Marketplace disruptions caused by the rapid growth in ecommerce and social media are posing major threats and opportunities for consumer package goods (CPG) companies. Designing innovative products and packages that delight consumers have always been important, but innovation today needs to be faster, more effective and less expensive than ever before. Strong marketing implementation has also always been important, but the complex environment today requires a highly efficient, integrated omnichannel approach. Technology can help enable these transformations.
Design innovation will continue to play an increasingly important role for CPG Companies. Several studies (here, here and here) have shown that S&P 500 companies that invest most into design processes outperformed the rest of the index by about 200%. Companies that follow design thinking principles simply do a better job of understanding true consumer needs, and brainstorming, prototyping and testing new ideas that better meet consumer needs.
The first three steps of the design thinking process are highly people-centric activities. First, the brand must empathize with consumers to understand their needs, then define a problem statement and finally, ideate potential solutions. When they move to the prototyping and testing phases, they need to quickly and cost-effectively iterate through multiple different scenarios.
How technology helps: 3D (or CAD) design and virtual reality technologies allow global cross-functional teams to quickly and inexpensively create multiple realistic prototype ideas and then test them in simulated store shelf or home use environments. Feedback from each iteration can then quickly be incorporated into the next iteration until a successful idea is developed and validated.
Brand management in today’s world requires companies to communicate a compelling brand message that includes important visual cues along with consumer relevant content.
The one place where key brand information such as logos, graphics, colors and marketing claims come together with key product information such as ingredient statements, warning statements, usage instructions and product endorsements is the package label design. It is an important brand management requirement, and often a legal requirement, that all of these individual elements are correct and consistent. Since many of these individual elements are developed and approved by different groups, this creates a major logistics and data management challenge.
How technology helps: to manage this situation, CPGs use sophisticated artwork management software. These provide the platform for global cross-functional teams to collaborate on the development and approval of all artwork elements, which is a great start. But it is only a start.
Since many of the individual elements of the artwork are often initially developed and approved in different places using different systems, this could lead to delays and errors. That is why it is also important for companies to use content management systems that integrate all of the individual systems into one efficient and accurate process.
The next hurdle a CPG faces is message consistency in an integrated omnichannel marketing approach. Once the package is developed and approved, it is also important that it be consistently and appropriately presented across all distribution channels. These channels include e-commerce, social media, and direct to consumer, as well as traditional brick-and-mortar, point of sale, and print channels. Package images and copy will look different on a smartphone vs a computer screen vs on a store shelf. But they all need to be accurate and they all need to convey a consistent brand message.
How technology helps: in order to manage this complexity, many companies are integrating their artwork management systems with digital asset management software.
But technology by itself is not enough to address these challenges. It is also critical to optimize the process workflows themselves and to optimize organization structure and roles and responsibilities. Instead of developing individual package elements separately and sequentially, it could be more efficient and effective to have processes and organizational structures that coordinate the design and development of on-shelf packs, promotion packs and images for e-commerce and social media at the same time.
The implementation of a new technology can often be used as the justification to also optimize the process workflow and organization roles and responsibilities. And of course, it is absolutely critical to have strong senior management support, or the entire effort could be a waste of time.
All of these processes can be complicated enough but can become even more complicated for CPGs who need to balance the needs of global brand consistency with the needs of local market implementation. However, the solution is the same: companies need the help of robust technologies, alongside well-defined processes, with clear roles and responsibilities. CPGs that embrace and lead transformations in technology, process and organization will likely be successful in the future, but those that fall behind on these transformations will likely lose market share, and may eventually go out of business.
John Morrow has extensive experience leading successful Global Business Process Improvements at Colgate-Palmolive, Procter & Gamble, PepsiCo, and Bristol-Myers Squibb. This includes Packaging Artwork Systems, Omni-Channel Marketing Systems, R&D/Product Development Systems, and Quality Assurance Systems.
Most recently, John was World-wide Director of Global Artwork Operations at Colgate-Palmolive where he led the successful implementation of Colgate’s Global Artwork Management System. This included the global rollout of the Esko Webcenter software and resulted in a two-thirds reduction in global artwork cycle-times.
John earned a BS in Chemical Engineering from the University of Notre Dame and an MBA in Marketing from Xavier University. He retired from Colgate in early 2018 and now runs his own consulting practice for business process improvements.
