Betting On a Winning Horse: the Digitalisation Era and the CPG Industry

Ruiyi Guo
> 5 min
|
June 17, 2019
The era of digitalisation has arrived. A recent research led by the McKinsey Global Institute shows that growth and productivity, within different market sectors of the US, are stronger for companies that are betting on this fast horse.

One number above many others, given by the World Economic Forum, gives a measure of what digitalisation means. Getting digital could allow enterprises to  “unlock about $1 trillion of value for the industry and wider society over the next decade."

What does digitalization mean in today's world?

Digitalization means many things. It is not just about “being out there” and popping out of customers’ screens. It is a shift, both in mentality and in practice, many industries are embracing.

First, it is a new touch-points culture. Companies need to put a flag on relevant online and offline venues - by the way, is offline still really off-line? Getting digital means hiring people that know what digital means and being able to select on which touch-points it is important to be.

Second, it is a listening culture. Companies to gather customer data and perform analysis to draw insights. If data is the new oil, then data analysis is the new transformation process to turn oil into driving force for growth and expansion.

Third, we are talking about a participation culture. Companies need to tear down the wall that separates them from their customer, talking directly to them and understanding them thoroughly. Data analysis services are gold in this case. Through digitalisation, a company can analyze the public data generated by its consumers when they are surfing the Internet and bridge the gap between the consumer's demand and what they supply.

How Food & Beverage companies benefit from digitalisation?

One of the industries that should focus more on touch-points, listening and participation is the food and beverage industry. Indeed, a research led by Accenture shows a potential of £56 billion in value could be unlocked if the industry dives into the era of digitalisation.

There is so much to find out about customers and to improve, for an F&B company that decides to believe in digitalization.

First, digitalisation can improve the consumer experience, which can make your brand stand out in a sea of competitors. This is particularly true for soft drink companies. Due to the increasing regulatory burden and rising competition, it is important for a soft drink company to provide a premium drinking experience for its customers to make a long-lasting brand impact.

Several companies are already doing this. The beverage giant Pernod Ricard has been experimenting with the implementation of Near Field Communication (NFC) chips in their products, which the drinkers can connect to a web app to place an order or benefit from exclusive promotions. Meanwhile, customer data is also recorded for future insight analysis.

Diageo also sped into the first wave of digitalisation to enhance customer experience by collaborating with Amazon and launching thebar.com. The goal is to guide customers to produce personalized cocktails at home.

Leaving aside the obvious touch-points attitude, companies can also analyze customers’ preferences via information collected from social platforms. Indeed, social media and home delivery platforms generate a huge amount of public data, and data is the new spell to perform magic.

Many companies have realized this and are cooperating with digital partners for distribution. Coca-cola is selling drinks on a Uber ride and Lyft in the U.S; Starbucks shakes hands with Tencent and now coffee can be gifted through WeChat. Giants have been strengthening their relationship with partners who have better digital channels for distribution, so why wait to be the last to enter the digital world?

In the East: Haidilao Hotpot meets Alibaba Cloud

An inspiring example of the participation culture for the food-chain companies, instead, can be the cooperation between Haidilao Hotpot and Alibaba Cloud. Haidilao Hotpot is a popular restaurant chain funded in China. It counts over 300 restaurants and 50,000 employees around the world.

To understand customer's behavior and preferences, Alibaba Cloud created, for Haidilao, a super-app that contains 30 million members' data. This app aims to provide personalized services to each member of Haidilao. It not only allows customers to take orders, make reservations on it. It also integrates functions such as community channel and short video sharing into it.

But the most advanced function of this app has yet to come. It can "remember" every different customer's preferences - for each of the 30 million registered members! This means that the contents of the menu recommendation, promotion information are always different for every member.

This brings many benefits to Haidilao. "The new technology enhances the connection between administrators and consumers, enhances operational efficiency, enhances the customer experience, and enriches the possibilities of Haidilao serving customers." As the Chief Strategy Officer of Haidilao put it, new technologies such as cloud computing and big data are fundamentally catalyzing the transformation of the catering industry.

Of course, Alibaba Cloud is not the only company that has been using cookies to analyze customer’s preferences. In the West, the e-Commerce giants Amazon has also been applying the same technology. Cookies are generated by every click you have made on Amazon’s website, and this is where the root of niche marketing lies. Amazon can track the preferences of the customers and recommend personalized products for them.

What lies ahead?

It is easy to imagine that, with the advent of AI-powered technologies and services, marketing and sales strategies will be, in time, completely renovated.

Many companies are already combining AI and marketing to operate trend analysis and customer behavior insight analysis. Such technologies allow them to improve their distribution processes, better understand their audiences and take more informed decisions.

And what about the years to come? Well, the next step is probably a forward-thinking digitization, that will bring companies one step ahead of their customers, allowing them to predict their needs and serve them even better.

As said, this horse runs faster and faster.

About Dashmote

Dashmote is an AI technology scale-up headquartered in Amsterdam, The Netherlands. With the goal of bridging the gap between images and data, we are working to bring AI-based solutions to marketers for clients like Heineken, Unilever, Philips, L’Oreal, and Coca-Cola. We add value in areas such as Location Analysis, Trends Analysis, and Marketing Intelligence. Doing so on a global level, our company today has offices in Amsterdam, Shanghai, Vienna, and New York.

Are you interested in our AI-powered solutions? Get in touch with us, we will tell you everything you want to know about them!

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