Responding to changes in customer behaviour
Looking back at 2022 it has been a year of CPG (consumer packaged goods) companies responding to the changes in how their end-consumer demand has evolved post the COVID pandemic.
We have all seen the change in consumer buying behaviour, that continues to see more of us shopping online, a trend that is growing rather than slowing down.
And particularly with consumers within the grocery and the home essentials categories, we see a trend for larger “family pack” or multiple items purchased for stocking up, whether from online or physical stores.
CPGs have therefore had to adapt to a new omnichannel business model, where brands now utilise multiple channels, such as physical stores, e-commerce, and social media, to reach out and engage with their target audience.
Along with the proliferation of digital devices facilitating the increase in online shopping, the change in shopping patterns is fueling not just the usual e-commerce retailers but also segments such as the Direct to Consumer (D2C) sector.
Also, with more of a focus now on health and wellness, consumers have been more concerned about maintaining their physical and mental well-being. The CPG brands have responded with new product development, adding new packaging, sizes and healthy options.
Preparing for new product development
So, as consumers change their traditional buying habits CPG companies must be in a position to be able to respond, developing and launching new products that meet the new preferences of their customers.
The ability for companies to quickly adapt to new market conditions must be built into their organisational structure. They must be primed, ready to react before knowing what those changes may be.
A lot of moving parts go into the launch of a new product - even if it’s just a slight variation of an existing product range. The change must cascade through multiple chains in the organisation, the common denominator is the data about the new product.
So the critical question is: How quickly can an organisation:
It’s all about speed and an organisation having the agility to respond to these changes by being prepared in advance.
How a MDM system like Stibo STEP can make a real difference
Having a single source of truth for your product data available at your fingertips coupled with workflows ensures that all necessary steps in the launch of a new product are taken as fast as possible. It also automates everything that can be automated.
Read more about 7 ways To Advance Your Business with Stibo STEP Workflows.
Being tightly integrated with both back-end / upstream systems ensures that data from ERP, production planning, supply chain systems etc. flows directly to the Stibo STEP system as soon as it’s available.
And as soon as the last step in the workflow is completed, the relevant data is shared with partners, retailers, websites etc.
By streamlining the new product onboarding processes with Stibo STEP, you create a launchpad for your new products that will remove many manual tasks and time waste due to communication gaps between departments and ensure that all necessary processes and procedures are followed.
That’s the kind of agility you need to be able to respond quickly to changes.
What is Stibo STEP?
STEP (Stibo Systems Enterprise Platform) is the most comprehensive software solution for creating, consolidating, managing, and publishing accurate and consistent master data across an enterprise organisation.
It helps companies organise and manage their product, customer, and other types of data.
By enabling CPG companies to gain deeper insights into data they can make more informed decisions to optimise their operations, marketing and sales activities.
CPGs are able with STEP to take their products to market faster; be more customer focused; start earning revenue sooner; streamline processes; reduce supply costs; gain visibility into global operations, and increase profitability.
What are the typical CPG challenges?
CPGs have to manage and analyse a huge amount of product, supplier and customer data, which can be scattered across different systems and channels.
If CPGs are going to launch new products or more effectively manage their supply chain, they are at a competitive disadvantage without a single source of truth of information. STEP has the ability to manage all the data through its lifecycle from creation to publication across different formats for a CPG brand.
Plus, there are a plethora of regulations and standards that must be complied with. Especially as CPG brand owners collect more data on their customers, they need to be aware of their obligations under data protection laws, such as the General Data Protection Regulation (GDPR).
By using an omnichannel business model, CPG companies can use data from online and offline sales to gain a better understanding of customer preferences and their likely behaviour.
Using data insights, CPGs can tailor their marketing and product offerings to better meet the needs of their customers. Additionally, an omnichannel approach can help CPG companies to reach a wider audience, as customers can purchase products through more channels.
Best practices with Stibo STEP
To unlock the value in the consumer packaged goods (CPG) industry, we have provided below our best practices of using STEP to address many of the CPG business challenges:
Improving data quality and insights
With STEP, CPG companies can ensure that the product information they use is accurate, comprehensive and kept up-to-date by centralising and standardising the data across all the brand systems and channels.
STEP makes it easy to create, manage, publish and access the product information that is needed on a timely, accurate and consistent basis.
With greater data accuracy, it should lead to improved customer satisfaction, less product returns and increased sales if prospective customers have all the information they need to make a purchase.
Plus strategically, access to better data insights will improve decision-making, lessen the risk of errors and reduce the costs associated with fragmented data management.
Increase business efficiency and speed to market
By automating data-related tasks and processes, STEP can help CPG companies save time and reduce the likelihood of manual data input errors.
Using STEP’s flexible workflow engine, CPGs can automate repetitive tasks, make rule-based decisions and streamline business processes. It uses a centralised database as well as an extensible set of APIs that can be used to create custom interfaces for any legacy or third-party system.
Streamlining product information can also reduce the time and cost associated with launching new products, improving their time-to-market and increase the competitiveness and agility of a CPG brand owner to respond to market changes.
Enhanced customer and supplier data management
STEP can be used to more effectively manage customer and supplier data, helping CPG companies to build stronger relationships and increase efficiency in how they manage their supply chain.
Improved supplier performance can directly lead to cost savings, increased revenue and a better bottom line.
By integrating data from multiple sources, STEP can provide a more comprehensive view of customer behaviour, market trends, and product performance, helping CPGs identify new opportunities and improve their marketing and sales efforts.
Improved data governance
By providing a single source of truth and ensuring data quality, STEP can improve data governance and compliance, avoiding any financial penalties and protecting a CPG brand from any reputational damage.
Better customer experience - no matter the channel
By having accurate and updated product information across all systems and channels, CPG companies can improve the customer experience by providing the right product information to the right customer at the right time.
STEP also integrates with marketing automation tools, POS and e-commerce applications to ensure consistent messaging and product information on any sales channel on or offline.
Consumers are increasingly demanding products that are tailored to their individual preferences, and CPG brand owners need to be able to offer personalisation and customisation options in order to remain competitive.
STEP product content can be seamlessly exported into any format required for online or mobile channels as well as print catalogues or brochures.
Unit of Measure, experts in STEP
Overall STEP can help CPG companies to improve their data quality and governance, increase efficiency and revenue, and gain valuable insights for decision making.
At Unit of Measure we have more than 20 years of experience in implementing STEP for large global enterprises with complex requirements.
Read more about Unit of Measure becoming a Stibo partner.
To unlock the full value of your master data, you must first address the complexities that are inherent in your organisational setup and business model.
Typical drivers of complexity for large global enterprises are e.g.:
Stibo STEP was designed from the ground up to address all these inherent complexities and to allow organisations to gain control of their own data. At Unit of Measure we can help to realise this potential for your organisation.
Book a free consultation call with us today to learn more about how we can help.
There can be many reasons for implementing a STEP solution.
Perhaps you're keen to achieve a single view of product, customer and other master data.
Maybe you're hoping to optimise the processes along your master data value chain, enabling feeds of structured product information to essential marketing and sales channels, such as a webstore.
Delivering on these business drivers results in a master data platform that supports your organisation's current business model. These drivers help your company execute faster, obtain better and more reliable data, spend fewer resources on mundane tasks, break down silos in the organisation, and deliver many other benefits.
But what if you could use STEP to devise an entirely new business model?
In this article, you're going to hear some past accounts of how STEP provided the catalyst for exciting new sources of revenue and bottom-line growth through business model innovation.
The first example is a STEP project I led for a company that had grown quite big within a single product category.
Over the years, they had built an impressive homegrown system that successfully supported their single category focus.
But this market dominance had become a problem.
Their market leadership created little room to grow, creating the need for expansion into other product categories.
However, this was easier said than done.
Over the years, they optimised their internal systems for the single category. When they investigated adding new categories with different data and process requirements, it simply wasn't feasible to extend the legacy system.
With the STEP solution we implemented, they got a new platform for their product data that not only supported the complex requirements of the existing product category but also enabled easy expansion into new categories.
They now offer millions of products across more than 20 high-level categories and hundreds of subcategories.
A few years ago, I headed a STEP project for a large construction equipment rentals company that possessed many physical locations and a rapidly growing webstore.
The core business was doing well, but they were not fully taking advantage of their customers' unique situation when they walked into a store or visited the website to rent a piece of equipment for their building projects.
Their customers required additional related items and accessories that would be consumed as part of using the equipment.
The problem was their original system couldn't suggest these additional items, leaving the customer to remember and do the relevant searches, resulting in lost sales opportunities.
By transforming the customer interaction from "taking orders" to advising the customer about the type of construction task they were involved with, it became possible to cross-sell a range of products that the customer would otherwise have gone to a competing store to collect.
Within the webstore, the related products were carefully linked as up-sell or cross-sell options to each piece of building equipment, therefore maximising the revenue opportunity for each transaction.
But we went one step further and provided a personalised customer experience with detailed guidance on how to use each type of equipment for different building projects, which furthermore increased the customer loyalty and the average order
value.
In his best-selling book, The Long Tail, author Chris Anderson describes how 'endless aisles' of webstores represent a compelling business opportunity.
His idea is that most companies tend to focus their product assortment on offering the best-selling items in their market, which drives massive competition.
However, if a company can offer a high volume of products that only produce a sale here and there, the competition would be smaller, but the combined sales would add up to a significant amount.
The 'endless aisles' concept works on the assumption that:
Products that fit this description are mainly digital products delivered as downloads or streaming, but the model has even proven itself in the world of physical products.
In a previous STEP project, our challenge was to pursue a long tail strategy, thereby tackling the three points above that are inherent in selling physical products.
For a long tail strategy, the setup would need to ensure that:
Point 1 is the most relevant to the Master Data Management (MDM) team.
It's also the hardest nut to crack.
For distributors and retailers, onboarding lots of products from many suppliers presents a challenge.
Each supplier has a different level of maturity and sophistication in terms of how they deliver data about their products and to what extent. Data pools and Product Data Syndication solutions can be part of the answer to this challenge, but it 'takes two to tango'.
If you have hundreds or even thousands of suppliers, you will find that many suppliers will not necessarily dance to your tune unless you are an "800-pound gorilla" in your industry.
To embrace suppliers of different levels of sophistication, we defined a range of supplier data delivery options. Each supplier could choose to deliver data in a way that matched their particular level of sophistication.
But of course, we incentivised for the highest level of sophistication.
The most sophisticated data delivery mechanism allowed for a fully enriched supply of all relevant content, images and supporting documents. The supplier with the best data would present the best information to potential clients, increasing their likelihood of sales.
We also relaxed the data requirement for long tail products and removed any manual checks so that as many products as possible could flow directly from the supplier's files to the webstore.
A variation of the long tail strategy is to leverage the trust and customer experience that consumers already place in your brand.
A prime example of this business model is Amazon.com. 3rd party vendors have sold on Amazon’s platform for years. The sales from these sellers now account for more than 50% of Amazon’s total revenue. On top of that, Amazon is making billions of dollars from selling advertising and warehouse services to its third party sellers.
In this situation, the challenge you face is balancing consumer trust and loyalty with the reward of increased sales of products that are cheap to onboard and administrate. Sellers must commit to meeting your high standards whilst providing the buying experience that your customers have come to expect.
In a recent project, I led the team that received the product catalogue feeds from vendors.
Our priority was to ensure two goals:
We built a sophisticated data quality 'firewall' that checked incoming data feeds for a long list of data quality issues and data completeness to achieve these goals.
We needed a simple way to communicate issues with 3rd party vendors, so we built a detailed list of error messages and resolution instructions that got sent to each data feed owner whenever data defects were found.
This firewall system created a feedback loop that allowed 3rd party vendors to self-correct their product data without the need for more costly and time-consuming internal resources.
The result was a scalable onboarding process with very low variable costs per onboarded product.
There are many ways your business model can be extended or completely transformed with STEP. In this article you have learned just a sample of what is possible.
I have provided just a few examples of how you could extend your business model with e.g. cross-sell and up-sell capabilities.
I have also discussed building a long-tail product strategy, again underpinned through the STEP architecture.
You could also consider transforming your website into an Amazon-style 3rd party marketplace.
If you would like to explore in which ways your business model could be extended by leveraging the successful STEP implementations we have delivered in the past, the next step is to book a STEP Discovery call.
We are thrilled to announce that Unit of Measure is now officially a Stibo Systems partner.
The partnership will strengthen our already strong relationship with Stibo Systems and we look forward to work closely with Stibo Systems for the years to come.
We are probably one of the only Stibo Systems partners who have a sole focus on providing STEP PIM and MDM implementations, developments and support and being a partner gives us a unique opportunity to access STEP technology and resources that we can use to further develop our offerings to companies running STEP.
Click here to check out our press release about this exciting news.
We're hiring STEP profiles for our office in India
At Unit of Measure, we are right now looking for both highly experienced STEP profiles as well as upcoming STEP talents for our office in India.
Would you like to be part of a dynamic company that:
Unit of Measure was founded by ex-Stibo employee Martin Kjeldsen. He has spent most of his career working with STEP and you now have a chance to become one of the core members of his team to fulfil our vision of making Unit of Measure the leading centre of excellence for STEP competencies.
If you wish to apply for one of the open positions, or maybe just wish to learn more about this opportunity, please follow this link and answer a few questions about yourself and we will be in touch as soon as possible:
https://bit.ly/3jH5D4T
