CONSUMER PRODUCTS

What the Data Tells Us About Digital Transformation,
by Industry

The key ﬁndings for consumer products companies
Only about a quarter ofconsumer products companies
have successfully executed adigital transformation (wellbelow the 35% cross-industry
average), and 20% more than
average have created only
limited long-term change.

Most companies demonstrateleadership commitment, but many
fall short on agile governance anddeveloping a business-led modular
tech platform.

The top digital transformation
objectives include accelerating
sales and marketing, digitizing
the consumer experience andjourneys, and digitizing thesupply chain.

Priorities for the future are
next-generation marketing,smart sales, next-generation
customer service, anddigitizing support functions
and operations.

Within each area, leaders often
have diﬀerent priorities than the
broader industry: consumer trend
detection in next-generation
marketing, demand forecasting insmart sales, query handling using
chatbots in next-generation
customer service, and fullorder-to-cash digitization indigital support functions.

The importance of ESG forconsumer products is in linewith other sectors, with a fairly
even weighting among
environmental, social, andgovernance priorities.

Source: BCG analysis.

Companies that are further
along in their transformation
journeys shift the focus fromdigital reengineering to growthand innovation, cybersecurity,and further acceleration ofdigital marketing.

The data in more depth

Rates of successin digitaltransformation

Source: BCG analysis.

Topics of focus for
consumer products
companies

Top priorities forthe future

The criticalhuman andtech enablers

The role of ESG
in digitaltransformation

RATES OF SUCCESSThe number of consumer products digital transformation winners lags thecross-industry average, while the worry zone is 1.2 times larger
CASES BELOW SUCCESS SCORE (%)
10080

Consumer products data points

60

2021 cross-industry
average: 7.4

Consumer products
sector average: 7.3

40

Consumer products
Cross-industry
Woe zone (success score <6)
Worry zone (success score ≥6–<8)

20

Win zone (success score ≥8)

002

468

10
SUCCESS SCORE1

2021 BCG Global Digital
Transformation Survey overall

13%

52%

35%

11%63%

26%

Consumer products sector Limited value created(<50% of target); nosustainable change

Value created but total Target value met ortargets not met;
exceeded; sustainable
limited long-term change change created

Source: 2021 BCG Global Digital Transformation Survey.
Note: Survey question: “Across the following dimensions, please rate your organization’s digital transformation experience to date on a scale of 1 to 10, using the guidelines in the table below.”1
Success score is calculated from respondents’ answers on six dimensions of transformation: strategy; leadership; talent; agility; monitoring; and tech and data.

RATES OF SUCCESS

Consumer products companies show leadership commitment but struggle
for an agile governance mindset and business-led modular tech platforms
DISTRIBUTION OF SUCCESS SCORES ON INDIVIDUAL KEY FACTORS1Integrated strategy with clear transformation goals

2

Leadership commitment from CEO through middle management
Deployment of high-caliber talent

4

An agile governance mindset that drives broader adoption

5

Eﬀective monitoring of progress toward deﬁned outcomes6

Business-led modular technology and data platform

1234

5

6

7

8910

6.9

1

30

8.1
6.9
6.6
7.5
6.6Lower extreme Consumer product average Upper or lower quartile Upper extremeWoe zone (success score <6)

Worry zone (success score ≥6–<8)

Source: 2021 BCG Global Digital Transformation Survey.
Note: Survey question: “Across the following dimensions, please rate your organization’s digital transformation experience to date on a scale of 1 to 10 using the guidelines in the table below.”1
Success score is calculated from respondents’ answers on six dimensions of transformation: strategy; leadership; talent; agility; monitoring; and tech and data.

Win zone (success score ≥8)

TOPICS OF FOCUS

Objectives for consumer products companies include sales and market
acceleration, customer experience and journeys, and a digital supply chain
Strategic objectives

Scope of digital transformation1

SHARE OF RESPONDENTS (%)

SHARE OF RESPONDENTS (%)
Sales and market acceleration

3225

27

16

Improvement incustomer experienceand go-to-market

Innovation and growthin the core and beyond
Performance improvement
through the operational
value chain
Performance improvementin support functions

Source: BCG Global Digital Transformation Survey, 2021, n = 54.
1
Respondents were asked to select all priorities that applied.

83
80

Customer experience and journeys

76

Supply chain
Growth and business model innovation

67

Digitizing support functions

65

Marketing and dynamic pricing

62

Digital manufacturing and operations

57

Digital ecosystem and partnerships

56

Digital procurement

54

New business venture

52

Building resilience via cybersecurity
and compliance44

TOP PRIORITIES FOR THE FUTURE

The top investment priorities for consumer products companies are
next-generation marketing and smart sales
PLANNED SHARE OF WALLET SPENDING ALLOCATED ACROSS DIGITAL TOPICS IN THE NEXT TWO TO THREE YEARS (%)191

Next-generation marketing

2181

Smart sales

1978

Digital supply chain

1883

Digital support functionsand operations
Product innovation andsmart factory
Next-generation
customer service

1576138113
Share of respondents allocating any investment toward each digital topic

Average share of total investment

Source: 2021 BCG Global Digital Transformation Survey.
1For example, the uppermost pair of bars can be read as “91% of consumer products respondents plan to invest in next-generation marketing, allocating an average 21% of total digital investment.”

TOP PRIORITIES FOR THE FUTURE

Consumer products companies’ digital priorities: Next-generation marketing
Digital initiatives (bars indicate relative prioritization of initiatives)
Personalized and targeted campaigns

1.00

Predictive consumer preference (trend detection)

0.77

Smart ROI optimization, and advertisingand promotion allocation

0.68

Social media-based customer engagement(inﬂuencers, brand ambassadors, etc.)

0.57

Smart customer segmentation

0.33

Digital loyalty programs

0.21

Automated lead generation and handling
Relative prioritization for all consumer products companies
Source: 2021 BCG Global Digital Transformation Survey, n = 54.

0.13
Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Consumer products companies’ digital priorities: Smart sales
Digital initiatives (bars indicate relative prioritization of initiatives)
E-commerce sales acceleration

1.00

Demand forecasting (improving on-shelf availability)

0.75

Pricing optimization and oﬀer generation (markdown, bundling, etc.)

0.69

Data-powered ﬁeld sales (improving point-of-sale prioritizationand optimizing outlet-level activation)

0.39

Optimized/localized product assortment and merchandising

Optimal store location distribution
Relative prioritization for all consumer products companies
Source: 2021 BCG Global Digital Transformation Survey, n = 54.

0.36

0.15
Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Consumer products companies’ digital priorities: Digitizing the supply chain
Digital initiatives (bars indicate relative prioritization of initiatives)
Demand forecasting

1.00

Dynamic Inventory planning

0.64

Capacity planning

0.49

Real-time product and supplies tracking

0.37

Automated warehouse

0.21

Route/network optimization

0.19

Real-time inventory tracking

0.12
Relative prioritization for all consumer products companies

Source: 2021 BCG Global Digital Transformation Survey, n = 54.

Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Consumer products companies’ digital priorities: Digitizing support
functions and operations
Digital initiatives (bars indicate relative prioritization of initiatives)
End-to-end hire-to-retire digitization (includingintegrated training) for HR

1.00

End-to-end record-to-report digitization of ﬁnance activities

0.92

End-to-end procure-to-pay digitization for procurement

0.78

End-to-end order-to-cash digitization for managementof accounts receivable

0.61

End-to-end source-to-contract digitization for contracting

Automated shift management for store staﬀ
Relative prioritization for all consumer products companies
Source: 2021 BCG Global Digital Transformation Survey, n = 54.

0.47

0.29
Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Consumer products companies’ digital priorities: Product innovation andsmart factory
Digital initiatives (bars indicate relative prioritization of initiatives)
Market intelligence to understand customer needs and preferences

1.00

Manufacturing analytics (production optimization, default detection, etc.)

0.64

Connected products (user control functionalities
through hand-held devices)

0.32

Robotics and automation on assembly line

0.32

Predictive and preventive maintenance for machinery

0.27Digital twin

0.17

Shop-ﬂoor simulation

0.16

Shop-ﬂoor labor-force optimization and schedule/shift management

0.15

Energy eﬃciency optimization

0.14
Relative prioritization for all consumer products companies

Source: 2021 BCG Global Digital Transformation Survey, n = 54.

Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Consumer products companies’ digital priorities: Next-generation
customer service
Digital initiatives (bars indicate relative prioritization of initiatives)
Query handling (chatbots, interactive voice response, social media, etc.)

1.00

End-to-end request management system (query, servicing request, etc.)

0.92

Digital self-support

0.91

App- or platform-based after sales scheduling and payment

Optimization of after-sales support network
Relative prioritization for all consumer products companies
Source: 2021 BCG Global Digital Transformation Survey, n = 54.

0.64

0.61
Top priorities for win-zone companies

THE CRITICAL ENABLERS

Consumer products companies intend to invest across broad range of techand human enablers
Eight out of ten consumer products companies plan to invest in AI and big data, infrastructure and cloud enablement,
cybersecurity, and continuous learning, allocating about 50% of total digital enablers spending to these areas
PLANNED SHARE OF WALLET SPENDING ALLOCATED ACROSS ENABLER DIGITAL TOPICS IN THE NEXT TWO TO THREE YEARS (%)1Tech

Human

85

83

81

81

78

72

6965
16

Infrastructure
and cloudenablement

15

Modernizationof techarchitecture

11

AI and big data

10

Cybersecurity

13

Modernization oftechnology
organization andoperating model

Share of respondents allocating any investment toward digital topic

10

New ways ofworking

61
8New talent andleadershipmodelsAverage share of total investment

Source: 2021 BCG Global Digital Transformation Survey, n = 54.
1For example, the leftmost pair of bars can be read as “83% of consumer products respondents plan to invest in AI and big data, allocating an average 16% of their total digital enablers spending.”

87

Continuous
learning

Integrated
ecosystems

ROLE OF ESG IN DIGITAL TRANSFORMATION

About 78% of consumer products
companies plan to invest more inESG, near the cross-sector average… with relatively equal
weighting for E, S, and G

Share of respondents planning to increase/decrease/maintain investment toward ESG in coming years

Leading digital initiatives being prioritized
to support E, S, and G goals

19

Moderately
increase

59

Maintain as inprevious year(s)Decrease vs.
previous year(s)25220

Source: 2021 BCG Global Digital Transformation Survey, n = 54.

56

171

SocialSigniﬁcantly
increase

CROSS-INDUSTRY AVERAGE (%)

Governance

PROVIDER AVERAGE (%)

Environment

SHARE OF RESPONDENTS PRIORITIZING (%)· Preventing emissions by optimizing
manufacturing processes· Digital supply chain optimization· Reducing employee risk
· Creation of targeted, personalized
training programs· Critical risk incident management,
building cyber resilience· Real-time tracking and monitoring of risk

~48~44~45

If you would like to discuss this topic, please contact one of the authors:
AMANDA LUTHERSHILPA PATELDAN WALDJOSH DINGTAYLOR SMITH

JEFFREY WALTERSManaging Director & Partner, Austin
luther.amanda@bcg.com+1 214 850 4916

Managing Director & Senior Partner, Chicago
wald.dan@bcg.com+1 312 993 3967

Managing Director & Senior Partner, New Yorksmith.taylor@bcg.com+1 212 446 2822

NICOLAS DE BELLEFONDSManaging Director & Senior Partner, Parisdebellefonds.nicolas@bcg.com+33 1 40171957

Managing Director & Partner, London
patel.shilpa@bcg.com+44 20 77535691

Managing Director & Partner, Hong Kongding.josh@bcg.com+852 25065965

Managing Director & Senior Partner, Hong Kongwalters.jeﬀ@bcg.com+852 25065938