IDC Study: Industry Trends and Why a Demand-Driven Organization is Critical

Alloy recently commissioned IDC for a Market Spotlight on the future direction of consumer goods companies, which you can read here. In the paper, IDC analyst and program vice president Simon Ellis explores how the industry has become consumer-driven, necessitating a transformation in how brands approach their sales and supply chain strategies.

Without a digital transformation, companies risk being disrupted by new competitors and ultimately becoming irrelevant; however, brands that embrace new forms of data and analytics will find that they can more agilely respond to consumer demand and achieve success.

We encourage you to read the full study if you’re interested in the details of Simon’s analysis. In this post, we’ll provide an overview of some of his key points.

Consumers are in control

At the heart of this industry evolution is the focus on the end-consumer, who holds high expectations for product personalization and elevated shopping experiences. The modern consumer now has access to many channels for purchasing products, and it becomes a business priority to ensure their demands are being met when and where they want to buy — otherwise, they’ll turn elsewhere, and there are many data-savvy, new brands ready to meet their needs. Thus, the supply chain becomes a “critical competitive weapon,” according to the report. With the right digital transformation, the supply chain becomes a powerful tool to aid businesses in their quest to meet consumer demand and support new approaches for growth.

Supply chain as opportunity

Historically, the supply chain has been considered a “cost center,” with a constant focus on cost reduction. However, by becoming demand-driven, the supply chain is now poised to become an opportunity center instead, meaningfully driving top-line growth. The foundation of this shift is data: by collecting and analyzing the numerous downstream data points now available to them, brands can better anticipate, plan for, and respond to consumer demand.

The benefits of this data-driven approach extend to other business areas as well — for instance, sales teams can more quickly gauge consumer reaction to new product launches, allowing them to make adjustments in strategy as needed.

Connecting relevant stakeholders

Digital transformation will help better connect supply chain, sales, and operations teams so that each team can work from a common data source of truth and make decisions that everyone is aligned on. Shared analytics enable brands to break down data silos and harmonize the various data points, which allows decision-makers to frame a more complete picture of consumer demand and how the company is positioned to meet it. The IDC Market Spotlight predicts that the companies who will be most successful in the future are those that can quickly turn data into actionable insights — for this reason, having a standardized and unified system will be critical.

Factors affecting digital transformation

According to IDC, transformation of the supply chain is acknowledged as a top priority by 90% of manufacturers and retailers. Yet digitization is not an incremental upgrade, which can make it an intimidating undertaking for some brands. Supply chain transformation must be implemented as an enterprise-wide initiative in order to be successful, which means that brands must explore the nuances of their existing operations and reimagine certain business processes. IDC recommends finding and focusing on compelling use cases that drive clear and distinct value as a starting point.

It’s also not necessary to tackle this challenge alone: brands can turn to experts in the field, such as Alloy, to facilitate this transformation in a fast and easy way. Read more in the IDC Market Spotlight on the shift consumer good companies are undergoing to become more demand-driven and data-centric for long-term success.