Are legacy CPG brands just naturally digitally-challenged?
Through a special arrangement, presented here for discussion is a summary of a current article from the bi-monthly e-zine, CPGmatters.
Why is it so hard for a CPG company to become a digitally enabled organization?
“If you have a 100-year-old company with process and culture, it’s really hard to change,” said Julie Bowerman, Kellogg’s chief global digital consumer & customer experience officer, recently at GroceryShop. “There are a lot of short-term pressures on the organization. You also have the Street constantly asking the CEO about digital native brands. When you are in a low-growth category, it’s hard to find that scale to justify an investment. Also, companies just don’t hire digitally capable talent.”
She said smaller digitally native brands have the right talent. They move quickly and innovate. They operate at a different end of the spectrum than large CPG organizations.
Joining Kellogg to build and lead the transformation of its online e-commerce business and brand digital experiences, Ms. Bowerman assembled a digital team “to reflect what is happening in the marketplace.” Staffed with blended talent, the team has a three-pronged focus: consumer, shopper marketing and customer. Everything is integrated.
“The other thing that we’re getting right at Kellogg,” she said, “is that we don’t think about this as just sales and marketing. We tell the organization that the beauty of e-commerce is that it’s a platform to build brands. Most importantly, we’ve established metrics for our business.” They include:
- Are we driving growth in the category?
- Are our brands healthy online?
- Are we growing the channel in a particular market?
“P&L and measurement routines are integrated into the company,” she said. “Culturally, this is how we build our ecommerce team.”
Ms. Bowerman listed several other ways Kellogg is getting it right:
- Scrappy leaders: “I want people who are going to break down walls and barriers.”
- Cross-functional partnerships: “They feel a partnership and they build credibility and trust with the rest of the organization.”
- Stewardship at all levels: “We’re constantly telling people the why and the benefit. Every part of the organization has to understand it.”
- Passionate about our agenda: “We’re super passionate. We came here to make a difference. That passion is what drives you. It’s part of our team culture.”
DISCUSSION QUESTIONS: What are the biggest lessons to take from Kellogg’s progress with its digital transformation? What are the biggest hurdles for a large CPG company seeking to become a digitally-enabled organization?