A “centralized digital version of the truth” for packaged products

[MClotteau]

Consumer Packaged Goods (CPG) is a $1.3 trillion sector still dominated by traditional channels. But, according to the World Economic Forum, online sales will grow from around 10% today to 40% in 2027. Therefore, digital commerce represents a huge opportunity.

The internet has changed consumer behavior forever. Today, the path to purchase includes social media, apps, internet research, in-store visits, and online purchase, and not in this particular order.

As consumers move rapidly between the online and physical world, they expect consistent product information along their individual paths to purchase. They demand deeper details than just the label info. For this reason, companies without accurate and robust product data may experience lower online purchases, higher product returns, lower customer experience and a serious risk of brand damage.

WHAT ARE THE KEY DRIVERS FOR THIS NEW PRODUCT DATA PARADIGM?

1. Product visibility in e-commerce platform

The e­-commerce boom came in with some imperative: as the consumers can’t physically touch the product, manufacturers and retailers need to ensure they provide the right and complete and product information for the consumers to find the product in the top search results and online platforms 

It has never been so critical for manufacturers to provide qualitative and relevant data not only for retailers’ use but for the consumers to find their brands on e-commerce platforms.

2. Complete and quality info, relevant for customer’s decision

 At the same time, as transparency is more and more crucial for consumers in their decision making, specific information related to ingredient (such as allergens), origin (certificates associated), traceability, supplier ethics and practices (such as child labor), as well as environmental and ecological impact (greenhouse gas emissions, carbon footprint, etc.) have become important to consumers. Failing to meet these expectations can make consumers suspicious of the CPG industry and susceptible to criticism from social and traditional media.

So, it is also a matter of complete and qualitative product info, relevant for customer’s buying decisions.

The European regulation UE n°1169/2011 – INCO  has already defined 12 categories to harmonize the way product information should be displayed to end-consumers on food products. If retailers and manufacturers have always collaborated to better serve the consumer, now they must work together even more closely in order to comply with regional and/or local regulations and standards to address this important challenge.

3. Smartphone apps the new influencers for consumers

In this context, and in the lasts three to five years, we have seen growing initiatives and smartphones apps to scan the products during the grocery shopping, such as SmartLabel in the USA and YUKA in Europe.

Yuka alone already counts more than 10 million users in Europe that daily scan 3 million barcodes in France, Belgium, Switzerland, Luxembourg, Spain, and the UK. The app scores the products according to three weighted criteria: nutritional quality, presence of additives and the organic aspect.

These apps are becoming the new trustable influencers to provide the transparency consumers demand. This is so critical to manufacturers, that last June, the 4th Food & Beverage manufacturer in France announced that the company will be reviewing the composition of almost 900 products to satisfy the end-consumers.

Indeed, as consumers are more and more health-conscious about the product they buy and consume, all the products manufactured by this retailer company have been analyzed through Yuka and 850 products have been classified “red”. That’s why the company is changing the recipe of such products within the next 18 months to remove 140 allergens forbidden in 2020 from their recipes.

4. Intelligent packaging

This growing demand from consumers, to have transparent access to a complete understanding of the product they consume and use, is driving to a more “Intelligent” packaging, including QR codes that consumers can directly scan with their smartphone apps.  QR codes link to product details such as nutritional facts, ingredients, advisories, sustainability data, regulatory certificates, brand story, and much more.  Adding on top of that the possibility to create a unique digital identity for every single packaging with serialization technology, manufacturers can jump to the next level, not only facilitating product transparency but connecting easily to their end-consumer to deliver a personalized consumer engagement.  And moreover, providing visibility, traceability and supply chain insights into all stages of the product lifecycle.  But, where does the data, captured on QR codes, come from?  

Where Is the Data?  Consumer Packaged Goods industry manages a huge amount of product information, both structured and unstructured.  But this product information is often siloed and not well maintained or managed within the organization.  Additionally, the product data is constantly increasing due to the requirements for transparency—from regulatory and compliance organizations like the FDA in the US and other governing bodies.Furthermore, manufacturers also pinpoint that the digital flow of data to be delivered to the retailers is difficult to manage: retailers request attributes that are not standardized for the industry and all have different requirements for images.

Therefore, in some cases, the information requested cannot be verified, forcing the manufacturer to submit inaccurate data on a deadline, otherwise risking being unlisted.From the retailer’s side, they must deal with a growing number of product variants due mostly to regional differences and shorter life cycles.Therefore, it has never been more important for retailers and manufacturers to work together in a collaborative approach toward standards in general and, more specifically, toward establishing a minimal set of core data to populate relevant product attributes.

What is definitively needed is a “centralized digital version of the truth” for products and a near real-time synchronization so that all channels have current and updated information.

How big are the efforts for manufacturers and retailers to enable a trusted centralized digital version of the truth to satisfy their consumer’s product information demands?

Originally published on SE Blog