{"id":14516,"date":"2016-11-14T18:46:32","date_gmt":"2016-11-14T23:46:32","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/a-smarter-pg\/"},"modified":"2016-11-14T18:46:32","modified_gmt":"2016-11-14T23:46:32","slug":"a-smarter-pg","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/a-smarter-pg\/","title":{"rendered":"A Smarter P&G"},"content":{"rendered":"

Arguably nowhere is data more important than in Consumer Packaged Goods (CPG) where consumers often interact with a brand\u2019s products on a daily basis. \u00a0Industry titan, Procter & Gamble (P&G) has made it their mission to become \u201cone of the most digitally connected businesses in the world\u201d by leveraging digital technology to gain superior consumer insights on which CPG companies rely heavily. [1]<\/span><\/p>\n

CPG has traditionally been characterized by fierce competition between brands. \u00a0Brands have looked to analytics to gain a competitive advantage to better understand their consumer\u2019s needs and behaviors and then use those insights to form stronger connections with consumers. \u00a0[2] \u00a0<\/span><\/p>\n

Former CEO Robert McDonald recognized the importance that P&G invest heavily in digitization and connectivity. \u00a0In an interview he stated, \u201cOur purpose at P&G is to touch and improve lives; everything we do is in that context. With digital technology, it\u2019s now possible to have a one-on-one relationship with every consumer in the world…We want to be the company that creates those indispensable relationships with our brands, and digital technology enables this.\u201d [1]<\/span><\/p>\n

P&G\u2019s primary digitization efforts have been focused on connectivity with the consumer. \u00a0In early 2014, they released their web-enabled Oral B toothbrush complete with smartphone app that keeps track of brushing habits and offers consumers oral care tips while feeding information back to P&G. [3] \u00a0Subsequently, when Amazon launched its Dash buttons in 2015, P&G became the leading partner on the push-button devices that would allow consumers to quickly order select P&G products from Amazon in a convenient location in their homes. [4] More recently, P&G launched a Febreeze plug that can release scents into a consumer\u2019s home with a tap of one\u2019s smartphone. [5]<\/span><\/p>\n

\"capture\"<\/a><\/p>\n

What do all these products have in common? \u00a0They all create value to the end consumer (convenience, information, efficiency), while providing P&G better consumer insights and an opportunity to strengthen their relationship with the consumer. <\/span><\/p>\n

Product launches thus far from P&G, however, have been a bit disjointed. \u00a0The products, while creating this value for consumers, have lacked an integrated approach. \u00a0P&G hopes to move there with its investment in Thread, the underlying protocol used in many of these products that could be the basis of a \u201csmart home.\u201d \u00a0This protocol is also being utilized by other IoT (Internet of Things) companies including Nest, Freescale, and Silicon Labs. [6]<\/span><\/p>\n

P&G started with the consumer as \u201cconsumer understanding\u201d is the core strength that their other strengths, including productivity, innovation, go-to-market, brand building and scale, depend on. [7] They have then been moving towards leveraging digitization across every aspect of operations including R&D, relations with retailers, manufacturing, and brand building. \u00a0Digital capabilities allow for better communication, higher productivity with the ability to troubleshoot issues, lower costs, and the opportunity for higher growth with better relationships with both retailers and end consumers. [1] \u00a0Although this is part of P&G\u2019s digital mission, it is unclear how much progress they\u2019ve made in reaping the benefits of the digital infrastructure they\u2019ve begun to create. \u00a0<\/span><\/p>\n

\"core-cap\"<\/a><\/p>\n

Deep analytic capabilities and integrated digital connectivity with consumers will likely be key differentiators for CPG companies in the future. \u00a0Although P&G is well positioned with their efforts so far, they will likely need to have a more integrated approach to really win with consumers. \u00a0Consumers will need to see how P&G\u2019s digitally enabled products fit together in their lives to have the greatest impact.<\/span><\/p>\n

P&G will also need to continue to be at the forefront of innovation to capitalize on this opportunity. \u00a0This will mean investing heavily in R&D with people resources and giving their employees runway to use design thinking to create the new products that can be part of an integrated system that resonates with consumers. They will also need to continue to explore partnerships with Amazon and other tech companies \/ retailers investing in digitization to ensure their approach evolves with how consumers are interacting with products.<\/span><\/p>\n

Lastly, with the trend towards digitization, P&G must be wary of the potential threat that privacy concerns play in the proliferation of these new technologies. \u00a0Many consumers are still wary of companies having \u201ctoo much information\u201d on them as well as cyber security risks. \u00a0P&G must invest appropriately in security measures and put the correct safeguards in place to establish and maintain consumers\u2019 trust.<\/span><\/p>\n

Word Count: 713<\/p>\n","protected":false},"excerpt":{"rendered":"

P&G is at the forefront of digitization among CPG companies with some of their “smart” product launches, however, will they be able to continue to innovate and win in this space?<\/p>\n","protected":false},"author":2626,"featured_media":14517,"comment_status":"open","ping_status":"closed","template":"","categories":[52,690,430,1503,2037,2038],"class_list":["post-14516","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-amazon","category-consumer-products","category-cpg","category-iot","category-smart-home","category-thread"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"\nA Smarter P&G - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/a-smarter-pg\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A Smarter P&G - 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