DIGITAL SOLUTIONS
SECTION ONE
SECTION TWO
SECTION THREE
How to Become Digital 'Best in Class'
Retailers and manufacturers are not achieving their full digital potential,
according to Kantar Retail’s Digital Power Study, which benchmarks
the digital performances of trading partners.
The study, which suggests that while manufacturers consider Walmart and Amazon to be digital trail blazers, states there are still significant opportunities for both companies to further improve their multichannel presence and offer. Retailers named Procter & Gamble and Unilever as manufacturing digital leaders. But no company achieved the standards Kantar Retail set for its digital “Best in Class‟ status.
Lack of clarity around defining digital is one of the major hurdles for companies, says Kantar Retail, which has developed a unique 10:50:100 framework to help understand the true impact of digital on retail and what is required to win.
The framework illustrates that while e-commerce will surpass 10% of total retail sales in the U.S., the influence of online interactions on retail sales is actually 50%. But to truly succeed, organizations need to adopt a 100% impact mentality, with digital integral throughout the entire business planning process - and not just added on as an afterthought.
To close the gap to Best in Class, Kantar Retail suggests five principles for retailers and manufacturers. They are:
- Multichannel Strategy - Develop a strategic roadmap that informs the corporate and business unit strategy. Digital is an integral part of the processes of the company.
- Omni-Shopper Path to Purchase - Become experts in behavioral segmentation (rather than just demographic and psychographic segmentation) by identifying and demystifying omni-shoppers’ multichannel path to purchase.
- Multichannel Category Leadership -Develop innovative approaches to multichannel by using the real-time store and site point-of-sale (POS) data that digital allows to test and improve ideas.
- Integrated Campaigns - Create fully integrated merchandising and marketing strategies with a shopper-centric view of the item, brand and category.
- Optimized Supply Chain - Optimize e-commerce packaging, logistics, and fulfillment centers to same levels as bricks-and-mortar systems and networks.
The Digital Power Study gathered feedback from 400 U.S. retailers and manufacturers to determine who they consider the current digital leaders in the three disciplines of Strategy, Marketing and Capabilities. The findings enabled Kantar Retail to group manufacturers and retailers into four tiers of performance and capability based on the views of their trading partners: Best in Class, Performing, Progressing, and Participating.
As well as the individual disciplines, the results are also grouped into a composite to show the overall performers. The highlights of this composite are:
- 1. Best in Class - According to the research, no company reached Best in Class status.
- 2. Performing - The results found that manufacturers P&G and Unilever and retailers Walmart, Target and Amazon are the current digital leaders, due to the significant investments they are seen to have already made both financially and in dedicated resources.
- 3. Progressing - This group includes Safeway and Best Buy, which are viewed by manufacturers as aspiring to be a significant multichannel player and are beginning to allocate resources. Manufacturers in the group include PepsiCo and Coca-Cola.
- 4. Participating - This group is emerging from a bricks-and-mortar approach and understands the importance of “digital only” in pockets of the organization, allocating only shared resources to digital marketing and e-commerce. Retailers perceive LEGO and Samsung to be in this category, with manufacturers placing Macy’s and Home Depot here.
“Retailers believe that General Mills and Coca-Cola are going to become digital Power Players, joining P&G and Unilever. Among retailers, Walmart, Amazon and Target are out in front right now but manufacturers think that current efforts by Costco and Kroger will help springboard them into the ranks of Performing companies,” said Dan Raynak, Vice President, Kantar Retail North America Consulting, and one of the authors of the report.
Kantar Retail launched the Digital Power Study with the goal of providing benchmarks at a much deeper level than the overall digital performance measured in Kantar Retail’s annual PoweRanking survey that has provided insight into industry best practices for almost 20 years.
