Cloud Computing and the CPG CMO
Cloud computing is a hot topic for not only Chief Information Officers, but also Chief Marketing Officers. Pat Conroy, vice chairman, U.S. Consumer Products Leader, Deloitte LLP (www.deloitte.com), discusses the ways cloud computing can transform business and allow marketers to better connect and sell to consumers.
CGT: Why is cloud computing important to CPG marketers?
Conroy: A number of improvements in technology performance, including computer processing power, data storage and network connectivity, are rapidly progressing. Furthermore, consumers are using mobile shopping applications and social media to maintain relationships with brands. Cloud computing harnesses these trends in a way that provides ongoing technological improvements and new operating models, letting companies temporarily purchase additional computing power for specific applications. Cloud computing could change the ways that CPG marketers build brands, understand consumer needs/attitudes, drive innovation, promote and price products, and manage consumer interactions across channels. For a marketer, cloud computing and related technologies, like social media and analytics, provide the ability to cost-effectively target consumers with tailored promotions. Cloud platforms and services are empowering CPG manufacturers by providing an opportunity to accelerate product deployment and improve the fundamental economics of selling directly to consumers.
CGT: What is the potential business impact of cloud computing for CPG
companies that are developing a direct-to-consumer channel?
Conroy: Advances in cloud computing seem to be dissipating traditional competitive advantages for large CPG manufacturers that come from economies of scale. The underlying technology infrastructure to scale quickly, platforms that develop direct-to-consumer online and mobile capabilities, and services to deploy e-commerce sites are impacting marketers. The typical cost-per-transaction curve that declines with higher volume of transactions — whether online or in physical stores — is shifting downward. The shift began with channels like eBay, and now Etsy, to increase reach and decrease transaction costs for relatively low volumes. Today, cloud computing enables large CPG companies to rapidly launch direct-to-consumer storefronts, like Gluten Freely that sells General Mills’ products and other brands. And, we expect the economics for CPG companies to create personalized storefronts with cloud-based technologies to continue to improve.
CGT: How can cloud computing and related
technologies impact digital marketing ROI?
Conroy: ROI for digital marketing could significantly exceed traditional marketing, thanks to the combined powers of cloud computing, social media, mobile devices and analytics. Marketers have the ability to narrowly and precisely target consumers with predictive models based on attributes like past purchases, demographics and location. As a result, marketers will be able to personalize interactions with consumers, which would be expected to lead to increasing revenue and reducing unintended margin loss. Personalized marketing is a consequence of faster and cheaper computer processing, data storage and network connectivity. This, combined with mobile devices and social networks, may create more bang for a company’s marketing buck.
Pat Conroy, Vice Chairman, U.S. Consumer Products Leader, Deloitte LLP
CGT: Why is cloud computing important to CPG marketers?
Conroy: A number of improvements in technology performance, including computer processing power, data storage and network connectivity, are rapidly progressing. Furthermore, consumers are using mobile shopping applications and social media to maintain relationships with brands. Cloud computing harnesses these trends in a way that provides ongoing technological improvements and new operating models, letting companies temporarily purchase additional computing power for specific applications. Cloud computing could change the ways that CPG marketers build brands, understand consumer needs/attitudes, drive innovation, promote and price products, and manage consumer interactions across channels. For a marketer, cloud computing and related technologies, like social media and analytics, provide the ability to cost-effectively target consumers with tailored promotions. Cloud platforms and services are empowering CPG manufacturers by providing an opportunity to accelerate product deployment and improve the fundamental economics of selling directly to consumers.
CGT: What is the potential business impact of cloud computing for CPG
companies that are developing a direct-to-consumer channel?
Conroy: Advances in cloud computing seem to be dissipating traditional competitive advantages for large CPG manufacturers that come from economies of scale. The underlying technology infrastructure to scale quickly, platforms that develop direct-to-consumer online and mobile capabilities, and services to deploy e-commerce sites are impacting marketers. The typical cost-per-transaction curve that declines with higher volume of transactions — whether online or in physical stores — is shifting downward. The shift began with channels like eBay, and now Etsy, to increase reach and decrease transaction costs for relatively low volumes. Today, cloud computing enables large CPG companies to rapidly launch direct-to-consumer storefronts, like Gluten Freely that sells General Mills’ products and other brands. And, we expect the economics for CPG companies to create personalized storefronts with cloud-based technologies to continue to improve.
CGT: How can cloud computing and related
technologies impact digital marketing ROI?
Conroy: ROI for digital marketing could significantly exceed traditional marketing, thanks to the combined powers of cloud computing, social media, mobile devices and analytics. Marketers have the ability to narrowly and precisely target consumers with predictive models based on attributes like past purchases, demographics and location. As a result, marketers will be able to personalize interactions with consumers, which would be expected to lead to increasing revenue and reducing unintended margin loss. Personalized marketing is a consequence of faster and cheaper computer processing, data storage and network connectivity. This, combined with mobile devices and social networks, may create more bang for a company’s marketing buck.
Pat Conroy, Vice Chairman, U.S. Consumer Products Leader, Deloitte LLP