As we entered 2020, uncertainty in global trading relationships and falling customer demand signaled a likely recession. Almost overnight, this became a reality when the COVID-19 pandemic created its own raft of economic challenges.
For consumer-packaged-goods (CPG) and retail companies, this meant an immediate need to reconfigure supply chains and adapt to customers' quickly changing shopping habits, revolutionizing how businesses serve their consumers and manage their operations.
As e-commerce has gone mainstream, companies are penetrating previously resistant segments such as baby boomers, who have become comfortable with the channel. Consumer goods companies are also extending their reach by developing new high-volume, low-value direct-to-consumer (D2C) sales channels as demand for essential goods surged while the market for many nonessentials dropped sharply.
Such uncertainty and rapid change have created challenges for supply planning and demand forecasting and put pressure on cash flow and working capital. Businesses have been working to minimize risk until stability returns.
To help organizations manage today's obstacles and build a long-term future, we have identified the five characteristics of economic resilience commonly shared by companies that compete and thrive in challenging times (see figure 1).
To examine how CPG and retail companies can reinvent their businesses to thrive in the future, we explore how to start applying these traits today to become an agile, insight-focused, prosperous organization.