Today’s consumer is more informed than ever before. Between Google searches and customer reviews, they are able to find out almost anything they want to about your company’s products in seconds.

Just 17 percent of consumers are primarily looking to buy something when visiting a brand’s website for the first time, according to Episerver — the rest are there to “browse, look at prices, and compare.”

At the same time, consumer expectations are also on the rise. They’re not only looking for the best product, but also the best company — one that they can trust and feel personally connected to.

In a study conducted by Salesforce, 80 percent of consumers indicated that the experience a company provides is as important as its products and services. 95 percent of them also said they are more likely to be loyal to a company they trust.

So how can businesses meet the ever-rising exacting standards of the modern consumer adequately? The answer lies in the fourth industrial revolution, more widely known as Industry 4.0.

Table of contents

Welcoming Industry 4.0
What Is Digitalization?
Digitalization Use Cases
How Supply Chain Managers Can Benefit From Digitalization
How Brand And Marketing Managers Can Benefit From Digitalization

Welcoming Industry 4.0

According to a PwC report, Industry 4.0 is “about companies orienting themselves to the consumer through e-commerce, digital marketing, social media, and the consumer experience […] through the vertical integration of research and development, manufacturing, marketing and sales, and other internal operations, and new business models based on these advances.”

This can be achieved by using digital technologies — such as the cloud, big data, the Internet of Things, 3D printing, and augmented reality — to fully integrate all the moving parts of a business and hence drive operations and growth.

A report by Deloitte states that Industry 4.0 will change:

  • How we make things
  • How those things are moved (through autonomous logistics and distribution)
  • How consumers interact with them
  • The experiences they expect to have as they interact with companies

Many businesses are slowly but surely being pushed towards deploying new technologies to accelerate traditional industrial and manufacturing practices, and hence making Industry 4.0 a reality.

However, there are many who are in fact digitizing rather than digitalizing — two terms that are commonly thought to be interchangeable (they’re not).

What is Digitalization?

According to research firm Gartner, digitization is “the process of changing from analog to digital format.” This process creates digitized data “without any different-in-kind changes to the process itself,” which can then be used for business purposes.

That’s where digitalization comes in, which happens when “digital technologies [are used] to change a business model and provide new revenue and value-producing opportunities.”

Take counterfeit goods, for instance. Previously, companies had to rely on investigation agencies, legal counsel, local sources, distributors, and law enforcement in order to keep track of and monitor counterfeiting.

However, they had no effective way to let their consumers know how to spot counterfeits. The problem was twofold: this might potentially reveal trade secrets, and companies would rather not admit publicly they have an issue with counterfeiting. With the proliferation of e-commerce, this has only become more difficult for brands as consumers are faced with more platforms to purchase from, and as such, more opportunities to be swindled.

What happens if they decide to digitalize the tracking process? The company might place secure QR codes on the tags of their items, which would allow consumers to authenticate the product in question simply by scanning the code with an app.

In this way, consumers gain the added value of knowing that the product they are purchasing is the real deal through a single, simple step, as opposed to having to search for the information they need. Their trust in the company increases, and barriers to purchase are reduced significantly — a win-win scenario.

Read here to learn about:

  1. Five Steps To Digitizing Your Product
  2. Strategies For Optimizing Your Supply Chain With Data
  3. How Marketing Managers Can Improve Customer Loyalty Through Digitalization
  4. Improving Consumer Insights Through Digitalization

Digitalization use cases

The QR code we mentioned previously is, in fact, one of our core ScanTrust products. Here, we strongly believe that secure digitalization has immense benefits for any company dealing with physical goods, regardless of the industry that you are in.

As you probably know, product deliveries tend to follow a very standardized process. The aforementioned PwC report outlines it as such:

  • The marketing team will analyze consumer demand, and based on their findings, attempt to predict sales for the coming period
  • With those numbers in mind, manufacturing will order raw materials, components, and parts to prepare to meet that demand
  • The distribution team will account for upcoming changes in the amount of product coming down the pipeline, and update consumers as to when they can expect their deliveries
  • If all goes well, the gap between demand and supply at every point in the system is as small as humanly possible

Naturally, the report continues, this “rarely happens,” largely due to the lack of transparency between teams and departments. None of the “links in the supply chain really understand what any other link is doing, or needs.”

The vision of Industry 4.0 is to build a digital supply chain that would break down the walls and cause it to be fully transparent to all players involved. This would require companies to not only digitize, but to digitalize.

The rest of this article will dive into examples of how digitalization can improve your business processes, whether you’re in charge of overseeing the supply chain, selling your brand, or marketing products.

How Supply Chain Managers Can Benefit From Digitalization

If your company deals with physical goods, you’ll know that the supply chain is the heart of your business.

According to the same report by PwC, companies with “highly digitized supply chains and operations” can expect efficiency gains of 4.1 percent, as well as a 2.9 percent increase in revenue, annually.

In another study by PwC, a third of respondents also say their companies have started to digitalize their supply chains, with another 72 percent expecting to have done so five years from now.

As a supply chain manager, the transparency gained through digitalization will let you detect anomalies occurring anywhere in the chain that might have an effect on supply and demand, and allow you to come up with solutions right away.

As a result, there are fewer risks involved at the supply chain level, and consumers would be able to receive the right products, faster.

For instance, consumer products company Colgate-Palmolive’s recent adoption of Smart Manufacturing has allowed them to “address complex problems and further achieve operational excellence”:

“Factories are starting to use sensors to predict failures, collaborative robots for material handling, auto palletizers, hand-held wireless devices for material flow, as well as radio frequency identification (RFID) to track pallets and inventory. Some factories have video feeds and cameras for remote operator support.”

This program, reported Colgate-Palmolive director Andres Bejarano, has helped the team “improve 10 points on our asset utilization […] delivering significant savings due to productivity improvement.”

This level of transparency enables supply chain traceability as well, which would allow you to analyze all the moving parts in your chain at a more granular level. Ideally, each of your physical products would have a ‘digital identity’— their unique data and content —that you can follow through the chain. This, in turn, affords you the opportunity to fine-tune your processes to accommodate important consumer needs and wants.

At ScanTrust, such identities are given to products through Supply Chain Management (SCM) Tags, which enable supply chain managers to set up and associate unique data and attributes to individual products.

With SCM Tags, for instance, supply chain managers can set up automated alerts for anomalies such as ‘Off-Market’ and ‘After Sell By Date’. Whenever these events surface, notifications can be pushed to end-consumers for product recalls, making it easier to trace affected products. This also allows the business to protect the integrity of its brand.

Product authentication is another great example of tracking and tracing in action. If your company sells luxury goods, your ideal consumer will likely be extremely discerning, and will want to know beyond doubt whether your items are the real deal.

A digital supply chain would allow you to trace the item that’s in his or her hands back to its provenance—ensuring that it did indeed originate from your warehouses—and pass this information on to the consumer right away.

Finally, a digital supply chain would also allow you to optimize and automate these processes for maximum efficiency, achieving better results at scale. In the long run, such refinements would lower costs across the board.

How Brand And Marketing Managers Can Benefit From Digitalization

Previously, we discussed how today’s consumers want to be as informed as possible.

This applies not just to luxury goods, but even day-to-day consumables such as coffee and wine. Modern consumers want to know that their consumption choices are socially responsible and environmentally friendly—and they are willing to put their wallets where their mouths are.

According to a survey conducted by data and measurement company Nielsen, 66 percent of respondents indicated that they’re willing to pay more for products and services that come from companies that are committed to positive social and environmental impact.

This is especially so when it comes to food—at least, for Americans. A recent study commissioned by the USDA (U.S. Department of Agriculture) found that more than half of Americans were concerned about bioengineered food.

With a digital supply chain, for example using QR codes, brand and marketing managers would be able to track and trace their products back to their provenance, providing consumers with tangible proof to reassure them that what they are consuming is indeed genuine and securing their loyalty.

In the case of food, many brands are interested in using QR codes on packaging “to disclose GMO and other food information [which] provides a couple of major benefits to food manufacturers.” Already, Austrian grocery chain SPAR Österreich has taken a more direct approach, deploying over a hundred iBeacons per store which would allow them to “issue tailored messages about promotional campaigns to customers.”

As you can see, such ‘smart packaging’ provides brand and marketing managers with an additional channel to engage end-consumers. Gamification, loyalty programs, and storytelling are some ways in which you can encourage consumers to follow, re-engage, and advocate for your brand and products.

In addition, such campaigns provide valuable data points such as what products consumers are looking for, when demand is high for them, and how they prefer to receive deliveries. Armed with this knowledge, brand and marketing managers can provide the relevant information at the right moment in the consumer journey to maximize conversions or reinforce brand promises.

The same data can also provide category managers with insights as to the products that consumers tend to order together, and bundle them with a discount in the right season to sell more units.

How supply chain managers can improve their business with digitalization

  • Tag individual products based on their unique data and attributes, giving them ‘digital identities’ which can be tracked and traced throughout the supply chain
  • Early detection of anomalies occurring anywhere in the chain that might have an effect on supply and demand
  • Set up automated alerts when anomalies are detected and easily identify affected products
  • Authenticate products by tracing them back to their provenance
  • Increase efficiency and lower costs by optimizing and automating such processes

How Brand And Marketing Managers can improve their business with digitalization

  • Increase brand loyalty by assuring end-consumers that products are socially and environmentally friendly, and authentic, by providing proof that tracks them back to their provenance
  • Encourage consumers to follow, re-engage, and advocate for your brand and products through gamification, loyalty programs, and storytelling campaigns
  • Maximize conversions by providing relevant information at the right moment in the consumer journey
  • Sell more units by bundling products that consumers tend to buy together with a discount in the right season

Read other articles in this series:

  1. Five Steps To Digitizing Your Product
  2. Strategies For Optimizing Your Supply Chain With Data
  3. How Marketing Managers Can Improve Customer Loyalty Through Digitalization
  4. Improving Consumer Insights Through Digitalization