CPG brands push retailers to up their tech games
CPG companies are becoming a driving force behind the technological advancement of their retail partners. That was one of the main takeaways from a panel discussion at the 2018 National Retail Federation Big Show in New York between Mike Luzzi, director of global IT innovation at PepsiCo, Brian Kavanagh, director of insights of driven performance and retail evolution at The Hershey Company, and Jason Breazeale, director of innovation at Ahold Delhaize.
Mr. Luzzi said that his company has run into difficulties with retail partners that are resistant to, or incapable of, implementing the in-store technology required to best position Pepsi’s products, including technology many consider retail table stakes.
“To work with retailers sometimes we need electricity; we need wireless connectivity,” said Mr. Luzzi. “We need to be on Wi-Fi, and retailers aren’t always playing in the sandbox with us to do that.”
Mr. Kavanagh noted that opening up the section of the store in which his brand has its products to technology is critical to making it an attractive place to shop. To facilitate this, brands like Hershey have moved from a model in which they worked primarily with merchandisers and category managers to determine shelf positioning, to one in which they work with in-store folks, technology, operations and marketing.
“It’s a big shift in the way we think about the way we run IT,” Mr. Breazeale added. “You have to have executive leadership that’s going to have the vision of creating teams that can work on innovative solutions and proof of concepts to be able to work directly with [brands’ tech teams].”
Mr. Breazeale noted that brands sometimes bring technology to retailers that the merchants are unable to do themselves. He further advised that any tech vendor should consider the retailer’s tech capabilities.
“If you come to us with a fourth of a solution and expect us to find the other three-fourths, we’re probably going to look for someone that’s got a little bit more of a complete toolkit,” Mr. Breazeale said.
Mr. Kavanagh stated that defining metrics for success and determining a clear, shared goal is key to making the most out of the brand-retailer relationship and preventing promising tech projects from cancelation.
DISCUSSION QUESTIONS: How much should retailers allow CPG brands to drive their in-store tech projects and how much should they invest in technology in order to facilitate brands’ projects? How can CPG companies demonstrate their product as being worthy of investing in tech upgrades for a given project?