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Consumer Goods and the Great B2B Digital Acceleration

What 500 consumer goods leaders have to say about digital transformation in the B2B route to market.

When the world came to a halt in 2020, a massive wave of digital adoption allowed consumer goods (CG) companies to merchandise and sell products directly to consumers as they flocked online to purchase the essential goods they needed. But digital adoption in the consumer goods industry didn’t just impact the business-to-consumer (B2C) space — it also affected the vast business-to-business (B2B) ecosystem of manufacturers, distributors, and wholesalers that work together to get essential goods to your local storefronts.

Organisations acted quickly to adapt to these new market conditions. In our survey, nearly all (99%) CG companies accelerated digital transformation in their B2B route to market.

99% of CG companies accelerated digital transformation in the B2B route to market.

Our global survey received 500 responses from CG leaders, and reveals findings on:

Digital acceleration drives industry-wide B2B maturity
Digital investments streamline account management
Retail and field execution goes virtual
Investments in B2B digital commerce heat up

While there are many ways that CG companies get products to end consumers, this report focuses specifically on the B2B processes and activities that enable CG companies to sell and distribute products to partners and distributors, including:

Key Account Management
Retail and Field Execution
B2B Digital Commerce

Table of Contents

Chapter 1: Digital acceleration drives industry-wide B2B maturity

Chapter 2: Digital investments streamline account management

Chapter 3: Retail and field execution goes virtual

Chapter 4: Investments in B2B digital commerce heat up

Chapter 1 Digital acceleration drives industry-wide B2B maturity

CG companies supercharged their digital technology investments in 2020 to address market dynamics that changed on a daily basis. As if it was a matter of survival, acceleration of B2B route to market was an industry-wide event, with 99% of all CG companies undertaking efforts to modernise. Forty-two percent of CG leaders expedited digital projects that were already on tap within the year, while 43% expedited digital investments that were scheduled as far as 2–5 years out.

How many years of B2B digital transformation did you accelerate in 2020?

The majority of CG leaders (86%) overwhelmingly agree that they would have been less successful in 2020 without digital investments across functions like account management, retail and field execution, and B2B digital commerce. The impact on the revenue base from these investments varied for many companies. Most CG companies reported that the B2B route to market investments they made impacted 11%–50% of their total company revenue.

Respondents say that without the digital investments made in 2020, they would have been less successful during the pandemic.

What impact did digital transformation have in 2020?

Impact of digital transformation in 2020

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Chapter 2 Digital investments streamline account management

Because of the disruption in supply and customer demand during 2020, CG companies needed to stay proactive with key accounts while building relationships with new suppliers and vendors to get merchandise to their retail partners. Based on our survey, investments in telesales, digital customer service, and trade promotion management were prioritised the most in 2020.

Telesales

Telesales paid dividends for CG companies to manage their route to market in an environment where agility mattered and new relationships and contractual agreements became necessary in a remote environment. If we take a look at the best performers during 2020, the companies that implemented telesales early benefited the most, with 73% of CG leaders that implemented this capability prior to the pandemic seeing more than a 25% growth in sales.

Digital customer service

Similar to telesales, companies that outperformed on sales also implemented digital service capabilities to handle the exceptional jump in B2B customer enquiries and service needs. Key digital capabilities such as self-service knowledge bases, chatbots, and mobile services were deployed to provide the guidance that B2B customers needed during a hectic year.

Telesales and digital customer service

Trade promotion management

When it comes to account management trends, we were surprised to find that many CG companies shifted heavily into trade spend during 2020, regardless of how they performed sales-wise during the year. Given the increase in spending and the changes in consumer shopping behaviour, we are watching closely how trade programmes are managed in the future.

Industry-wide increase in trade promotion spend

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Chapter 3 Retail and field execution goes virtual

Flexibility, transparency, and responsiveness of the retail distribution network was critical in getting valuable merchandise to stores in the face of erratic demand. Field representatives still made in-person store visits, but they did so at a greatly reduced pace as CG companies worked to keep frontline workers safe. At the same time, retailers minimised unnecessary in-person contact to protect shoppers so field reps had limited time in-store for merchandising.

To maintain engagement from afar, CG companies introduced remote store visits. Field reps checked shelf-compliance and conducted merchandising activities remotely, while retailers were able to interact directly with reps to get what they needed to support shoppers.

Now, CG companies are embracing remote work for the long term and pivoting away from traditional field operations. Forty-four percent of CG leaders are looking to adopt more remote-based retail and field execution technologies in the next 3–5 years.

This includes real-time shelf-monitoring (40%), the Internet of Things (IoT) for merchandising audits (39%), and object and facial detection (37%) to support tasks like shelf audits and planogram compliance.

CG companies looking to adopt the following in 3–5 years

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Chapter 4 Investments in B2B digital commerce heat up

There was a monumental shift to digital in the B2C space during the COVID-19 pandemic — and the same is true for B2B digital commerce. 2020 was the year when the vast ecosystem of manufacturers, distributors, and large retailers used B2B digital commerce channels to browse products, receive quotes, and make large purchases online.

The rise of self-service b2b digital commerce

Eighty percent of all B2B organisations are moving or have moved to digital commerce. In looking closer at the CG industry, nearly half (48%) of respondents implemented self-service B2B digital commerce solutions in 2020.

Companies with revenue of $1B or more adopted self-service tools at an even greater rate (52%) than those with revenue of less than $1B (48%). A cohort of this size likely has electronic ordering in place through an electronic data interchange (EDI), but the increased investment in B2B commerce could indicate that even large businesses are modernising with self-service channels versus traditional EDI processes.

B2b digital marketing takes priority

It should be no surprise that as B2B commerce becomes a more important engagement channel, B2B marketing is also bubbling up as a spending priority. Targeting buyers with direct marketing and increased trade spend, including promotions, was also a priority along with new product introductions.

B2b marketing

Conclusion: What’s next in consumer goods?

In the great B2B digital acceleration of 2020, CG leaders have invested in critical areas in order to stay agile and relevant through the black swan event of the pandemic. Results from the survey indicate that digitisation of the supply chain, field execution, and customer service was a key indicator of success in 2020 — and will continue to be a priority for leaders in the near future. As CG leaders start to think about where to invest next, one thing holds true: The relationship between the brand and channel partners must be at the centre of everything.

To dig further into the report’s findings, view country and industry profiles.

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