Cross-Channel Convergence
As consumers we expect CPG companies to provide detailed product information, unparalleled convenience, and best-in-class service whenever, wherever, and however. We want to buy anywhere, ship anywhere, and return anywhere while expecting the service levels to be consistent across channels. We also expect our favorite retailers to know who we are and remember our preferences. This convergence of channels in the eyes of consumers is one of the game changers as discussed in my previous post - The Rise of the Prosumer. Are the CPG companies and retail chains ready to embrace the convergence of multiple channels?
Reality check on cross-channel convergence
Yes, consumers are expecting the channels to converge, but in reality the channels are acting in silos using disparate systems. While each channel may be reasonably successful independently, CPG companies are unable to harness synergies that may exist across channels and enhance profitability.
In addition, there are several other factors that may be impacting -
- Organizational structures may create fear of channel cannibalization from various business units.
- Incentives and commission programs might not promote cross-channel selling.
- A lack of integrated merchandising, order fulfillment, and inventory management processes will prevent organizations from streamlining operations.
- Disparate views of a single customer across multiple channels may be hampering CPG companies from making personalized and targeted promotions.
- If different technology and applications are deployed for each channel, decision-makers will be unable to develop holistic order and inventory strategies that will help to control costs.
Probably these are some of the reasons that the channels have not converged yet.
Potential benefits of channel convergence
And If studies are anything to go by, research indicates that cross-channel consumers are among the most valuable lot. As a CPG company, you can do a number of profitable things if you achieve true cross-channel convergence - a 360 degree view of consumers, highly targeted promotions, accurate product assortments backed by customer need data and purchasing behavior across channels, better inventory management for all channels, and much more. In a nutshell, you can give customers what they want, when, where and how they want.
Clearly, channel convergence isn't a choice for CPG companies anymore. It is an imperative - one that will build customer loyalty, strengthen brands, and optimize business across all channels. What in your opinion is the biggest hurdle for achieving cross channel convergence? Let me know.
The CGT Sales & Marketing event is around the corner, and I'm very excited to meet the peers and leaders of the industry. My session focuses on the action plans of CPG companies to connect with consumers across channels and I'm sure I'll be listening to the experts from the industry. I'll keep you readers posted.
