooler from a low-impact store to a high impact one, and it generally creates a 12% increase in sales.

• Coca-Cola tracks where their products are represented across various forms of social media to receive insight on who is drinking their product and what prompted them to mention the brand online, which is used to target consumers and makes them 4 times more likely to click on an ad.

Procter & Gamble

• Procter & Gamble is one of the United States' top truck users, and through a digitally enhanced operational program called Control Tower, they can see all inbound, outbound, raw material, and finished product data which reduced “deadhead” movement by 15%.
• By using a standardized warehouse, GDSN, it allows the company to do commerce with partners digitally, it dropped down the average of 70% of orders between retailers and suppliers to almost zero and saves millions of dollars.

Research Strategy:

adoption

• There is no predictable rate at which CPGs are adopting RPA. However, a McKinsey study found that between zero and one-third of work activities could be displaced by 2030 due to automation adoption, with a midpoint of 15%.
•  Predictions for full-time employee displacement in the study were assumed to be correlated to the adoption of automation and linearly proportional. Therefore, McKinsey defines automation adoption rate as a function of the percentage of workers displaced, therefore introducing a slow automation adoption rate (>0%), a medium rate (15%), and a rapid rate (30%).

• Historically, not many CPG companies have adopted the use of automation in their manufacturing pipelines.

• In 2017, The Association for Packaging and Processing Technologies (PMMI) discovered that CPG companies are taking a gradual approach to integrating automation into their processes due to financial, technological, and labor challenges. In the 2017 Evolution of Automation report, the PMMI states that only 1 in 5 CPG companies at the time had fully integrated automation pipelines.

•  Expenses are a barrier to advancing automation for CPG companies. At the time of the 2017 Evolution of Automation report, 2 out of 3 companies in the study were planning on increasing capital budgets while 25% of those companies were dedicating some budget to automation.
•  Lack of connection between the information technology (IT) and operation technology (OT) departments in CPG companies continue to hinder the integration of automation. 58% of companies reported in the 2017 Evolution of Automation report describe growing IT and OT collaboration.

• In an Accenture survey, 43% of CPG executives said that the largest motivating factor in adopting automation was to cut costs and increase efficiency.
•  Accenture research indicates that 82% of CPG workers expect their work to be fundamentally changed by digital adoption. 80% have positive outlooks, and 90% are ready to be part of the shift.
•  79% of CPGs are planning on using intelligent automation for supply chain planning by 2021.

success

• CPGs early in adopting automation have a competitive edge by showing significant improvements in operational performance.
• However, the process of adopting automation requires collaborative efforts across functions. In a McKinsey article, "disjointed efforts" in adopting automation happen when executives see adoption as a cure to all manufacturing pains.

general industry

• According to an Economist Intelligence Unit report, automation maturity is highest in the U.S., particularly in the manufacturing segments.
• Cobots, which involve a human-technology interface instead of a purely robotic interface, are quickly becoming the fastest growing parts of industrial automation. However, while growth is expected, as of 2018, cobots use in packaging only had a 10% adoption.
•  McKinsey Global Institute reports that at a medium pace of automation adoption, 23% of current work activity hours in the U.S. will be automated by 2030. At a rapid adoption pace, the percentage would increase to 44%.

research strategy

Voice Commerce

• According to technology consultation company Boomi, voice commerce is expected to gain traction in the near future. Voice commerce, which lets customers select and buy goods using a digital assistant, is a new channel that is being added to traditional in-person and digital purchasing.
• Google has been quick to enter the market with its Google Assistant and Google Express technologies. Retailers such as Starbucks, Dunkin’ Donuts, and Walmart have partnered with Amazon and Google for voice commerce. Voice commerce is predicted to grow from $1.8 billion in 2017 to $40 billion by 2022 in the US.
• An article from The Conversation has reported on the voice shopping partnership between Google and Walmart and has stated that the "investment by the world’s biggest retailer and the world’s biggest search engine, suggests this technology will provide significant opportunities for retailers to integrate the data from voice assistants into their omnichannel offering."
• Arpatech states that voice commerce will evolve the customer experience with a more "personalized, hassle-free shopping experience." It will provide a frictionless search experience to customers- from browsing products, making the purchase, and communicating with the customer service team.
• Voice can also be used as a verification tool since voice biometrics is the most secure customer identification method. Other benefits include increased efficiency while navigating through the website, and a more personalized customer experience since retailers are able to make learned judgments about age, gender, location, or mood of the speaker.

Mobile Payments

• According to Inc, customers are now shifting from standing in line to swipe their credit cards to tapping their mobiles on a scanner for their payments.
• Customers are increasingly adapting to mobile payments with 25% of smartphone owners in the US using their mobile devices for payments at least once a month. Mobile payments transaction volume is expected to increase by 36.6% year over year and reach $300 billion by 2022.
• An article from Total Retail states that "retailers will have no choice but to incorporate mobile point of sale (POS) more creatively as consumer demand for it reaches its peak." Study findings show that 45% of retailers consider mobile POS to be an essential part of the omnichannel strategy.
• Retail Dive has reported that currently, more than 3 million retailers accept Apple Pay and Android Pay. It also states that retailers that are large enough to create their own mobile payment apps are winning the most customers. e.g Starbucks.
• According to Payment Journal, mobile payments would significantly change the customer experience for those who prefer the pleasure and practicality of visiting a physical retail store rather than purchase online. The rise of mobile payments will change the way the customer’s time is spent and may draw more customers back to the store.
• Mobile payments will also reduce friction in customers' in-store experience due to the lack of queues, and enable them to find more time to engage with store employees for a higher level of service.

Supply Chain Transparency

• Touted as fashion's next trend, supply chain transparency has been on the rise in Europe's retail scene in recent years. With increasingly conscious Millennial and Gen Z shoppers leading the way, retailers have been forced to create end to end visibility of their products. 66% of consumers are willing to pay more for brands that prove that they are doing more good, with a transparent and easily verifiable supply chain system.
• London's Marks & Spencer, for example, launched the first of its transparent maps in 2016, showing its users where they source for their beef and diary supplies. In 2019, this was expanded to include an online tool that showed the sources of all raw materials for M&S' fashion and home ware ranges. This transparency has been extended to include M&S' seafood and wool supply chains. H&M's subsidiary Arket shows its shoppers its entire manufacturing process.
• U. K's online beauty products vendor, Cult Beauty, has also joined the transparent supply chain bandwagon. In 2019, Cult Beauty partnered with Provenance, a tech transparency platform, to enable their shoppers see the supply chain and environmental impact of their favorite brands sold on the site. According to their founder, this was in an effort to empower their consumers to make informed choices, a notion that was important to 20,000 of its shoppers. Feelunique, another U.K. online beauty vendor, had pledged to decode over 5300 ingredients of some products sold on their platform to encourage transparency.
• While certain U.S. retailers like Macy's have begun a shift towards supply chain transparency, very few retailers have developed end to end visibility of their supply chain. U.S. retails must quicken their adaptability to this growing trend to cater to Millennial and Gen Z shoppers, who not only command 40% of all consumer shopping, but also influence 82% of household spending. As noted in this Business Insider article, failing to cater to the needs of millennial and Gen Z shoppers could have disastrous effects to business.

Packaging Waste Reduction

• Waste reduction has been a pain point for many large retailers as it has been identified as a major issue by customers. In 2018, the European Union launched a "first-ever Europe-wide strategy on plastics" in an effort to reduce single-use plastics and to ensure that all packaging is recycled and re-usable by 2030.
• Swedish packaging giant TetraPak pledged to conform with the EU's Plastics Strategy by ensuring that all components of their beverage cartons are fully recyclable. Already 75% of their beverage packaging is from paperboard.
• In 2018, an Amsterdam supermarket, Ekoplaza, was the first retailer in the world to offer a plastic free aisle with close to 700 products. This was hailed as an industry first and a benchmark for other retailers to follow suit. Other major European supermarkets like Carrefour (France), ICA (Sweden), REWE (Germany) and M&S (U.K.) began using laser tattoos to label their fresh produce in 2017.
• While a few states like California and New York have banned the use of plastic paper bags, the U.S. retail market seems to still lag behind its European counterparts, despite mounting pressure to reduce waste, whose loss in value is estimated at $18.2 billion a year. Packaging waste from retail accounts for 23% of all the waste found in U.S. land mills. Zero waste store and product designs are largely considered the solution to reducing packaging waste, but while zero waste stores have had success in Europe and in certain specialty stores in the U.S., larger retailers are yet to adopt and successfully execute this model in their businesses.

Last Mile Delivery

• The last mile refers to the final delivery step to the customer. As 75% of consumers state that delivery times heavily dictate their purchasing decisions, the fulfillment of orders has risen to become an important part of retail business. Consumers' willingness to wait for free shipping dropped from 5.5 days in 2012 to an average of 4.5 days.
• German courier Liefery has been used by most German large retailers like REWE, Zalando and HelloFresh to deliver same day delivery since 2014. Even luxury European retailers like Hermes (France) have used Belgian delivery disruptor Parcify to fulfill same day deliveries for their clients since 2017.
• While U.S., retail giants like Amazon have been trendsetters in this step, with Amazon Prime offering the standard 2-day shipping and its 2019 announcement to offer same day delivery to its Amazon Prime members, Europe has been at the forefront of innovative last mile delivery. Walmart and BestBuy also made similar announcements in the same year. More large U.S. retailers are yet to catch up.

"Experience More" Economy

• Research shows that 50% of consumers rank customer experience on the path to purchase above both quality and price when deciding to buy a product or service. Furthermore, consumers are prioritizing experiences that bring happiness and well-being above material possessions.
• This rise of the "experience more" economy in Europe has led to the diversification of the typical buying process to include new models such as "The Pop-up" where sales are driven by experience and "The Try and Buy" that comprises a mix of sales and experience, especially in the food services. In London, popular ice-cream brand Magnum has run a "Make Your Own" pop-up store since 2013 that lets consumers create their own Magnum ice-cream bar, thereby expanding the typical everyday product to a more immersive and exclusive experience.
• Further, reinforcing the "experience more" economy, according to Deloitte, a popular retail trend in the UK for 2020 will be the growth of marketplaces to offer curated experiences that no single retailer or store can offer. In Europe, shopping centers are not as big as US malls with 216 square meters of gross leasable area per 1,000 people compared to 1,274 square meters in the US. Additionally, these centers are typically more integrated into communities as a result of stricter development regulations. This has allowed European retailers to create a more diverse shopping experience in a smaller space for consumers within their work and living environments.
• This mixed-use retail strategy is beginning to grow in the US. For example, in a major town center in Michigan, Ford Motor Company leased a former retail space and transformed it into a modern workspace for more than 1,800 employees which filled the vacant space and created more consumer traffic for the restaurants and shops in the area.
• The influence of the European retail industry in the US is also seen alongside the shutdown of major department stores in US malls. Previously, over half of US shopping center space was taken up by these large retailers such as Macy's and JC Penney's compared to one third of the space in Europe, where restaurants and grocery stores occupy more anchor spots. Now, shopping centers are beginning to lease the newly empty spaces to other types of tenants such as virtual reality arenas, healthcare clinics and smaller niche boutiques. For example in the Galleria in Houston, Fig & Olive and Nobu occupy the space formerly held by Saks Fifth Avenue.

Omnichannel experiences

• An omnichannel shopping experience is one in which traditional physical shopping in brick-and-mortar stores converges with modern, digital shopping where increased access and convenience are most important. Bob Phibbs, the Retail Doctor, calls this "Phygital retail". 
• According to a recent survey by iVend Retail, European retailers offer a stronger omnichannel shopping experience than their US counterparts. Even though the average online spending per person is higher in the UK, Germany, France and Spain compared to the US, a larger amount of European customers (75%) also do the majority of their shopping in store compared to 57% of North American shoppers. These findings imply that European retailers also provide an enjoyable in-store customer experience. 
• In the UK, the success of the omnichannel retail strategy is driven by their commitment to order fulfillment, specifically through the "click-and-collect" model where consumers purchase online but pickup in-store. The iVend survey found that 79% of British consumers have used this service compared to 60% of the US market.
• In the US, major retailers are following this trend. Walmart and Target now offer "click-and-collect" at all of its stores. Sephora created a new "omniretail" department by merging its in-store and digital retail teams allowing customer profiles to include recommendations from online browsing, online purchases, in-store experiences such as makeovers and in-store purchases. Bloomingdale's opened a new beauty floor at its flagship New York store that combined high-tech features and high-touch personal service.

Transformative technology for personalized product recommendations

• From a recent Business Insider report, US retailers may look to improve personalization and thus, overall sales by identifying and tracking the consumer on their shopping journey and using that information to provide personalized offerings.
• Singapore’s NTUC FairPrice is an e-commerce grocery platform supported by a ‘hi-tech distribution center’ and online fulfillment system called AutoStore. The platform can learn from past purchases and browsing behaviors to offer more relevant product options with saved delivery and payment options.
• According to 2020 retail industry insights from Deloitte, traditional retailers are expected to implement digitally powered physical stores. Shoppers still rely on stores for product discovery which can be further supported with data and digital capabilities.
• In 2019, Kroger launched pilot stores that integrated Microsoft’s Azure and Azure AI technology to provide a more engaging shopping experience with personalized insights.

Logistics improvements and faster delivery

• While US retailers have already begun seeing a shift to faster delivery, consumers will start to expect increased convenience and improved delivery in 2020. In 2018, surveys showed that 43% of consumers expected ‘much faster’ delivers that year.
• In Asia, home delivery efficiency has improved where e-commerce platforms can now cover faster delivery. Singapore’s FairPrice system covers same day delivery which takes less than 4 hours upon order completion.
• At Alibaba’s Fresh Hippo physical stores, consumers can place orders online and collect them from the store within 30 minutes.
• In 2019, Walmart launched next-day delivery for select items on its website. The retailer further expanded their delivery program and branded it as Delivery Unlimited. This program offers free two-hour delivery of grocery products in select markets for a monthly fee.

Sustainability and environmentally-friendly packaging

• The increasingly green-minded needs of Chinese consumers has been echoed, especially in the cosmetic industry, by environmentally friendly packaging. L'Oréal partnered with Alibaba in 2018 to reduce waste in China.
• According to a study in China, 69% of consumers are willing to pay higher prices for completely natural products.
• US retailers and CPG companies may see an increased shift towards “clean” beauty and sustainability. Consumers, especially younger millennials, are leaning towards more sustainable alternatives.

In-Field Sales and Retail Execution Teams

• Large CPG companies like Kellogg's and Heinz are adjusting to the retail shift towards an "experience more economy" by hiring their own salesforces to realize the value of in-store execution while more consumers are "heading back to the center of the store".
•  In-field sales teams are educated about the products and what makes them unique, can quickly identify issues and work with store management to avoid ineffective time periods, and can build a strong rapport with store and HQ management. Successful sales strategies have to adapt to educate the sales team, and it is essential that the teams are empowered with optimal technology as that is essential to optimizing their impact.
• Technology will provide sales teams with "prescriptive retail and guided selling to retail activity optimization" that will enable them to get the highest returns, increase store visits, identify problems, and achieve greater sales at the shelf. These activities boost sales and improve last mile deliverables, another retail shift.
• Unilever also uses Salesforce to drive greater personalization and stronger connections with its retail customers and employees, such as the new solution for retail execution that aids field reps in managing accounts, placing orders, and delivering other key services while visiting sites.

Salesforce and Deep Learning Platforms

• Large CPG companies like Unilever and Coke adopt platform-based approaches to digitally transform their sales organizations and make operations more transparent from the beginning to the end of the supply chain and help handle the shifts towards e-commerce and deliveries.
• Coca-Cola describes Salesforce as being integral in the company's sales transformation journey by enabling its employees to "work smarter not harder", and cites that the time to on-board new customers has decreased by 60% and the overhead for administration overhead for service technicians by almost 50%.
• Salesforce also provided Coke with a new mobile app that allows service technicians to respond to more customer requests faster and more efficiently.  
• There was also an app created to simplify account creation and equipment installation for new customers, and it took less than a year to deploy the app across Coke's multiple territories. The pilot for this app revealed a reduction in lead time for the installation of new equipment by 50% and reduced customer on-boarding time by 66%, and provides better transparency of the supply chain from production to the end-user.
• Using the platform, Coke has already established its first customer engagement in France, and 10,000 customers have signed up and 45% of transactions occur using a mobile device demonstrating a shift towards sales and e-commerce.
• Unilever is using Salesforce to drive its sustainable living initiatives, among other adjustments, by helping the sales team to evolve along with the customers demanding sustainable practices, and employees can even track their personal sustainability efforts using the platform.

E-Commerce and Omni-Channel

• In order to handle the turn to e-commerce and omni-channel, CPG sales organizations have to find a balance between mixing sales reps with e-commerce. Companies such as Coca-Cola have adjusted to make "e-commerce an asset to sales reps". Coca-Cola's e-commerce director explains that directing low-volume customers to e-commerce gives sales reps the ability to focus on selling and overseeing the big accounts personally.
• Sales organizations adjusting to e-commerce will include a mix of sales, marketing, and technology. Large CPG companies like Unilever and Coca-Cola have sales teams that operate as e-commerce teams, adjusting to have a wide array of functions including different types of online and direct marketing. These teams typically report as sales teams especially in regard to direct-to-consumer offerings.

Active Collaborations with the Retailers

• According to The Future of Procurement, Making Collaboration Pay Off, by Oxford Economics, 65% of procurement practitioners claim that effective collaborations with suppliers at their companies result in the overall success of both parties.
• Companies are depending on suppliers nowadays to create competitive products that boost competitive advantage and differentiate them in the markets. This addresses the 'experience more' economy retail shift. Through a strategic collaboration, retailers and suppliers can produce products that ensure this experience is achieved by the consumers.
• By collating synergies through supplier collaboration, a seamless balance is reached between demand and supply. Therefore, efficient logistics and faster delivery of products can be proactively and effectively planned.
• Walmart, for example, has robust relationships and communication networks with its suppliers which improves inventory material flow. The retailer, global suppliers and the warehouses operate in sync like a single firm.
• With effective supplier collaborations, they are involved in a holistic end-to-end solution with the retailer. This involvement and collaboration can effectively address retail shifts such as sustainability and environmentally-friendly packaging and supply chain transparency.
• Collaborations between retailers and suppliers have also led to aligned strategic priorities, whereby the two parties can contribute and share benefits towards a given course. This is for example in waste reduction, which is a key retail shift in the industry.

Use of Distribution Centers and Warehouses

• Just like retailers, suppliers are addressing the retail shifts in last-mile delivery, omnichannel strategies, and logistics improvements and faster delivery through the use of distribution centers and warehouses. The direct-store delivery (DSD) model is fading off especially amongst the large-scale suppliers.
• As the use of third party logistics companies as well as drop shipping is increasing, it is becoming easier for suppliers to address these retail shifts.
•  Walmart's suppliers deliver the products to the warehouses, then Walmart cross-docks them to their respective Walmart stores. This has not only addressed the above retail shifts but also reduced transportation costs and eliminated inefficiencies.
• As of 2019, Nestle has adopted the warehouse model and has done away with the direct-store delivery (DSD) for the frozen products segment. This is anticipated to bring down retail prices and increase the competitiveness of Nestle products.

Adopting Technology and Automation in Their Processes

• Manufacturers, as suppliers, are becoming more data-driven and are adopting automation to enable increased near-shoring and onshoring of production in various industries. This is particularly common in the apparel industry.
•  Artificial intelligence and robotics have been integrated into logistics to accelerate operational, distribution, and delivery efficiencies for the suppliers. With the use of advanced analytics, suppliers can timely anticipate and respond to demands in the retail supply chain.
• Manufacturers' product development processes have been sped up by the use of 3D printing and robotics. This has enabled them to produce competitive and on-demand products.
• Walmart suppliers are interlinked using a huge database, Retail Link, that provides real-time data on inventory and status in distribution centers. Moreover, this supports collaborative planning, replenishment scheme and forecasting hence enabling the suppliers to respond proactively to ensure a seamless supply chain process.

China

• According to a publication by Kinsta, China has the largest share of the global e-commerce market.
• The country's e-commerce market was worth $672 billion in January 2020. This represents 20.36% ($672 billion / $3.3 trillion) of the global e-commerce market size within the same period.
• In 2018, the Chinese e-commerce market generated €871 billion ($1 trillion) in revenue.
• China also holds the largest share of the global online retail sales in 2019. The Chinese $1.5 trillion online retail market is larger than the remaining top ten global markets put together.
• China is the leading Asian country for omnichannel retailing. Six areas through which China is "leading the way in omnichannel retailing are no customer channel, high customer expectations, smart sales assistants, mobile-first, self-service kiosks, and virtual/augmented reality.
• Core Chinese e-commerce platforms include Alibaba, AliExpress, JD.com, Kaola, Taobao, Tmall, and VIP.com. Alibaba is regarded as the "world's largest B2B e-commerce marketplace."
• According to Food navigator-asia.com, China is expected to hold the world's largest online grocery market by 2023. The market is currently worth $50.9 billion and expected is to grow at a CAGR of 31% until 2023.
• One of the methods through which the U.S e-commerce market is emulating its Chinese counterpart is through cross-border e-commerce retailing.
• Cross-border e-commerce retailing entails selling goods to online consumers without obtaining a license to run a business in such a country. The channel experienced a "CAGR of 76% between 2015 and 2018."
• Similar to Chinese e-commerce kingpins, top retail companies in the U.S such as "Costco and German grocer Aldi entered China by opening a Tmall Global store in 2014 and 2017, respectively. Both retailers opened offline stores in Shanghai this year, thereby, expanding their China business by using the consumer insights gleaned from their time on Tmall Global."

Japan

• Japan has the fourth largest e-commerce market in the globe; Behind China, the United States, and the U.K.
• The Japanese e-commerce market is worth $79 billion.
• The country also has the second-largest online retail sales market in 2019 among the Asian countries with a market share of $115 billion.
• Similar to China, Japan is the third-largest online grocery market share. The market is currently worth $46.5 billion and expected is to grow at a CAGR of 9.9% until 2023.
• Core Japanese e-commerce platforms include Rakuten, AliExpress, and Qoo10.
• A vital characteristic of the Japanese omnichannel retailing is its urbanization. "Approximately 93% of the total Japanese population (126 million) is urban, giving it the highest urban population of the top 10 e-commerce markets."
• As a result of its urbanization, consumers in Japan want fast and seamless product delivery leading to the growth of "Click and Collect" services in the country. In Japan, there are more than 43,000 convenience stores "(also known as Konbini), most of which are opened 24 hours a day."
•  Amazon, the leading e-commerce platform in the United States, is known to have been successful in adopting this Japanese technique in reaching its customers.

South Korea

• South Korea has the seventh-largest e-commerce market in the globe, putting them behind China and Japan among Asian countries.

• The e-commerce market in South Korea is worth $37 billion.
• The country also has the third-largest online retail sales market in 2019 among the Asian countries with a market share of $90 billion.
• South Korea has the fifth-largest online grocery market and is expected to be valued at $21.3 billion by 2023.
• Core South Korean e-commerce platforms include "Lotte, Hyundai, Shinsegae, GS, CJ, and E-land."
• Although we were unable to identify any ties between the Korean and the United States e-commerce industry in the public domain, an in-depth search revealed that top U.S e-commerce chains such as Walmart and Groupon had previously operated in the Korean retail market but had to exit because they failed to emulate the Korean way of doing things.
• United States companies interested in operating in the Korean market are advised first to understudy the "uniqueness of Korean market and culture while partnering with Korean importers and distributors with good retail industry networks" as this is crucial to succeeding in the South Korean retail market.
• Some examples of U.S companies that have succeeded using this technique include Costco and eBay. "Costco formed a joint venture with a local retail giant while eBay entered the Korean market by acquiring existing Korean online retailers such as Auction and Gmarket."

Research Strategy