This blog is sponsored by SAP
In today’s highly volatile consumer products (CP) landscape, companies face the central challenge of achieving profitable growth while also combating challenges such as tight consumer budgets and the pressure on margins from high commodity costs. Global supply chains are vulnerable to daily disruptions, attributed to shifts in geopolitics, regulatory environments and economic stability. For brands to adapt, they have to prioritize three key areas:
- Agility: To capitalize on market dislocations
- Resilience: To withstand unexpected challenges
- Innovation: To continuously reinvent outdated business models
To maximize profitability, build customer loyalty, minimize costs and gain buyer insights, companies must adopt the right technology.
Innovation redefined
Innovation isn’t just about making new things; it’s also about staying agile and responsive. CP companies need to evaluate their current products and services in order of importance and determine how they align with what customers want. To be successful, brands must understand how the market operates and how to develop products and services tailored to specific groups of people.
“Achieving strategic development,” as noted by Shady Ghattas, SAP’s global vice president and head of the consumer products business unit, depends on a readily accessible data foundation. This foundation is essential for generating actionable insights and effective AI integration, which further accelerates innovation and delivers operational efficiencies.”
Building on those insights, brands that focus on wellness and sustainability can foster consumer trust and loyalty by reformulating products, reducing waste, improving ethical sourcing and utilizing technology to optimize resource consumption and provide transparency in sustainable production beyond compliance.
Mastering channel-less commerce
The rise of channel-less commerce, particularly through new marketplaces and social media purchases, has made it easier for brands to reach a broader customer base. Physical stores still play a vital role, so it is important for brands to have a unified data model that supports the entire customer journey, whether it begins online or in person. To modernize commerce and achieve profitability, brands must prioritize the message over the medium, ensuring connected, insightful and adaptive consumer experiences for memorable interactions.
An integrated SAP platform can help brands manage omnichannel shopping experiences without compromising in-store performance. Leveraging connected, intelligent business processes and accurate, real-time data, CP companies can monitor and adapt to shifting consumer preferences. This integration also helps break down internal organizational silos, unifying data across the entire value chain, starting from supply chain logistics and manufacturing to marketing and sales, achieving a holistic view of the market.
Instant access to real-time data enables CP companies to proactively identify purchasing patterns, trends or supply chain issues. Brands can adjust production, refine their products, optimize inventory and tailor their marketing efforts to enhance the customer experience.
How AI is disrupting marketing and spending
For companies prioritizing brand value, AI is redefining marketing investment. SAP Revenue Growth Management and SAP Business AI are key to this evolution. By leveraging insights from current and historical plans, baseline forecasts, sales transactions and market data, brands can develop informed growth strategies and sales tactics.
Brands can maximize ROI from promotional investments, leading to a reduction of unplanned spending by up to 90%. Hyper-personalized marketing enables brands to target every dollar effectively, resulting in a 25% increase in personalized purchases.
How AI is helping companies innovate:
- Predictive demand and inventory management
- Hyper-personalized marketing
- Sustainability optimization
- Autonomous decision making and agentic AI
- Product development and testing
“AI adds the most value when it is part of a business process to drive the outcomes intended vs. a stand-alone tool,” said Ghattas, “Even AI has limitations, like any technology, the intellectual insights and skills of an organization’s people further enhance its impact.
Achieving profitable agility
To win over and retain customers, companies need to do more than just rely on AI for all the answers. Technology needs to be integrated into all apps and data to enable informed decision-making.
Brands interested in initiating their digital transformation should first prioritize data quality and master data governance. A great place to start is by examining the master data’s life cycle, from initiation to flow and the product’s journey, which begins with billing, procurement and receiving and concludes with customer consumption. SAP advises clients to first focus on this life cycle as an initial path to success for projects, which in turn feeds the models and analysis that drive effective transformation and sustainable growth.
SAP solutions, enhanced by SAP Business AI, enable consumer products companies to compete and meet customer needs. With AI-powered agents, brands can gain an edge in efficiency, innovation, and customer loyalty. Download the full white paper, or speak with a consumer products solutions expert from SAP.
For more insights, view our on-demand webinar, Sustaining Revenue Growth, How Do Consumer Products Companies Continually Innovate to Stay Ahead?