Hyperlocal: Going Local for Global Sustainability in CPG - Brillio
Sneha Kumar June 21, 2022

Technology disruptions and the need for seamless customer experience are transforming the Consumer-Packaged Goods (CPG) industry’s complete value chain. To enhance individual consumer experiences, collective sustainability, and profitability, businesses must use intuitive technologies and new business structures.

Technology has been a crucial differentiator for every CPG business, with digital enabling various parts of the value chain – from manufacturing, packaging, and delivery to customer engagement. The most crucial part for any business is a resilient supply chain which backed by technology has proven to be a game-changer.

With the current global climate crisis, sustainability has been a vital component in every business’s strategy, and the growing awareness and pull from the consumers for an increased range of eco-friendly, sustainable products have only increased the need for companies to highlight their initiatives in building their businesses sustainably.

The global supply chain disruption caused due to the advent of the pandemic, resulting in rapid surges in demand and inadequate supply continues to impact businesses as they struggle to return to a steady-state. Some of the major challenges are the lack of key components and raw materials, labor shortages, border controls and mobility restrictions, geopolitical constraints, and supply chain bottlenecks during transit.

All the processes that take place in a warehouse must be organized, managed, and maintained so that they work as smoothly and efficiently as possible. Even though some of these procedures are automated and appear to be error-free, every warehouse operation is susceptible to errors and problems. According to a report by McKinsey & Company in 2020, about £300 billion (approximately $385 billion) is spent each year, worldwide, on overall warehousing costs.

Warehouse issues can impact the speed, efficiency, and productivity of a single warehouse operation as well as the entire chain of processes that are connected to it. Some of the key problem areas in warehouse management are:

  • Operational redundancy is increased by unorganized workflows leading to loss of time and labor.
  • An inefficient warehouse layout reduces the average capacity utilization and wastage of space.
  • Poor inventory management due to misplacement of goods, improper demand forecasting, high lead times, and ineffective stock-keeping methods.
  • Subpar order management can collapse the entire workflow from order receival to fulfillment, causing multiple delays and increased costs across the supply chain.

Technology as a Sustainability Tool

This is where technology plays a prominent role in building a sustainable supply chain. Digitizing your supply chain processes will change the way you do business. A digital supply chain platform will give you a competitive advantage by allowing for better communication, faster decision-making and issue resolution, delayed mitigation, partner connections, and increased visibility.

To meet enormous demand, the pandemic demanded the introduction of modern technology tools and non-contact modes. These changes in consumer shopping habits, according to analysts, are here to stay in the post-pandemic era. With an increased number of people and businesses relying on e-commerce as a result of the pandemic, there has been a “structural shift” in buying behavior.

Technology has been the backbone in enabling companies rapidly scale their operations during the sudden surge in demand due to this unprecedented business scenario. Along with technology, the increased demand has also led to companies partnering with local retailers and brick & mortar stores to increase their pool of suppliers and enable easier and quicker access to products that can be locally sourced, thus reducing their warehousing, inventory & transportation costs along with ensuring faster fulfillment rates. Companies were able to leverage their existing tech to onboard local retailers by providing them a platform and the required know-how to cater to the surge in demand.

The shift to digitization was quick with the creation of a simpler online journey by using companies’ existing apps to take orders, provide contactless delivery, and then accept payments via digital platforms.

Since stay-at-home orders began in the United States, hyperlocal delivery apps have reportedly made large profits. San Francisco-based Instacart, for instance, sold $700 million worth of groceries per week in the first two weeks of April, an increase of 450 percent from December 2019.

Gopuff, Gorillas, Getir, 1520, Jokr, Buyk, and Fridge No More are among the companies increasing their delivery services in major US cities, increasing the pressure on established supermarkets, convenience stores, and e-commerce businesses to provide faster delivery services. According to a Techcrunch report, in the UK, there has been a 39% increase in hyperlocal food deliveries over the last three years. Irish grocery delivery start-up Buymie has raised EUR2.2 million from different investors in April 2020 to expand its operations. The company has extended its trial partnership with Lidl in Ireland, and, for the first time, has expanded internationally via a partnership with Co-op in the UK, launched in May 2020. Meituan-Dianping, the Chinese hyperlocal delivery super app, reported a 400% year-over-year spike in sales in February.

Shopping online has gradually transitioned from the domain of compulsion to being part of daily life for thousands of first-timers who learned to navigate eCarts through virtual aisles last year, becoming a comfortable, handy way to acquire what the heart desires from the comfort and safety of home and this has given companies an enormous opportunity to revamp their supply chain strategies by going hyperlocal, thus increasing their range of suppliers and reducing their carbon footprint, thus making them more sustainable.

About the Author

 

Sneha Kumar

Working as a Consultant, Cloud Engineering Studio for Brillio with 4 years of industry experience in delivering value for a variety of digital transformation projects and assessments across several verticals worldwide. Focused on developing technology POVs, GTM strategies, and emerging tech use cases for various clients across industries such as BFSI, Retail, Telecom, Real Estate, and Hitech. Certified SAFe Product Owner.

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