digital transformation fmcg case study

The new model for consumer goods

The fast-moving-consumer-goods industry has a long history of generating reliable growth through mass brands. But the model that fueled industry success now faces great pressure as consumer behaviors shift and the channel landscape changes. To win in the coming decades, FMCGs need to reduce their reliance on mass brands and offline mass channels and embrace an agile operating model focused on brand relevance rather than synergies.

A winning model for creating value

For many decades, the FMCG industry has enjoyed undeniable success. By 2010, the industry had created 23 of the world’s top 100 brands and had grown total return to shareholders (TRS) almost 15 percent a year for 45 years—performance second only to the materials industry.

The FMCG value-creation model

This success owed much to a widely used five-part model for creating value. Pioneered just after World War II, the model has seen little change since then. FMCG companies did the following:

• Perfected mass-market brand building and product innovation. This capability achieved reliable growth and gross margins that are typically 25 percent above nonbranded players.
• Built relationships with grocers and other mass retailers that provide advantaged access to consumers. By partnering on innovation and in-store execution and tightly aligning their supply chains, FMCG companies secured broad distribution as their partners grew. Small competitors lacked such access.
• Entered developing markets early and actively cultivated their categories as consumers became wealthier. This proved a tremendous source of growth—generating 75 percent of revenue growth in the sector over the past decade.
• Designed their operating models for consistent execution and cost reduction. Most have increased centralization in order to continue pushing costs down. This synergy-based model has kept general and administrative expenses at 4 to 6 percent of revenue.
• Used M&A to consolidate markets and create a basis for organic growth post acquisition. After updating their portfolios with new brands and categories, these companies applied their superior distribution and business practices to grow those brands and categories.

Signs of stagnating success

But this long-successful model of value creation has lost considerable steam. Performance, especially top-line growth, is slipping in most subsegments. The household-products area, for example, has dropped from the sixth most profit-generating industry at the start of the century to the tenth, measured by economic profit. Food products, long the most challenging FMCG subsegment, fell from 21st place to 32nd. As a consequence, FMCG companies’ growth in TRS lagged the S&P 500 by three percentage points from 2012 to 2017. As recently as 2001–08, their TRS growth beat the S&P by 6 percent a year.

The issue is organic growth. From 2012 to 2015, the FMCG industry grew organic revenue at 2.5 percent net of M&A, foreign-exchange effects, and inflation, a figure that is a bit lower than global GDP over the period. But companies with net revenue of more than $8 billion grew at only 1.5 percent (55 percent of GDP), while companies under $2 billion grew at twice the large company rate.

This difference suggests that large companies face a serious growth penalty, which they are not making up for through their minor expansion in earnings before interest and taxes (Exhibit 1).

This growth challenge really matters because of the particular importance of organic growth in the consumer-goods industry. FMCG companies that achieve above-market revenue growth and margin expansion generate 1.6 times as much TRS growth as players who only outperform on margin.

Ten disruptive trends that the industry cannot ignore

Why has this FMCG model of value creation stopped generating growth? Because ten technology-driven trends have disrupted the marketplace so much that the model is out of touch. Most of these trends are in their infancy but will have significant impact on the model within the next five years (Exhibit 2).

Disruption of mass-market product innovation and brand building

Four of the ten trends threaten the most important element of the current model—mass-market product innovation and brand building.

The millennial effect

Consumers under 35 differ fundamentally from older generations in ways that make mass brands and channels ill suited to them. They tend to prefer new brands, especially in food products. According to recent McKinsey research, millennials are almost four times more likely than baby boomers to avoid buying products from “the big food companies.”

And while millennials are obsessed with research, they resist brand-owned marketing and look instead to learn about brands from each other. They also tend to believe that newer brands are better or more innovative, and they prefer not to shop in mass channels. Further, they are much more open to sharing personal information, allowing born-digital challenger brands to target them with more tailored propositions and with greater marketing-spend efficiency.

Millennials are generally willing to pay for special things, including daily food. For everything else, they seek value. Millennials in the United States are 9 percent poorer than Gen Xers were at the same age, so they have much less to spend and choose carefully what to buy and where to buy it.

Digital intimacy (data, mobile, and the Internet of Things [IoT])

Digital is revolutionizing how consumers learn about and engage with brands and how companies learn about and engage with consumers. Yesterday’s marketing standards and mass channels are firmly on the path to obsolescence. Digital-device penetration, the IoT, and digital profiles are increasing the volume of data collected year after year, boosting companies’ capabilities but also consumer expectations. Most FMCGs have started to embrace digital but have far to go, especially in adopting truly data-driven marketing and sales practices.

Some FMCG categories, particularly homecare, will be revolutionized by the IoT . We will see the IoT convert some product needs, like laundry, into service needs. And in many categories, the IoT will reshape the consumer decision journey , especially by facilitating more automatic replenishment.

Explosion of small brands

Many small consumer-goods companies are capitalizing on millennial preferences and digital marketing to grow very fast. These brands can be hard to spot because they are often sold online or in channels not covered by the syndicated data that the industry has historically relied on heavily.

But venture capitalists have spotted these small companies. More than 4,000 of them have received $9.8 billion of venture funding over the past ten years—$7.2 billion of it in the past four years alone, a major uptick from previous years (Exhibit 3). This funding is fueling the growth of challenger brands in niches across categories.

Retailers have also taken notice of these small brands. According to The Nielsen Company, US retailers are giving small brands double their fair share of new listings. The reason is twofold: retailers want small brands to differentiate their proposition and to drive their margins, as these small brands tend to be premium and rarely promote. As a consequence, small brands are capturing two to three times their fair share of growth while the largest brands remain flat or in slight decline (Exhibit 4).

Five factors make a category ripe for disruption by small brands. High margins make the category worth pursuing. Strong emotional engagement means consumers notice and appreciate new brands and products. A value chain that is easy to outsource makes it much easier for born-digital players to get started and to scale. Low shipment costs as a percent of product value make the economics work. And low regulatory barriers mean that anyone can get involved. Most consumer-goods categories fit this profile.

The beauty category in particular is an especially good fit, so the advanced explosion of small brands in this category is no surprise . In color cosmetics, born-digital challenger brands already represent 10 percent of the market and are growing four times faster than the rest of the segment. The explosion of small brands in beauty enjoys the support of significant venture-capital investment—$1.6 billion from 2008 to 2017, with 80 percent of this investment since 2014.

At the same time, digital marketing is fueling this challenger-brand growth while lifting the rest of the category, as beauty lovers find new ways to indulge in their passion. An astounding 1.5 million beauty-related videos are posted on YouTube every month, almost all of them user generated.

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We believe that this bellwether category portends well for FMCG incumbents. After a few challenging years, the incumbent beauty players are responding effectively and are mobilizing to capitalize on the dynamism in their industry, particularly through greater digital engagement. They are innovating in digital marketing and running successful incubators. The year 2016 alone saw 52 acquisitions of beauty-related companies.

Better for you

For years, consumers said that they wanted to eat healthier foods and live healthier lifestyles, but their behavior did not change—until now. Consumers are eating differently, redefining what healthy means, and demanding more products that are natural, green, organic and/or free from sugar, gluten, pesticides, and other additives. Packaged-food players are racing to keep up, even as consumers are increasing pressure on the packaged-goods subsector by eating more fresh food.

Disruption of mass-retailer relationships

Three trends are fueling a fierce business-model battle in retail. The e-commerce giants are already the clear winners, while the discounter business model is also flourishing. Mass merchants are feeling the squeeze.

E-commerce giants

E-commerce giants Amazon, Alibaba Group, and JD.com grew gross merchandise value at an amazing rate of 34 percent a year from 2012 to 2017. As their offer attracts consumers across categories, they are having a profound impact on consumer decision journeys. This change requires FMCGs to rewrite their channel strategies and their channel-management approaches, including how they assort, price, promote, and merchandise their products, not just in these marketplaces but elsewhere. This disruption is in early days in markets other than China and will accelerate as the e-commerce giants increase their geographic reach and move in to brick-and-mortar locations. Amazon’s push on private labels is a further game changer. To see the future, we can look to how China FMCG retailing has been revolutionized by Alibaba Group and JD.com and the profound impact Amazon has had on its early categories like electronics, books, and toys.

Discounters

ALDI and LIDL have grown at 5.5 percent from 2012 to 2017, and they are looking to the US market for growth. Discounters typically grow to secure market share of 20 percent or more in each grocery market they enter. This presence proves the consumer appeal of the format, which enables discounters to price an offering of about 1,000 fast-moving SKUs 20 percent below mass grocers while still generating healthy returns.

Mass-merchant squeeze

The rise of the e-commerce giants and the discounters is squeezing grocers and other omnichannel mass merchants. Together, the seven largest mass players saw flat revenue from 2012 to 2017. This pressure is forcing mass merchants to become tougher trading partners. They are pursuing more aggressive procurement strategies, including participating in buying alliances, getting tighter on SKU proliferation, and decreasing inventory levels. They are also seeking out small brands and strengthening their private labels in their quest for differentiation and traffic.

Disruption of developing-market category creation: The rise of local competitors

Developing markets still have tremendous growth potential. They are likely to generate new consumer sales of $11 trillion by 2025, which is the equivalent of 170 Procter & Gambles.

But local competitors will fight for that business in ways the multinational FMCGs have not seen in the past. As new competitors offer locally relevant products and win local talent, FMCG companies will need to respond—which will challenge the fairly centralized decision-making models that most of them use.

Further, channels in developing markets are evolving differently than they did in the West, which will require FMCGs to update their go-to-market approaches. Discounter-like formats are doing well in many markets, and mobile will obviously continue to play a critical, leapfrogging role.

Disruption of the synergy-focused operating model: Pressure for profit

Driven by activist investors, the market has set higher expectations for spend transparency and redeployment of resources for growth . Large FMCGs are being compelled to implement models such as zero-based budgeting that focus relentlessly on cost reduction. These approaches, in turn, typically reduce spend on activities such as marketing that investors argue do not generate enough value to justify their expense. While this approach is effective at increasing short-term profit, its ability to generate longer-term winning TRS, which requires growth, is unproven.

Disruption of M&A: Increasing competition for deals

M&A will remain an important market-consolidation tool and an important foundation for organic revenue growth in the years following an acquisition. But some sectors like over-the-counter drugs will see greater competition for deals, especially as large assets grow scarce and private-equity firms provide more and more funding.

Of course, the importance of these ten disruptive trends will vary by category. But five of the trends—the millennial effect, digital intimacy, the explosion of small brands, the e-commerce giants, and the mass-merchant squeeze—will deliver strong shocks to all categories (Exhibit 5).

A new model for creating value in a reshaped marketplace

To survive and thrive in the coming decades, FMCG companies will need a new model for value creation, which will start with a new, three-part portfolio strategy. Today, FMCGs focus most of their energy on large, mass brands. Tomorrow, they will also need to leapfrog in developing markets and hothouse premium niches.

This three-part portfolio strategy will require a new operating model that abandons the historic synergy focus for a truly agile approach that focuses relentlessly on consumer relevance, helps companies build new commercial capabilities, and unlocks the true potential of employee talent . M&A will remain a critical accelerator of growth, not only for access to new growth and scale, but also new skills (Exhibit 6).

Broader, three-part portfolio strategy

Today, most FMCGs devote most of their energy to mass brands. Going forward, they will need excellence in mass-brand execution as well as the consumer insights, flexibility, and execution capabilities to leapfrog in developing markets and to hothouse premium niches.

Sustaining excellence in the developed-market base

Mass brands in developed markets represent the majority of sales for most FMCGs; as such, they are “too big to fail.” FMCGs must keep the base healthy. The good news is that the industry keeps advancing functional excellence, through better technology and, increasingly, use of advanced analytics. The highest-impact advances we see are revamping media spend, particularly through programmatic M&A and understanding of return on investment, fine-tuning revenue growth management with big data and tools like choice models, strengthening demand forecasting, and using robotics to improve shared services.

In addition to taking functional excellence to the next level, FMCGs will need to focus relentlessly on innovation to meet the demands of their core mass and upper-mass markets.

FMCGs will need to increase their pace of testing and innovating and adopt a “now, new, next” approach to ensure that they have a pipeline of sales-stimulating incremental innovation (now), efforts trained on breakthrough innovation (new), and true game changers (next).

Perspectives on retail and consumer goods, Number 6

Further, FMCGs will need to gather their historically decentralized sales function, adopting a channel-conflict-resistant approach to sales. They will need to treat e-commerce as part of their core business, overcome channel conflict, and maximize their success in omni and e-marketplaces. Players like Koninklijke Philips that have weathered the laborious process of harmonizing trade terms across markets are finding that they can grow profitably on e-marketplaces.

Finally, FMCGs will need to keep driving costs down. We are following three big ideas on cost.

First, zero-based budgeting achieves sustained cost reduction by establishing deep transparency on every cost driver, enabling comparability and fair benchmarking by separating price from quality, and establishing strict cost governance through cost-category owners who are responsible for managing cost categories across business-unit profits and losses.

Second, touchless supply-chain and sales-and-operations planning replace frequent sales-and-operations meetings with a technology-enabled planning process that operates with a high degree of automation and at greater speed than manual processes.

Third, advanced analytics and digital technologies improve manufacturing performance by pulling levers like better predictive maintenance, use of augmented reality to enable remote troubleshooting by experts, and use of advance analytics for real-time optimization of process parameters to increase throughput yield of good-quality product.

Many of these changes will require strengthening technology—making it a core competency, not a cost center.

Leapfrogging new category creation in developing markets

FMCG companies must bring their newest and best innovation, not lower-quality products, into developing markets early to capture a share of the $11 trillion potential growth. Success will require excellent digital execution, as many of these markets will grow up to be digital. Success will also require empowering local leadership to compete with the local players looking to seize the market’s growth potential. Local leaders will need decision rights on marketing as well as a route to market that is joined up across traditional, omni, and e-marketplace channels.

Hothousing premium niches

FMCG companies must identify and cultivate premium niches that have attractive economics and high growth potential to capitalize on the explosion of small brands. Success will require acquiring or building small businesses and helping them reach their full potential through a fit-for-purpose commercialization and distribution model. This means, for example, building a supply chain that produces small batches and can adapt as companies learn from consumers. The beauty industry’s incubators are a good model here.

The demands of this three-part portfolio strategy call for a new, agile operating model that allows a company to adapt and drive relevance rather than prioritizing synergy and consistent execution above other objectives.

Agile operating model

Originating in software engineering, the concept of an agile operating model has extended successfully into many other industries, most significantly banking. Agile promises to address many of the challenges facing the traditional FMCG synergy-focused model.

Building an agile operating model requires abandoning the traditional command-and-control structure, where direction cascades from leadership to middle management to the front line, in favor of viewing the organization as an organism. This organism consists of a network of teams, all advancing in a single direction, but each given the autonomy to meet their particular goals in the ways that they consider best. In this model, the role of leadership changes from order-giver to enabler (“servant leader”), helping the teams achieve their goals.

An agile operating model has two essential components—the dynamic front end and the stable backbone. Together, they bring the company closer to customers, increase productivity, and improve employee engagement.

The dynamic front end, the defining element of an agile organization, consists of small, cross-functional teams (“squads”) that work to meet specific business objectives. The teams manage their own efforts by meeting daily to prioritize work, allocate tasks, and review progress; using regular customer-feedback loops; and coordinating with other teams to accomplish their shared goals.

The stable backbone provides the capabilities that agile teams need to achieve their objectives. The backbone includes clear rights and accountabilities, expertise, efficient core processes, shared values and purpose, and the data and technology needed for a simple, efficient back office.

The agile organization moves fast. Decision and learning cycles are rapid. Work proceeds in short iterations rather than in the traditional, long stage-gate process. Teams use testing and learning to minimize risk and generate constant product enhancements. The agile organization employs next-generation technology to enable collaboration and rapid iteration while reducing cost.

We also expect the FMCG operating model of the future to be more unbundled, relying on external providers to handle various activities, while FMCGs perhaps provide their own services to others.

M&A as an accelerator

M&A will remain critical to FMCG companies as a way to pivot the portfolio toward growth and improve market structure. The strongest FMCGs will develop the skills of serial acquirers adept at acquiring both small and large assets and at using M&A to achieve visionary and strategic goals—redefining categories, building platforms and ecosystems, getting to scale quickly, and accessing technology and data through partnership. These FMCGs will complement their M&A capability with absorbing and scaling capabilities, such as incubators or accelerators for small players, and initiatives to help their teams and functions support and capitalize on the changing business.

Moving forward

To determine how best to respond to the changing marketplace, FMCG companies should take the following three steps:

• Take stock of your health by category in light of current and future disruption, and decide how fast to act. This means asking questions about the external market: how significantly are our consumers changing? How well positioned are we to respond to these changes? What are the scale and trajectory of competitors that syndicated data do not track? Is our growth and rate of innovation higher than these competitors, particularly niche competitors? How advanced are competitors on making model changes that might represent competitive disadvantages for us? How healthy are our channel partners’ business models, and to what degree are we at risk? Do our future plans take advantage of growth tailwinds and attractive niches? Answering these questions creates the basis for developing scenarios on how rapidly change will happen and how the current business model might fare in each scenario.
• Draft the old-model-to-new-model changes that will position the company for success over the next decade. This is the time to develop a three-part portfolio strategy and begin the multiyear transformation needed to become an agile organization, perhaps by launching and then scaling agile pilots. This is also the time to determine which capabilities to prioritize and build and the time to redesign the operating model, applying agile concepts and incorporating the IT capabilities that offer competitive advantage. Change management and talent assessment to determine where hiring or reskilling are needed will be critical.
• Develop an action plan. The plan should include an ambitious timeline for making the needed changes and recruiting the talent required to execute the plan.

These efforts should proceed with controlled urgency . Over time, they will wean FMCG companies from reliance on the strategies and capabilities of the traditional model. Of course, as companies proceed down this path, they will need to make ever-greater use of the consumer insights, innovation expertise and speed, and activation capabilities that have led the industry to success and will do so again.

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Gregory Kelly is a senior partner in McKinsey’s Atlanta office , Udo Kopka is a senior partner in the Hamburg office , Jörn Küpper is a senior partner in the Cologne office , and Jessica Moulton is a partner in the London office .

The authors wish to thank Fabian Chessell, Jasmine Genge, Gizem Günday, Sara Hudson, Anastasia Lazarenko, Ed Little, Susan Noleen Foushee, Kandarp Shah, Sven Smit, Anna Tarasova, and Daniel Zipser for their contributions to this article.

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Digital Transformation in the FMCG and Automotive Industries – Emergence of Digital Innovation Capabilities

• Research Centre for Business in Society
• Oslo Metropolitan University

Research output : Chapter in Book/Report/Conference proceeding › Conference proceeding › peer-review

Technological developments are disrupting the business environment, introducing new and more innovative, digitally-born competitors. Simultaneously, customer engagement with digital technologies, such as social media platforms, has altered behaviour and expectations. Established firms are under siege from these radical and disruptive changes and are responding by engaging in digital transformation using digital resources, including big data, to deliver product as well as process innovation. Such transformation requires new innovation capabilities, but the nature of these capabilities is not well understood. This study addresses the question ‘What are the innovation capabilities that firms require for digital transformation?’. This paper explores innovation capabilities development in four companies, in two industries that are facing significant technology-driven market and operational turbulence. We have collected data from the automotive industry and the fast moving consumer goods (FMCG) industries. Both sectors are experiencing industrial restructuring with new, data-driven competitors, digitalised business models, unconventional alliances, distribution challenges and changing customer expectations. For firms in these industries digital transformation includes process innovation through the introduction of digital technologies and new ways of working to leverage value from big data. It also involves innovation through increasingly personalised customer engagement and the commercialisation of data systems. Using a multiple case study design based on elite interviews, we compare the four firms’ approaches to digital transformation. Our study provides new insights into the digital innovative capabilities (DIC) that firms apply to develop new knowledge within their digital transformation. From our findings we develop five specific propositions for the development of digital innovation capabilities theory.

Publication series

• Digital innovation capabilities
• Digital transformation
• Dynamic capabilities

ASJC Scopus subject areas

• Information Systems and Management
• Management Science and Operations Research

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

• 10.34190/EKM.21.078
• ECKM2021 Brewis and Strønen - Digital Transformation in FMCG and Automotive Industries Accepted author manuscript, 270 KB
• https://www.proquest.com/docview/2581072361

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• Link to publication in Scopus

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• Innovation Social Sciences 100%
• Digital Transformation Social Sciences 50%
• Innovations Computer Science 50%
• Enterprise Economics, Econometrics and Finance 50%
• Innovation Process Social Sciences 33%
• Specific Industry Social Sciences 33%
• Automotive Industry Economics, Econometrics and Finance 33%
• Customer Social Sciences 25%

T1 - Digital Transformation in the FMCG and Automotive Industries – Emergence of Digital Innovation Capabilities

AU - Brewis, Claire

AU - Strønen, Fred

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Y1 - 2021/9

N2 - Technological developments are disrupting the business environment, introducing new and more innovative, digitally-born competitors. Simultaneously, customer engagement with digital technologies, such as social media platforms, has altered behaviour and expectations. Established firms are under siege from these radical and disruptive changes and are responding by engaging in digital transformation using digital resources, including big data, to deliver product as well as process innovation. Such transformation requires new innovation capabilities, but the nature of these capabilities is not well understood. This study addresses the question ‘What are the innovation capabilities that firms require for digital transformation?’. This paper explores innovation capabilities development in four companies, in two industries that are facing significant technology-driven market and operational turbulence. We have collected data from the automotive industry and the fast moving consumer goods (FMCG) industries. Both sectors are experiencing industrial restructuring with new, data-driven competitors, digitalised business models, unconventional alliances, distribution challenges and changing customer expectations. For firms in these industries digital transformation includes process innovation through the introduction of digital technologies and new ways of working to leverage value from big data. It also involves innovation through increasingly personalised customer engagement and the commercialisation of data systems. Using a multiple case study design based on elite interviews, we compare the four firms’ approaches to digital transformation. Our study provides new insights into the digital innovative capabilities (DIC) that firms apply to develop new knowledge within their digital transformation. From our findings we develop five specific propositions for the development of digital innovation capabilities theory.

AB - Technological developments are disrupting the business environment, introducing new and more innovative, digitally-born competitors. Simultaneously, customer engagement with digital technologies, such as social media platforms, has altered behaviour and expectations. Established firms are under siege from these radical and disruptive changes and are responding by engaging in digital transformation using digital resources, including big data, to deliver product as well as process innovation. Such transformation requires new innovation capabilities, but the nature of these capabilities is not well understood. This study addresses the question ‘What are the innovation capabilities that firms require for digital transformation?’. This paper explores innovation capabilities development in four companies, in two industries that are facing significant technology-driven market and operational turbulence. We have collected data from the automotive industry and the fast moving consumer goods (FMCG) industries. Both sectors are experiencing industrial restructuring with new, data-driven competitors, digitalised business models, unconventional alliances, distribution challenges and changing customer expectations. For firms in these industries digital transformation includes process innovation through the introduction of digital technologies and new ways of working to leverage value from big data. It also involves innovation through increasingly personalised customer engagement and the commercialisation of data systems. Using a multiple case study design based on elite interviews, we compare the four firms’ approaches to digital transformation. Our study provides new insights into the digital innovative capabilities (DIC) that firms apply to develop new knowledge within their digital transformation. From our findings we develop five specific propositions for the development of digital innovation capabilities theory.

KW - Automotive

KW - Digital innovation capabilities

KW - Digital transformation

KW - Dynamic capabilities

KW - Innovation

UR - http://www.scopus.com/inward/record.url?scp=85117134684&partnerID=8YFLogxK

U2 - 10.34190/EKM.21.078

DO - 10.34190/EKM.21.078

M3 - Conference proceeding

SN - 9781914587078

T3 - Proceedings of the European conference on knowledge management

BT - ECKM 2021 22nd European Conference on Knowledge Management

A2 - Garcia-Perez, Alexeis

A2 - Simkin, Lyndon

PB - Academic Conferences International Limited

T2 - 22nd European Conference on Knowledge Management, ECKM 2021

Y2 - 2 September 2021 through 3 September 2021

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Accelerating digital transformation in fmcg r&d: key insights.

June 3, 2024

The fast-paced world of Fast Moving Consumer Goods (FMCG) relies heavily on innovation to stay competitive. From household essentials to personal care favorites, the FMCG industry is in a perpetual state of evolution, continuously adapting to meet the ever-changing demands of global consumers. Central to this evolution is the ongoing digital transformation of Research and Development (R&D) laboratories, Quality Assurance (QA) laboratories and Pilot plants where technology is revolutionizing the product development process from conception to market launch.

This blog is based on  a live roundtable discussion among Consumer Goods industry experts which shed light on the pivotal role of digital transformation in Research and Development (R&D) labs ( watch the recording here ).

In contrast to the heavily regulated pharmaceutical sector, the FMCG industry operates with fewer regulatory constraints. However, it still faces a unique set of challenges. Regulatory requirements fluctuate across countries, and unlike pharmaceutical trials, there are no standardized phases. Thus, the FMCG industry maneuvers through a regulatory landscape tailored to each product variant. Nonetheless, it often draws inspiration from the innovative solutions pioneered in the pharmaceutical sector to address its digitalization needs.

Digital Imperative

Like many other industries, the FMCG industry aims to shorten the innovation cycle by improving efficiency and enabling in silico design to reduce the number of designed trials. This relies on capturing a maximum amount of data per experiment in a structured way and making it accessible to inform the next experiment, reducing the need for repeating experiments. “ The goal is to ensure that the data is valuable beyond the lifetime of a project and becomes a long-term resource, ” explains Bernhard Sonderegger ,  Group Leader Scientific Applications and Data management at Nestle.  On an other side, efforts are being made to automate labs and connect instruments for a seamless transfer of data. This would greatly accelerate repetitive process and eliminate potential human errors, both in process and data collection.

“ Whatever can be converted to high throughput should be converted to high throughput, ” states Amit Chandra , Distinguished Scientist, Driving Botanical Innovation and Strategy at Amway R&D.

“ Integration is very important to free us from human errors, ” adds Maneesh Sharma , Global R&D Innovation leader at The Clorox Company. 

Simplifying data capture

In the Consumer Goods industry, data capture remains hybrid, a combination of manual and digital capture depending on the situation and scientist. However, the global goal is to go paperless as it will significantly improves traceability, which is crucial for audits.

To facilitate this transition, traditional lab informatics tools such as the Electronic Lab Notebook (ELN) for early development and sample preparation, alongside the Laboratory Information Management System (LIMS) for routine analysis and QC testing, are being widely adopted. Yet, there's unanimous agreement that manual data entry into these systems remains a time-consuming endeavor, hampering productivity (see White Paper Why ELN needs a Helping Hand…or Voice ).

“ At Clorox, we put the people at the center of what we do, ” emphasizes Maneesh Sharma , Global R&D Innovation leader at The Clorox Company. “ When we put a data capture process in place, we make sure sure that it is the most convenient and widely accepted process. This is why we are partnering with LabTwin to enable hands-free data entry into our ELN. ”

Erdem Akman, Ice Cream R&D Digital Transformation Leader at Unilever, understands the relevance of such a solution as, in the laboratories developing ice creams, time is of the essence due to the rapid melting of ice cream samples and scientists need to hurry to collect data, hindered by their hands often covered with sticky sugary milk.

Such challenges underscore the need for tailored solutions within the Consumer Goods industry, given the diverse and intricate nature of its products, necessitating adaptable approaches to support scientists in their research endeavors.

Improving data accessibility

Collecting data in a digital form is essential to streamline analysis and speed up collaboration. But data is only useful as long as it is available to both train models and inform everyone who needs to make descisions based on it.

“ Before, the data was managed during the project, exchanged in emails and PowerPoint presentations, and ended up in a archive, ” recalls Bernhard Sonderegger , Group Leader Scientific Applications and Data management at Nestle. “ Now we want to build FAIR data assets which can be leveraged when needed ”

“ The purpose of the data is to make decision, so we want to be able to rely on the data that we capture, to find it and use it, ” added Maneesh Sharma , Global R&D Innovation leader at The Clorox Company. “ And for this, the system needs to be user-friendly to be used by people from different backgrounds. ”

Establishing standardization across sites and departments

Achieving standardization across sites and departments is essential for centralizing and cross-analyzing data to inform decisions effectively. This process begins with ensuring that data is standardized in format and originates from comparable procedures, irrespective of the site or department where it was captured.

Standardization of procedures:

Many Consumer Goods organizations have labs in multiple sites and countries, facing the challenge of site-specific testing methods, often executed using different instruments and procedures, resulting in local variabilities. This diversity poses obstacles to data pooling and reproducibility, prompting concerted efforts to unify procedures globally.

“ We need some level of harmonization for consistency, ” highlights Amit Chandra , Distinguished Scientist, Driving Botanical Innovation and Strategy at Amway R&D. “ Right now, we have harmonized our hardware and we have adopted a cloud-based system to share data. This enhances reproducibility. Now, we are working on automatically loading the instrumentation parameters from the primary to the transfer lab through our connected system. This makes running of the transfer method plug-and-play and prevent errors. ”

In addition to standardizing procedures, another significant challenge arises: standardizing scoring methods for sensory assessments using uniform scales. When evaluating product parameters, it is crucial to rate them on a quantitative scale rather than relying solely on qualitative assessments depending on the tester. This quantitative approach ensures consistency and reproducibility across different labs, enhancing the reliability of sensory evaluations.

“ We are trying to standardizing the methodology for sensory assessments by developing standard scales and matching consumer feedback with these scales. For example, how much sweet is a very sweet ice cream? ” elaborates Erdem Akman, Ice Cream R&D Digital Transformation Leader at Unilever.

Standardization of data

The challenge is even bigger when it encompasses different departments with different requirements, whether from a  regulatory point of view or an operational point of view, resulting in a large variation in the way data is captured and in which format.

“ We work in Agricultural Sciences, Food Safety, Health Science, Clinical Trials, Pet Care. But Lab data, for example HPLC data, should be in a standard format, whether it is collected at the Pilot Plant or in the Food Safety department which have different data management systems, ” shares Bernhard Sonderegger ,  Group Leader Scientific Applications and Data management at Nestle. “ And sample IDs and terminologies should be unified through an ontology system. In the proteomics lab, they are using UniProt as reference for the name of a protein where in Clinical Trials, they are using diagnostic markers in medical language to identify the same proteins. We cannot expect our specialists in all those fields to agree on one terminology, so we need to have an ontology system embedded in our systems because at the end of the day, it is the people in the labs that own their own data format.”

While promising technologies like data mesh and knowledge graphs offer potential solutions, their full utilization beyond academic research remains limited. Currently, many organizations attempt to enforce standard templates through shared lab informatics platforms to ensure data capture in a consistent format. However, customization is often necessary to accommodate specific requirements.

“ In R&D the primary goal is to design something new and different, but you need standard templates, so that’s the common friction point. It is hard to fit both FMCG category Ice Cream and Shampoo in a same ELN template therefore, we always customize some parts, ” explains Erdem Akman, Ice Cream R&D Digital Transformation Leader at Unilever.

Addressing the role of AI in this context, Erdem raises important questions about the level of standardization necessary for scientists in the light of the recent progress made in the field. He ponders, "What does AI require in this space? Do we need extensive standardization, or can AI extract insights from unstructured data in the ELN and provide results?". These questions highlight the evolving landscape of data standardization and the potential increasing role of AI in navigating this complexity.

This blog is based a live roundtable discussion among Consumer Goods industry experts which shed light on the pivotal role of digital transformation in Research and Development (R&D) labs ( watch the recording here ).

If you are interested in discussing your specific challenges and the value of LabTwin digital lab assistant, book a call with one of our experts.

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Lab Trends 2023: Sustainability, User-Centered Design, Interoperability

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Explore the fundamental steps toward digital transformation in FMCG

Digitisation of sales processes and data has been touted as the way for FMCG companies to break down channel silos and finally deliver the promise of a true omnichannel strategy. Although digitising specific elements and scaling them across channels is a must, it is not sufficient. As with any transformation, the critical step is upgrading skills & processes to support the change and embed it in the organisation. It is therefore not just about technology & tools but also about onboarding commercial teams and partners in the larger ecosystem to drive and amplify results.

What does “ sales digitisation ” mean in FMCG? Traditional face-to-face in-store sales and remote interactions with business partners are becoming very effective elements of the same toolkit. A blended approach is gaining momentum for manufacturers and retailers, especially in communication, branding and market education. But there are also more opportunities. In addition to bilateral communication, there are many more sales processes that digitisation can make possible or enhance. People at the point of sale (shoppers, POS personnel such as store managers, barkeepers, pharmacists or hairdressers for instance) can be onboarded and take part in a self-service model. This covers merchandising activities, Perfect Store execution, order taking, contract monitoring, shelf check with Image Recognitio n and many others.

DELIVERING A SUCCESSFUL DIGITAL TRANSFORMATION INITIATIVE

Finding the right piece of software is usually just the tip of the iceberg. Digital transformation requires a solid mix of methodology and agility. Here are the steps we see as essential to drive such an initiative:

•   Design the framework around the service and its role in that context.
• Define clear objectives with measurable success criteria.
• Assess and select the tools and service providers that meet your expectations from a functional & capabilities point of view.
• Run the project & support stakeholders throughout the transition, explaining before, during & after the project what this change is meant to bring & what it means for each and every stakeholder. This, together with step 6 is crucial in embedding the change in the organization.
• Involve business partners in sync with your field sales teams, leveraging remote collaboration tools to increase the frequency & quality of execution.
• Calibrate expectations by communicating your plan for iterations and adjustments of processes based on feedback and real-life conditions.

DOES DIGITISATION PAY OFF IN THE FMCG INDUSTRY?

Digitisation brings in a breath of fresh air into the consumer goods Go-to-Market models. It enables you to act faster and at a larger scale to improve the quality of your execution and build a holistic view of the market across channels. It helps to solve problems like limited impact on shelf conditions, late response to urgent problems that cause a loss in revenue or challenging cooperation with stores & personnel. Digitisation also helps overcome frequency and coverage limitations, drive sales excellence and speed up time-consuming processes. It is a proven way to amplify the impact of your teams without having to increase headcount.

Interested? Contact us to learn more about how we help our FMCG clients deliver their digitisation plans: [email protected] or fill the form:

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Marico Minet FMCG Digital Transformation

• Marico Limited, a renowned FMCG company, faced significant challenges with its existing 20-year-old system.
• The outdated technology and lack of scalability hindered the company’s operational efficiency and growth potential.
• Additionally, the system lacked proper developers and suffered from degraded performance over time.
• The old technical architecture also resulted in the integrated systems being updated outside of Marico, compromising security and control.

02 Solution

• Atrina Technologies recommended the adoption of MINET (Marico Integrated Network) , a modern IT system built on ASP .NET Core with Angular for the frontend.
• Azure DevOps was utilized for seamless deployment, ensuring efficient and streamlined operations.

03 Technology Used

ASP .NET Core

Azure DevOps

• Enhanced Efficiency: The implementation of MINET brought significant efficiency improvements to Marico’s operations. The system introduced utility packages and enabled seamless invoice calculation for over 2000 users. The integration with major systems like MIDAS and SAP allowed for streamlined workflows and hierarchical structures, resulting in optimized processes across the organization.
• Scalability: MINET resolved the limitation of data capacity and provided Marico with the scalability it needed to accommodate future growth. The system was designed to handle up to 8000 users, ensuring that Marico could scale its operations effectively.
• Future-Proof Blueprint: Atrina Technologies created a comprehensive blueprint for future developers, outlining the workflow structures, hierarchy configurations, module integration, and user management guidelines. This blueprint enables smoother onboarding for new developers and facilitates efficient system maintenance and upgrades.
• Improved Security: Atrina Technologies implemented robust security measures, including user authentication through Microsoft Teams and token-based authentication via Identity Server. These measures significantly enhanced the security of Marico’s system, mitigating potential risks and ensuring data integrity.
• Self-Upgradation Capability: To address the lack of self-upgradation, Atrina Technologies upgraded the system from .NET 2.0 to .NET 4.3. Furthermore, there are future plans to upgrade to .NET 6, allowing Marico to stay up-to-date with the latest technologies and leverage their benefits.

04 Conclusion

By partnering with Atrina Technologies and implementing MINET, Marico successfully modernized its legacy systems, resolving scalability issues, enhancing operational efficiency, and strengthening security.

The implementation of a future-proof blueprint and the capability for self-upgradation have positioned Marico for sustained growth and adaptability to evolving market needs.

With a more efficient and scalable IT infrastructure in place, Marico is well-equipped to drive innovation, improve customer experiences, and maintain its position as a leader in the FMCG industry.

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Digital transformation in fmcg industry for Asian Paints

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The Challenge

Asian Paints Limited is India’s largest multinational paint company. It engages in manufacturing, selling and distributing paints, coatings, products related to home decor, bath fittings and providing related services. Asian Paints has always been more than simply a paint brand in India, and has become linked with elegant interior décor. This brand image is owed, in part, to marketing and campaigns that go beyond mere paint advertisements.

Asian Paints aspired to better understand their consumers’ unique decision making journey & ways to impact consumer behavior through various digital platforms.

The Solution

Asian Paints collaborated with IIDE to train their brand managers to understand the consumer’s unique decision making behavior. IIDE content experts equipped the participants with knowledge of different social media platforms which could be used to impact the consumer journey.

The brand managers were provided with hands-on practise of various tools and remarketing techniques for improved customer retention.

90% Brand Managers suggested that the learning shared at the training was very relevant and they were able to apply it to their daily tasks

The trainees believed that the various content formats can be used in each stage of AIDA model & correlated to the consumers decision making journey

The trainees were overwhelmed with the training and rated it 4.6/5

Testimonial

Highly recommended.

“All slides we saw were made for our team & the trainer made the effort to point out the importance of each concept from the marketeer & consumers perspective. For any brand that is traditionally a marketing giant & is new to digital media, this program is highly recommended.”

Ramya Balasubramanian Head of Digital and CX, Asian Paints

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The Fast Moving Consumer Goods (FMCG) logistics is complex and demanding in nature. The FMCG industry is driven by dynamic lifestyles, consumer expectations and competitiveness. These factors have surged a need for seamless logistics to cater to the global market standards. 

India’s FMCG logistics can catalyze multi-modal growth strategies by overcoming the critical roadblocks and proactive roadmaps. Industry experts are set to redefine their supply chain operations with lucrative opportunities, growth-focused approaches and flourishing profits. Leading businesses are gradually shifting their focus to a technologically-driven logistics module with holistic control.

Diving into FMCG logistics 

According to a recent report , India’s FMCG sector is expected to grow at a CAGR of 14.9% to reach 220 billion USD by 2025, from 110 billion USD in 2020.

FMCG businesses require an agile logistics workflow due to its high turnover rate, which is driven by three factors: 

• Time-bound industry set up
• Perishable goods 
• High market competitiveness

Added to this, FMCG products have a specific set of storage, safety and transportation guidelines that need optimum compliance. 

India’s FMCG logistics is highly fragmented and the volatile demand-supply scenario requires high responsiveness. Moreover, it involves strategic warehousing and management, to prevent overstocking/ stock outs. The supply chain operations require data-driven forecasting, performance analysis and shipment traceability to cater to the consumer expectation parameters. 

Nonetheless, manufacturers in the industry are investing notably in maximizing logistics efficiency, contributing to the bottom line. The prime focus here is to ensure a seamless on-time delivery of perishable goods by bridging prevalent gaps.

FMCG Case Study

Roadblocks in FMCG logistics

The FMCG industry is one of the fastest growing verticals in India, however underlying bottlenecks in the logistics value chain continue to affect its performance and cost dynamics at a global level. These challenges restrict a manufacturer’s scope of expansion amidst the industry volatility. 

Some of the critical challenges faced by logistics managers across his sector can be listed as follows:

Unorganized workflow

A fragmented logistics workflow with siloed operations prevents FMCG businesses from meeting their set objectives. Process execution and management is challenging across multi-stakeholder units. These roadblocks might result in critical gaps, reducing shipper, transporters and customer satisfaction.

Lack of procurement strategies 

Vehicle procurement is a pivotal pillar in FMCG and choosing the right transporter drives a seamless shopping experience. A primitive procurement model with manual performance analysis does not meet accuracy standards and are prone to human discrepancies. Transporters often demand high freight rates for ad hoc freight requirements.

Low responsiveness

Time-bound nature of FMCG products requires optimum logistics responsiveness to overcome critical gaps that might delay the shipments. Inefficient forecasting and predictive analytics hinder supply chain strategies, hindering operational capacity to identify and address existing or potential threats to the supply chain.

In-transit discrepancies

Manual-driven in transit monitoring restricts stakeholders visibility into discrepancies and delays. No transparency across justified reasons for deviations might increase detention costs, delay deliveries, affect shipper-carrier relationships and reduce customer satisfaction in the long run. These roadblocks affect market share and profitability.

Non-strategic load allocation

Inefficient load distribution and indenting results might obstruct shipment efficiencies and increase cost incurrences to the company. In a traditional module, logistics managers often fail to understand the vehicle’s capacity, resulting in inefficient allocation. It leads to SOB deviations and increases costs in case of last minute cancellations.

Inefficient collaboration 

Traditional collaboration via prolonged phone calls, emails, WhatsApp, etc. curbs operational transparency across all process stages. FMCG logistics comprises a complex network of stakeholders who communicate and share data for a sleek execution. Absence of a holistic collaboration platform increases cycle time, human discrepancies and operational gaps.

FMCG Industries are benefiting through Digital Transformation in their Logistics operations. Find how

Mitigating roadblocks via digital roadmaps

Technological implementation across the FMCG supply chain is expected to enhance resilience, flexibility, speed, agility and sustainability. Leading businesses in this domain are adopting digital solutions to identify and address the pain points with growth-focused benefits like:

• Automation-driven process stages reduce time-consumption, human discrepancies and manual intervention
• 100% operational visibility enables insights into deviations, delays, process gaps and performance parameters 
• Data-driven procurement improves carrier selection strategies and freight saving dynamics
• GPS/ SIM-based tracking of in-transit shipments facilitate real-time monitoring,  quicker gap redressals and justified penalty clauses 
• Strategic indent allocation in compliance with distribution metrics, contract guidelines and Share of Business (SOB)
• One-window collaboration via real-time communication and EDIs improves operational transparency 

Optimizing FMCG logistics with SuperProcure

Companies in the FMCG sphere are aiming for strategic digital optimizations to cater to tight shipment deadlines, fluctuating inventory levels and traceability standards. SuperProcure’s SaaS TMS solutions empower the FMCG supply chain with holistic management, better ROI, strategic planning, centralized control, quicker escalation management and proactive decision making. It aligns data-driven insights with the optimization strategies, ensuring a resilient, agile and 100% audit compliant logistics module. 

Beyond the prevalent complexities, FMCG logistics upholds a promising future that shall contribute substantially to India’s economy. Collective approaches in digital-driven supply chain optimization shall mark its onset.

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Case study: How EY enhanced business resilience for a leading FMCG organization

EY helped one of South Asia’s leading FMCG organizations in their business transformation journey across their value chain.

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How do you drive your business transformation without the right engine?

The South Asian FMCG major needed to transform their operations to not only be future-ready but also create barriers of entry in the market.

One of South Asia’s leading FMCG organizations was anticipating stiff competition from multinational corporations on the back of a free trade agreement (FTA) for consumer goods in the market. Easy market access for competition in the future and deep pockets of the peer group to buy market share were primary concerns for the client. 

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Case study: How EY optimized the supply chain of a leading Indian MNC

EY helped a leading FMCG company optimize vendor costs, eliminate redundancies, and create sales & operations platform. Learn more about supply chain case study.

EY worked on a 15-month  transformation journey , using a three-step approach, i.e., optimizing and addressing procurement gaps, sustaining the change and building a credible differentiator that is future-ready. The business transformation was devised with the aim to unlock greater potential across the value chain, significantly improve EBITDA and most importantly, create barriers of entry in the market.

The key initiatives of the transformation journey included:

Procurement transformation

EY helped the organization transition from a traditional sourcing and price discovery model to a scientific sourcing and procurement model by building capability across key functions such as strategic sourcing, category management, supplier relationship management and total delivered cost optimization. The initiative also helped drive defined cost savings measures such as identifying cost effective suppliers, better supplier negotiations, among others.

Supply chain optimization

EY designed and implemented robust tools for production planning (to optimize finished goods inventory and  working capital ) and dispatch planning (for optimizing distributor inventory and reducing loss of sales).

Downstream transformation (route-to-market)

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• Optimizing cost of complexity by rationalizing portfolio

The better the world works

Positive impact on EBITDA margins with a stronger and wider distribution network

Addressing the gaps in the value chain, the organization is now ready to sustain the market disruption while increasing entry barriers for competition.

The client started to reap the benefits from the business transformation program within three months of implementation, in terms of positive EBITDA margins.

We were also able to consolidate the distributor base for greater efficiency and developed an empowered sales force through specialized trainings.

(Contributors include Nishit Bhatia, Karan Bhatia, Pratik Gandhi, Rahul Mukherjee, Guneet Singh and Niharika Mehta.)

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Why finding the true value of retail media is a tough nut to crack

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‘Retail media has changed completely’: The Mars Agency’s Katrina Smart on self-serve, off-site and what’s next

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Consumer Goods Case Studies

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Direct-to-consumer

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Unilever Implements Intelligent DPR for Ice Cream Business​

Unilever, Fortune 100 Global CPG Leveraged digital transformation and automation to significantly improve planner productivity, reducing manual tasks and freeing up valuable time for strategic planning. With Solvoyo, Unilever implemented an end-to-end planning process that integrates seamlessly with other supply chain functions, ensuring a holistic and integrated view of the supply chain.

Unilever Automates Demand Planning with Solvoyo

Unilever, Fortune 100 Global CPG Consolidated demand planning efforts into a single, centralized platform, eliminating silos and ensuring consistency across the organization. With Solvoyo Platform, Unilever gained real-time insights into demand trends, enabling faster and more informed decision-making.

Unilever Eliminates Silos with Production Planning & Scheduling

Unilever, Fortune 100 CPG Company streamlines automated production planning and decision automation with little to no human touch. Thanks to the partnership with Solvoyo, the company has eliminated gaps between planning and execution in its end-to-end supply chain.

End-to-End Autonomous Planning & Analytics

Unilever – Fortune 100 Global CPG Managing all their supply chain planning data on a single platform, they achieved real-time visibility & agility for faster decision-making

Top Growing Grocer A101 Soars with AWS Partner Solvoyo’s No Touch Planning

A101, Sixth Fastest Growing Retailer A101 partnered with Solvoyo to optimize inventory management and enhance revenue. Today, the company is largest grocer in Turkey and one of the fastest-growing retailers in the world, generating billions in annual revenue.

Digital Transformation for End-to-End Supply Chain Planning Automation

Studenac Market Grocery Chain Studenac Market, one of top national chains with the largest sales network in Croatia achieved automated planning with the Solvoyo Digital Platform.

Ambient Network Fulfillment & Transportation

Unilever – Fortune 100 Global CPG The Fortune 100 CPG company producing ambient products identified opportunities in its fulfillment & transportation network using the Solvoyo Platform.

Frozen Network Replenishment & Transportation

Unilever – Fortune 100 Global CPG The Fortune 100 frozen products CPG company partnered with Solvoyo to optimize its network replenishment and transportation of its products.

Last-mile Delivery Infrastructure and Tactics

Global Automotive Manufacturer The automative manufacturer used an analytics platform to optimize last-mile delivery infrastructure and tactics.

Automated Planning Platform for Omni-Channel Operations

Consumer Electronics Manufacturer The consumer electronics manufacturer used an analytics platform to automate planning platform to support omni-channel operations.

Digital Transformation for Shopify Vendor

Premium Leather Goods E-Tailer Bonaventura started their digital transformation of end-to-end Pre-Season Planning with Solvoyo. Bonaventura sells its premium products on 5 different sales channels, including Shopify, Amazon and Rakuten

Digital Transformation of Supply Chain Planning

Rapid Grocery Delivery Unicorn Gorillas use of Solvoyo’s platform simplifies and even automates many of the planning and execution steps required to successfully meet customer demand

E2E Supply Chain Planning

Istegelsin – Rapid Grocery Delivery Startup The startup achieved End-to-end integrated dark store replenishment and purchase order planning using Solvoyo’s platform

Network Optimization to Integrate Acquisition & Reduce Costs

Schneider – Global Energy Manufacturer The company’s objective was to enhance its Asia-Pasific market position

Global S&OP Reconciliation

P&G – Fortune 100 Global CPG The Global CPG company uses a single digital platform to maintain global demand, inventory and supply visibility

Digital Transformation for End-to-End Planning & Collaboration

Mid-Market CPG in North America The CPG company used our digital platform with end-to-end planning and analytics capabilities in order to increase its OTIF levels

Agility in Supply Chain Planning During COVID-19

A101 – 5th Fastest-Growing Retailer A101 made fast adjustments to demand changes, adapting safety stocks across 50 DCs, and increasing safety stocks in the stores

Demand-driven Replenishment, DC Purchasing

A101 – World’s 5th Fastest-Growing Retailer A101 achieved digital transformation of manual planning process through a single platform supporting collaboration and visibility

Strategic Network Design supporting fast expansion

A101 – 5th Fastest-Growing Retailer A101 improved planner productivity and quality of decision-making based on advanced analytics

Promotional Item Planning

A101 – 5th Fastest-Growing Retailer A101 achieved digital transformation of manual planning process through a single platform supporting collaboration and visibility

Strategic Network Design for Aftermarket Parts & Accessories

Global Automotive Manufacturer The automative manufacturer used an analytics platform to optimize the spares network using a Total Cost to Serve objective

Digital Transformation for Forecasting, Inventory Optimization and Procurement

Hepsiburada – E-Commerce Retailer Hepsiburada automated their approach to detect slow moving inventory and optimize price actions to meet budget targets

Demand Planning and Pricing Solutions for Category Management

Hepsiburada – E-Commerce Retailer Hepsiburada achieved automated forecasting and inventory optimization, supplementing historical sales data with web searches, click rates and conversion

Concurrent planning of inventory, fulfillment & transportation

Home Depot – Major Home Retailer Home Depot optimized Total Cost to Serve with explicit trade-offs among inventory, transportation and store operations

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DeFacto – Multinational Apparel Retailer DeFacto improved precision through millions of automated markdown recommendations meeting different business objectives

In-season Inventory Management

DeFacto – Multinational Apparel Retailer DeFacto reached a 100% automated initial allocation & replenishment processes’ accepting 90% of 150+ weekly recommendations

Pre-season Planning

DeFacto – Multinational Apparel Retailer End-to-end to digital transformation for integrated budget management and buy planning

Digital Transformation for Pre-Season Planning

Penti – Apparel Retailer Penti achieved end-to-end integration and digital transformation for pre-season planning

Penti – Apparel Retailer With smarter replenishment decisions, Penti balanced inventory across the chain enabled 25% revenue growth with only 2% increase in stock

Demand-Driven Replenishment & Purchasing

MOPAS – Grocery Retailer MOPAS automated their supply chain to minimize costs and maximize efficiency

Smarter S&OP

Duzey – Wholesale Distributor Demand driven replenishment planning with sales forecast collaboration and automated safety stock calculation

Redefining E-Commerce Transportation Practices

Newgistics Solvoyo provided a robust analytical decision support capability to address Newgistics’ operational’ tactical and strategic decision making processes

Concurrent Optimization of Fulfillment & Transportation

Vestel – Consumer Electronics Manufacturer Vestel automated the transportation mode, vehicle, its route and constructing as a holistic plan to minimize transport costs

Autonomous Demand-Driven Replenishment & Procurement Planning

Sok – Hard Discount Retailer SOK implemented an automated replenishment planning system on the cloud.

Service Parts Network Optimization to Reduce Costs

Applied Materials Applied Materials has realized in excess of $10 million of annual savings while achieving the target response times specified in their multi-tier service level agreements

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Digital Transformation Case Studies: 3 Successful Brand Examples

Learn how three companies—Walmart, Ford, and Anheuser-Busch InBev—successfully transformed their business through digital initiatives to improve the customer experience.

Originally published on March 30, 2022

3 digital transformation case studies

Overcoming common digital transformation challenges, tips for building a digital transformation strategy, always focus on your customers.

Digital transformation is a process in which a company invests in new digital products and services to position it for growth and competition. A successful digital transformation improves the customer experience and enhances the way a company operates behind the scenes.

During a digital transformation, your business deploys new products and technologies and develops new ways to connect with your customers. Once the investment in digital begins, your business can use feedback and data to identify growth opportunities.

The three case studies below—from Ford, Walmart, and Anheuser-Busch InBev (AB InBev)—show how legendary companies went beyond simply creating an app and truly re-thought how digital transformation efforts supported sustainable growth for the business.

• A digital transformation is a major business transformation that employs technology to meet business goals and fundamentally change how companies operate.
• A digital transformation drives new products and services that improve the customer experience.
• A digital transformation gives you more informative behavioral data and more touchpoints with the customer.
• AB InBev, Walmart, and Ford invested in digital technology to accelerate internal processes and develop new digital products, which gave them valuable data on the customer experience and influenced future business investments.

Here are three examples of digital transformation. These leading companies carefully considered how new technology could generate data that made internal processes more efficient and produced insights about how to grow customer value.

Brewing company AB InBev underwent a digital transformation while compiling its network of independent breweries into a unified powerhouse . One of the team’s priorities was moving all their data to the cloud . By doing so, AB InBev enabled all employees to quickly and easily pull global insights and use them to make data-backed decisions.

For example, more accurate demand forecasting means AB InBev teams can match supply with demand, which is essential for such a large company with a complex supply chain. Access to big data from all the breweries means employees can experiment faster and roll out changes that improve business processes.

Gathering more data and opening up that data to internal teams was just the first step of the process, though. AB InBev capitalized on its digital investments by launching an e-commerce marketplace called BEES for its SMB customers—the “mom-and-pop shops”—to order products from. With the BEES platform, AB InBev found that their small and medium-sized businesses browsed the store on the mobile app and added items to their cart throughout the day. However, they only made the final purchases later in the evening.

Based on this behavioral data, the BEES team started sending push notifications after 6:00 p.m. recommending relevant products, which led to increased sales and greater customer satisfaction. Through these efforts, BEES gained over 1.8 million monthly active users and captured over $7.5B in Gross Merchandise Volume.

By closely monitoring metrics such as user engagement and purchasing patterns on the BEES platform, AB InBev has made a big impact with its marketing strategies and improved customer retention.

Jason Lambert, SVP of product at BEES, credits their success with the hard data that told them how their customers behaved and what they needed: “It turned out to be a thousand times better than any of our previous strategies or assumptions.” BEES used behavioral analytics to respond quickly, changing the buying experience to match the needs and habits of their retailers.

As a traditional brick-and-mortar retailer, Walmart began a digital transformation by opening an online marketplace. However, digital transformation is an ongoing process—it doesn’t end at the first website. A digital transformation means companies refocus their operations around digital technology. This usually happens both internally and in a customer-facing way.

To drive more customer value through digital touchpoints, Walmart set up mobile apps and a website to enable customers to purchase goods online. After analyzing customer behavioral information from its app, Walmart added more services such as same-day pickup, mobile ordering, and “buy now, pay later.”

These changes were made to meet customer expectations and improve the customer experience. Walmart’s introduction of a seamless online shopping experience represents a pivotal step in digital innovation, setting new standards for retail convenience and efficiency.

In 2024, Walmart announced an AI-powered logistics product called Route Optimization. This product uses AI to find the most straightforward driving routes, pack trailers efficiently, and reduce miles traveled. In addition to using this product internally, Walmart plans to offer it to other businesses that need to employ more efficient supply chain and logistic processes.

Aside from improving customer experience and logistics, Walmart’s head of mobile marketing , Sherry Thomas-Zon, also notes the importance of data—and access to data—in digital transformations. “Our marketing and product teams are always looking at numbers,” Thomas-Zon said. “It keeps our teams agile despite our size and the increasing amount of data we collect and analyze.”

Ford has embraced several digital transformation initiatives, including using technology to transform and improve manufacturing at one of its biggest automotive factories.

Not having the correct parts available holds up workers and slows down the production process. Ford introduced a material flow wireless parts system so they could track the quantities of different parts and make sure there were enough available. Ford’s use of automation has significantly improved its inventory management process by reducing manual tasks and enhancing worker efficiency.

In 2016, Ford also introduced a digital product for its customers: the FordPass app . It enables Ford owners to control their vehicles remotely. For example, drivers can check their battery or fuel levels and lock or unlock their cars from their phones.

In 2024, Ford took its digital transformation even further when it launched the Ford and Lincoln Digital Experience . Key features include personalized vehicle settings, real-time traffic updates, and seamless integration with smart home devices. The platform also provides advanced navigation, remote control of vehicle functions via the FordPass app, and in-depth vehicle health monitoring.

To capitalize on these digital touchpoints, Ford uses data from its app to improve user experiences . With the ability to capture and analyze data in real-time, Ford’s leadership can now make quicker, more informed decisions that directly enhance operational efficiency and customer satisfaction.

Ford’s success is grounded in the same process as Walmart and AB InBev. They used their digital transformation to gather detailed information about how customers interact with their products. Then, they made data-driven decisions to provide more value.

It’s not called a transformation for no reason. You’re changing the way your business operates, which is no easy feat. Planning and effective change management strategies are key to overcoming digital transformation challenges.

Create a digital transformation strategy roadmap that outlines your integration strategy and details how this will affect your teams, processes, and workflows. Once you’ve created your plan, share it with the entire company so everyone can use it as a single reference point. Use a project management tool that enables team members to get a big-picture overview and see granular details like the tasks they’re responsible for.

It takes time for teams to onboard and move away from what was successful under the previous system, for example, shifting from heavyweight to lightweight project planning. Make sure you factor some breathing space into your roadmap—giving everyone a chance to get used to the new way of operating.

As part of a digital transformation, you’ll want your team to develop new skills as well. Upskill your team by incorporating digital skills into your employee development plans . Provide people with opportunities to learn and then track their progress. Promote platforms like LinkedIn Learning to help your teams understand the nuances of digital transformation and boost their skills.

If you believe there’s an end-state to digital transformation, more challenges will arise. New technology and consumer behaviors are always emerging, meaning digital transformation is ongoing. It’s not something you’ll complete in a week. Rather, it’s a continuous state of experimentation and improvement.

At Amplitude, we refer to this process as digital optimization . If digital transformation brings new products, services, and business models to the fold, then digital optimization is about improving these outputs. Both digital transformation and digital optimization are important—digital transformation signals the start of new investments, and digital optimization compounds them.

Examine how each part of the transformation will affect your customers and your employees. Then, you can be intentional and introduce initiatives that positively impact your business.

Diagnose what you want from a digital transformation first

There are different ways of approaching a digital transformation. Some companies prefer to implement an all-inclusive digital strategy, transforming all parts of their organization at the same time. Others opt for a less risky incremental strategy. Every company is different. To choose the best approach, examine your whole organization and analyze where digital systems could help.

Consider your business goals. Investigate how a digital transformation could impact the customer experience. What new products could you provide? How could you improve your services? For example, you might use artificial intelligence to create a chatbot that reduces customer service wait times—or purchase software that does the same.

You’ll also want to review your business processes. How could a digital transformation speed up your current workflows, improve your operations, or enable more collaboration between teams? Asking these questions lets you challenge the way you operate and will help you identify problems in your organization that you might not have noticed before. For example, perhaps your deliveries are often delayed, and you could make delivery smoother by digitizing elements of your supply chain .

Get cross-team involvement

Though different teams may work separately, your customers are affected by each department. Collaboration elevates everyone’s work because it means people can make informed decisions.

Make sure you get input from all of the right stakeholders when you create your digital transformation strategy. Ask:

• What processes hold you up?
• Where are the bottlenecks?
• What data would be useful for you?

Enable everyone to access the data they need without input from anyone else. Help your employees improve their data literacy . Start by training all your employees to use your organization’s data tools and software. To help everyone in your organization access and analyze data, adopt easy-to-use self-service tools (e.g., an analytics tool and a CRM). Then, lead by example. Provide inspiration by using data storytelling in your presentations to explain the decisions you make.

Encourage collaboration between teams by creating shared resources so they have spaces to present insights and submit suggestions. This could be as simple as creating a Google Doc for brainstorming that multiple teams can access or sharing charts directly within your analytics solution, like with Amplitude Notebooks . Then, you can start to experiment and make improvements to the digital customer experience like Walmart, Ford, and AB InBev did.

Once your digital transformation is moving, a digital optimization strategy is an opportunity to generate growth. Your digital transformation initiatives will continue in parallel, and the process will become a feedback loop:

• Deploy new digital systems and products.
• Analyze the data that comes forth from these investments. Use it to draw insights about your customers or processes.
• Make decisions based on the data and make changes.

Keep customer needs at the heart of your work. Let them guide you as you undergo digital transformation. As you gather more data about how your customers interact with your new digital products, use it to make the experience even better for them. This will lead to more trust and loyalty and, ultimately, more recurring revenue.

To continue your learning about digital transformation and optimization, join an Amplitude workshop or webinar or read our Guide to Digital Optimization .

• MIT Sloan. How to build data literacy in your company
• Ernst & Young. How global supply chain strategy is changing and what comes next
• Datanami. From Big Beer to Big Data: Inside AB InBev’s Digital Transformation
• Predictable Profits. How Ford Embraced Digital Transformation
• APMG International. Heavyweight vs Lightweight Management

About the Author

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The guide to data accessibility, what is a product roadmap a definitive guide, new amplitude + snowflake integration delivers the modern data stack, digital optimization vs. digital transformation explained, 6 essential digital optimization skills you need, what is martech full guide and how to build your stack, recurring revenue 101: mrr vs. arr.

Navigating Digital Transformation: A Risk-Based Approach for Industry 4.0 Innovation

• Published: 21 August 2024

Cite this article

This study addresses the critical gap in understanding the risks associated with digital transformation, particularly focusing on their impact on business innovation and growth within Industry 4.0. While the transformative potential of digital technologies is well-documented, the inherent challenges remain underexplored. This research introduces an innovative decision-support model designed to evaluate and prioritize risks unique to digital transformation in the industrial sector. Utilizing Pythagorean fuzzy sets (PFSs) and multicriteria decision-making (MCDM) techniques, the model systematically assesses and ranks risks to enhance informed decision-making processes. An extensive case study reveals that key risks include a lack of commitment from top management and unstable market environments, which significantly jeopardize the digital transformation journey. The study’s findings underscore the importance of a strategic approach in mitigating these risks, facilitating a smoother transition to the digital economy. The proposed model offers actionable insights for organizations to optimize their digital transformation strategies by integrating advanced analytics and machine learning. This research contributes to the knowledge economy by providing a robust framework for managing the complexities of digital transformation, promoting sustainable innovation, and enhancing overall business performance. The study’s strengths are further reinforced through sensitivity and comparison analyses, highlighting the resilience and practical applicability of the decision-support model. These insights are invaluable for policymakers, industry leaders, and scholars focused on leveraging technology to drive economic growth and societal progress in the era of Industry 4.0.

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Li, Z. Navigating Digital Transformation: A Risk-Based Approach for Industry 4.0 Innovation. J Knowl Econ (2024). https://doi.org/10.1007/s13132-024-02264-6

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5 Digital Transformation in Hotels Case Studies [2024]

In the rapidly evolving hospitality industry, digital transformation has become a pivotal strategy for hotels striving to enhance guest experiences and optimize operational efficacy. The following five case studies illustrate how diverse hotel chains—from luxury resorts to eco-friendly retreats—have successfully implemented digital technologies to meet the unique demands of their clientele and setting. Each case study thoroughly examines the objectives, challenges, solutions, and outcomes associated with their specific digital initiatives. These examples showcase how hotels use technology to redefine hospitality, improve sustainability, and stay competitive in a digitally-driven market.

Related: Digital Transformation Case Studies

Case Study 1: Digital Transformation at LuxStay Hotels

In an era where digital innovation is supreme, LuxStay Hotels recognized the transformative power of technology to redefine the hospitality landscape. Operating a chain of high-end hotels globally, LuxStay was challenged by evolving consumer expectations and the need for operational agility. Determined to enhance its competitive edge, LuxStay embarked on a strategic digital transformation to revolutionize guest experiences and operational processes.

The primary goal of LuxStay Hotels was to enhance guest experiences by leveraging digital technology to offer more personalized services and streamline guest interactions. Another critical objective was to increase operational efficiency across all hotel operations, reducing costs and improving service delivery through automation. Additionally, LuxStay aimed to utilize better-collected guest data to refine their marketing strategies and service offerings, ensuring each guest felt uniquely valued and satisfied.

• Legacy Systems:  Outdated IT infrastructure that was not integrated, leading to inefficiencies and data silos.
• Customer Expectations:  Increasing demand for digital services such as mobile check-in/out, room customization via apps, and contactless interactions.
• Staff Adaptability:  Resistance from staff accustomed to traditional methods and processes.

Solutions Implemented

• Integrated Property Management System (PMS):  LuxStay implemented a new PMS that integrated all hotel functions—front desk, housekeeping, reservations, and billing—into a single platform to streamline operations and improve data flow.
• Mobile Application Development:  Developed a comprehensive mobile app that allowed guests to manage their entire stay—from booking to checkout, including room customization options like temperature control, lighting, and entertainment systems.
• Data Analytics Platform:  Deployed a data analytics platform to harness customer data for personalized marketing and to enhance guest experiences based on previous preferences and feedback.
• Staff Training Programs:  Comprehensive training programs were introduced to help staff adapt to new technologies and to foster a culture of innovation and constant improvement.
• Increased Guest Satisfaction:  Guest satisfaction scores increased by 25% due to improved personalization and faster service delivery.
• Operational Efficiency:  Reduced manual processes by 40%, leading to cost savings and quicker response times to guest needs.
• Revenue Growth:  Saw a 15% increase in revenue through upselling personalized services and promotions based on guest preferences and historical data.

Looking Ahead

As LuxStay looks toward the future, its strategy focuses on harnessing emerging technologies such as AI and the Internet of Things (IoT) to customize guest experiences further and optimize operational efficiency. Plans include deploying AI-driven chatbots for real-time customer service and implementing IoT for intelligent energy management and predictive maintenance within properties. By staying at the forefront of technological adoption, LuxStay aims not only to meet but exceed the evolving expectations of modern travelers, ensuring a seamless and memorable hospitality experience.

Future Directions

In the next phase of its digital transformation, LuxStay is exploring innovative sustainability practices, aiming to integrate renewable energy sources and smart building technologies into its hotels. This initiative is expected to reduce the chain’s carbon footprint and attract eco-conscious guests. Exploring biometric technology for enhanced security and customer convenience is also on the roadmap as LuxStay redefines luxury hospitality through technology.

This case study showcases LuxStay Hotels as a leader in digital innovation within the hospitality industry, setting benchmarks for others to follow in creating a smarter, more connected guest experience.

Case Study 2: Digonetal Overhaul at Coastal Retreat Resorts

Facing a rapidly evolving hospitality sector driven by digital advancements, Coastal Retreat Resorts, a boutique hotel chain located primarily in coastal regions, recognized the need to modernize its operations and guest services to maintain competitiveness. The chain embarked on a digital transformation initiative to harness cutting-edge technologies to revolutionize the guest experience and optimize operational effectiveness.

Coastal Retreat Resorts aimed to fundamentally enhance the guest experience by introducing digital solutions that offer unparalleled convenience and personalization. The chain sought to improve operational efficiency by automating routine tasks and integrating systems across properties to streamline management processes. Additionally, advanced data analytics was targeted to deepen understanding of guest preferences and effectively tailor marketing efforts.

• Scattered Property Management:  Coastal properties operated semi-independently with diverse systems, creating inefficiencies and complicating central oversight.
• Seasonal Fluctuations:  High variability in guest influx due to the seasonal nature of coastal tourism requires flexible and scalable digital solutions.
• Digital Adoption:  The existing workforce was predominantly accustomed to non-digital processes, posing a significant hurdle in adopting new technologies.
• Cloud-Based Management System:  Implemented a unified, cloud-based property management system across all locations to centralize data and operations, enhancing real-time decision-making capabilities.
• Dynamic Pricing Tools:  Integrated dynamic pricing software that adjusts room rates in real time based on market demand, weather conditions, and local events, maximizing revenue, particularly during peak seasons.
• Guest Engagement Platform:  Introduced an interactive platform enabling guests to engage with the hotel’s amenities digitally, from booking spa appointments to ordering room service via their devices.
• Employee Upskilling Initiatives:  Launched extensive training programs to upskill employees, focusing on digital literacy and customer service in the digital context.
• Streamlined Operations:  Achieved a 30% improvement in operational efficiency through automation and better resource management.
• Enhanced Guest Engagement:  Recorded a 50% increase in guest engagement with on-site amenities and services, driven by the ease of digital access.
• Revenue Optimization:  Saw a 20% increase in revenue through better room rate management and higher guest spending on amenities.

Coastal Retreat Resorts is now exploring integrating virtual reality (VR) experiences to offer virtual tours of the locality and augmented reality (AR) for immersive in-room entertainment options. This initiative aims to blend physical and digital experiences, enhancing the unique coastal charm with digital innovation.

The next strategic move includes adopting sustainable technologies such as solar-powered systems and smart water management to align with global environmental conservation trends and appeal to eco-friendly tourists. Coastal Retreat Resorts plans to explore partnerships with tech firms to co-develop bespoke hospitality solutions that could set new industry standards for guest-centric technology.

This case study demonstrates Coastal Retreat Resorts’ commitment to embracing digital transformation to deliver superior guest experiences and operational excellence, positioning them as a forward-thinking leader in boutique hospitality.

Case Study 3: Digital Innovation at City Center Business Hotels

City Center Business Hotels, a chain specializing in accommodations for business travelers in major urban areas, faced the challenge of adapting to the digital expectations of its professional clientele. The hotel chain initiated a comprehensive digital transformation focused on smart technology integrations and enhanced business services to stay competitive in a market where efficiency and connectivity are paramount.

The key objective for City Center Business Hotels was to streamline the business travel experience through technological enhancements that offer speed, efficiency, and connectivity. The chain aimed to optimize operational processes to reduce wait times and improve service responsiveness. Another critical goal was to employ data-driven strategies to customize services for business travelers, enhancing guest loyalty and satisfaction.

• High Expectations for Connectivity:  Business travelers demand high-speed internet and seamless digital connectivity for meetings and work-related tasks.
• Efficiency in Services:  The need for quick and efficient services, from check-in to conference facilities, is higher among business travelers than leisure guests.
• Integration of Business Amenities:  Integrating advanced business amenities with traditional hotel services to create a cohesive experience posed a significant challenge.
• High-Speed Connectivity Upgrades:  Upgraded the entire network infrastructure to provide high-speed, reliable Wi-Fi access throughout the hotels, including enhanced digital conferencing capabilities in meeting rooms.
• Automated Check-In/Out Kiosks:  Installed automated kiosks to expedite the check-in and check-out processes, reducing wait times and allowing guests more control over their stay.
• Smart Room Technology:  Implemented smart room technology that enables guests to control room settings such as lighting, temperature, and entertainment systems through a mobile app or voice commands.
• Business Analytics Suite:  Deployed a business analytics suite to gather and analyze guest data, enabling personalized service offerings and targeted marketing campaigns to meet the specific needs of business travelers.
• Reduced Service Times:  Achieved a 35% reduction in check-in and check-out times, significantly enhancing guest satisfaction.
• Increased Connectivity Satisfaction:  Guest feedback on connectivity and business amenities showed a 90% satisfaction rate, highlighting successful upgrades and integrations.
• Personalization Success:  Personalized marketing and service adjustments led to a 25% increase in repeat business customers.

City Center Business Hotels is exploring further advancements in AI-driven customer service solutions, including AI concierges and automated problem-resolution systems, to provide even more efficient and personalized services to business travelers.

Looking forward, City Center Business Hotels plans to integrate IoT devices to further enhance the guest experience, such as smart mirrors displaying news and weather updates and IoT-enabled coffee makers that remember guest preferences. The chain is also considering implementing blockchain technology to streamline payment processes and enhance security for business transactions.

This case study highlights City Center Business Hotels’ dedication to leveraging digital technology to meet modern business travelers’ high standards and dynamic needs, ensuring their position as a leader in the business hospitality sector.

Related: Digital Transformation in Finance Case Studies

Case Study 4: Technological Revamp at Heritage Grand Resorts

Heritage Grand Resorts, known for their luxury accommodations in historically significant properties, recognized the need to balance their rich heritage with modern technological demands. To attract a broader demographic and enhance the guest experience while preserving the aesthetic integrity of their properties, Heritage Grand embarked on a digital transformation project.

Heritage Grand Resorts aimed to seamlessly integrate cutting-edge technology without disrupting the historical ambiance of their locations. The objective was to enhance guest convenience and provide modern amenities while maintaining the charm and elegance of their heritage settings. They also focused on utilizing technology to improve operational efficiencies and provide enriched data insights for better guest management.

• Preservation of Aesthetics:  Integrating modern technology in a way that does not detract from or damage the historical significance of the properties.
• Technological Integration:  Implementing state-of-the-art technology in structures not originally designed to support them.
• Guest Diversity:  Catering to tech-savvy guests and those who prefer a more traditional, disconnected experience.
• Invisible Tech Solutions:  Installed ‘invisible’ technology such as underfloor heating, Wi-Fi boosters hidden within decor, and noise-canceling panels disguised as artwork to maintain the historical look and feel.
• Augmented Reality Tours:  Developed an augmented reality app that guests can use to learn about the history of the resort and its surroundings during their stay, enhancing the educational value of the visit.
• Smart Concierge Services:  Introduced AI-powered smart concierge services accessible via smartphones, providing guests with information, reservations, and personalized recommendations without physical interaction.
• Energy Management Systems:  Implemented advanced energy management systems to monitor and control energy use in real time, improving sustainability while reducing operational costs.
• Enhanced Guest Experience:  Guests reported a 40% increase in satisfaction due to the convenience of modern amenities blended seamlessly with the historical environment.
• Increased Operational Efficiency:  Reduced energy costs by 20% and improved staff efficiency by introducing smart systems.
• Educational Engagement:  The augmented reality tours led to a 30% increase in guest engagement with the property’s historical aspects.

Heritage Grand Resorts is considering further enhancements, such as biometric access controls for rooms and personalized environment settings that adjust based on guest preferences learned throughout their stay.

Plans include expanding VR (Virtual Reality) to offer potential guests virtual visits before booking and integrating more AI elements into everyday guest interactions. The resort also aims to explore deeper data analytics to predict guest preferences and create even more customized experiences.

This case study demonstrates Heritage Grand Resorts’ commitment to innovation, showing how technology can be harnessed to enhance traditional experiences, ensuring that these historical properties remain relevant and appealing in the modern age.

Case Study 5: Digital Evolution at Eco Escapes Resorts

Eco Escapes Resorts, a chain specializing in eco-friendly accommodations in remote and pristine environments, faced the dual challenge of enhancing guest experiences while adhering to strict environmental conservation standards. To address these challenges, Eco Escapes embarked on a digital transformation to implement sustainable technologies and digital services that align with their commitment to environmental stewardship.

Eco Escapes Resorts aimed to enhance the sustainability of their operations using digital solutions that minimize environmental impact. The key goals included improving energy efficiency, reducing waste, and providing guests with a digital interface that enhances their stay without compromising the natural setting. Additionally, the resort sought to leverage technology to educate guests on sustainability practices and the local ecosystem.

• Environmental Compliance:  Implementing technology solutions that meet rigorous environmental standards and cause minimal disruption to natural habitats.
• Remote Location Connectivity:  Ensuring reliable digital connectivity and technology deployment in remote areas with limited infrastructure.
• Balancing Tech with Nature:  Offering modern conveniences that guests expect while preserving the natural and unspoiled experience that is the hallmark of Eco Escapes.
• Solar-Powered Wi-Fi:  Deployed solar-powered Wi-Fi systems across properties to ensure connectivity that does not rely on conventional power sources.
• Digital Educational Platforms:  Introduced an interactive digital platform accessible via mobile devices that provides guests with information about local wildlife, flora, and sustainability efforts through engaging multimedia content.
• Smart Energy Systems:  Implemented IoT-based smart energy systems to monitor and manage energy consumption more efficiently, significantly reducing the resort’s carbon footprint.
• Waste Reduction Apps:  Developed an app that helps manage waste by educating guests on recycling protocols and monitoring their waste disposal habits, promoting a zero-waste lifestyle during their stay.
• Increased Sustainability:  Achieved a 30% reduction in overall energy consumption and a 25% reduction in waste production.
• Enhanced Guest Education and Engagement:  The digital educational platforms saw a 50% usage rate among guests, increasing awareness and participation in conservation efforts.
• Improved Guest Satisfaction:  Guest satisfaction improved by 35% due to the seamless integration of eco-friendly technologies that enhanced their stay without detracting from the natural experience.

Eco Escapes Resorts plans to explore further emerging technologies, such as biodegradable drones for ecological monitoring and guest tours, enhancing the educational aspect of their offerings without impacting wildlife or the environment.

Looking to the future, Eco Escapes is investigating the potential for blockchain technology to develop a transparent supply chain for all goods and services used at the resorts, ensuring sustainability from source to guest. They are also planning to expand their use of VR to offer virtual wildlife tours, allowing guests to experience sensitive habitats without causing disturbance.

This case study highlights Eco Escapes Resorts’ innovative approach to combining technology with environmental conservation, setting a benchmark for sustainable tourism in the hospitality industry.

Related: Digital Transformation in Aviation Case Studies

The case studies of LuxStay Hotels, Coastal Retreat Resorts, City Center Business Hotels, Heritage Grand Resorts, and Eco Escapes Resorts collectively demonstrate the transformative power of digital technology in the hospitality industry. These narratives highlight how strategic digital implementations can significantly enhance guest satisfaction, increase operational efficiencies, and maintain competitive advantage. The successes documented in these case studies serve as valuable blueprints for other hotels looking to embark on their digital transformation journeys. By embracing technological advancements, these hotels not only meet the modern demands of their guests but also set new standards for innovation in hospitality, paving the way for future developments in this dynamic industry.

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How to integrate AI in Digital Transformation [10 ways] [2024]

Discover how we drove digital transformation with Strategy & Advisory, AI, Data & Analytics, and Cloud in these success stories.

Scaled e-ticketing platform to handle peak traffic volumes and deliver a seamless user experience with cloud infrastructure.

Migrated and modernized critical applications to AWS, enabling efficient collaboration, expediting project delivery, and supporting India's Hydrocarbon Vision 2030.

Streamlined manufacturing operations and improved supply chain visibility with a cloud-based solution.

Leveraged Minfy's expertise to migrate critical financial applications to the cloud, ensuring security, compliance, and scalability.

Enhanced logistics network management and operational efficiency through cloud-based solutions.

Enhanced citizen service delivery and government efficiency through IT infrastructure modernization

Modernized IT infrastructure and built new applications on AWS to support business growth and agility.

Optimized HR technology platform on AWS, enabling scalability and agility to support rapid business growth.

Pioneered blockchain technology for public service delivery in West Bengal, fostering transparency and trust.

Modernized marketing automation platform on AWS and achieved faster time-to-market with enhanced scalability and agility.

Streamlined visa outsourcing processes and improved operational performance with a robust database infrastructure on AWS.

Orchestrated a seamless cloud migration to improve operational efficiency and security for the maritime leader.

Ready to embark on your digital transformation journey? Contact Minfy today to discuss your unique needs and explore how we can help you achieve your goals.