The So What from BCG: How Can My Shopping Save The Planet?
Sustainability is as much about mindset, intention, and focus as technology, explains Shalini Unnikrishnan, a leader on social impact at BCG.
The global pandemic has accelerated the shift toward the future of retail, with digital investments becoming increasingly critical to meeting consumers' new needs and fending off new competitors. BCG's retail consultants help clients develop and deliver the right digital, analytics, tech, and retail strategy to thrive in this dynamic environment.
Many companies in the retail industry are rich in data but have yet to harness it as a real driver of the business. Now, nothing less will do. BCG helps retailers prioritize digital efforts as part of an adaptable retail strategy that is more responsive to customer needs than ever before. BCG also guides retailers looking to create and fund new sources of growth—whether through a digital product, an internal or startup venture, or mergers and acquisitions.
Our retail consulting teams are composed of retail industry experts with skill sets that span the entire digital space, supported by proprietary platforms and solutions from our specialty business BCG Gamma. As consumer behavior continues to shift rapidly and abruptly in our pandemic-changed world, our work focuses on improving the commercial proposition, formats, and omnichannel and operations capabilities needed to deliver on retail strategy.
Retail Analytics and Artificial Intelligence. To help clients better leverage the power of their data—and better integrate with retail ecosystems—BCG combines advanced analytics and AI with data to solve problems all along the value chain, from ranging and pricing to personalization and logistics.
Omnichannel Retail Strategy. We take a customer-driven approach to omnichannel strategy design, drawing on our proprietary consumer research techniques and world-class personalization data-science capabilities to support data-driven sales and omnichannel growth strategies. Our approach to omnichannel retail offers a holistic view that allows clients to attribute, track, and measure the value of investments across all channels.
Retail Operations. Delivering the right customer experience with the right product or service at the right time and place—and doing so cost effectively—has become job number one in 2020. The need for flexibility extends to supply chain partners and other drivers of a multiformat retail experience. With the desired customer experience and economics acting as the North Star, we prioritize the right end-to-end operations use cases, then rapidly mini-test and iterate specific solutions (physical and digital) to improve demand forecasting, product availability, service and labor planning, inventory management, waste reduction, and more.
Cost Optimization. Addressing each element of cost independently, we reset the base on a collection of cost drivers to align operating costs with the retailer’s customer value proposition, providing significant value for key stakeholders. In a shifting retail environment, rigorous tradeoffs among cost, service, and experience are essential to this process.
Digital Retail Marketing and Personalization. To help retailers expand their audience and deepen connections with existing customers, we leverage our experience in developing digital marketing capabilities, using AI and other retail technology to drive personalization—the frontier where customers, now more than ever, are won or lost.
Social Impact. Embedding sustainable practices and active social responsibility into retail operations has moved from a side activity to a top priority. We partner with global retailers to ensure that contributions to social and environmental goals—for example, inclusive hiring practices and reduced food waste and plastic packaging—drive business value.
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By blending the capabilities and experience of each retail consultant assigned to your project, we create the optimal team to identify and meet your challenges.
Transformed Sales and Profit for an EU Retailer
Working with a leading EU retailer, BCG created a new pricing and promotions strategy and applied new range-performance-analysis tools on approximately 25,000 SKUs, optimizing all food categories. Our joint work delivered promotional results that were 33% above target in the first year. It also reduced the range by around 20% while making it more relevant for customers. In addition, there was a 6% increase in like-for-like volume—driven by the investment of liberated funds into pricing for top lines—along with a significant improvement in value perception.
Fashion Retail Employees Leverage AI Globally in Nine Months
BCG delivered an AI transformation at a global fashion retailer, in close partnership with the client’s internal team. Using our technology partners, including BCG GAMMA and Platinion, the team leveraged AI to improve forecasting and pricing for more than 10,000 products, optimize inventory across more than 3,000 stores, and generate over 500,000 automated personalized emails. Completing a small pilot in four weeks, the team quickly scaled it, achieving a double-digit profit uplift. The project scaled to more than 70% of the global business in less than one year, and the industrialized model was complete in 18 months.
After a Successful Turnaround, a Grocery Retailer Doubled Its Share Price
A declining North American multiformat grocery retailer engaged BCG to create a transformation management office to ensure a successful turnaround. This hub drove a major reorganization, launched cost-out programs, and expanded e-commerce to drive growth. Early success showed gross margin increases and adjusted EBITDA up around 1%, with a rebound in share price to pre-decline levels. Now on track to exceed $500 million in savings, leadership is looking to advanced analytics and AI to further growth.
Commercializing Environmental Targets Drives Growth for an Asia-Pacific Retailer
A retailer in Asia-Pacific with ambitious environmental targets partnered with BCG to create a business incubator to develop and commercialize projects. Together, we defined the incubator’s role, operating model, and governance, then prioritized and designed four scalable initiatives in upstream food waste, plastics action, sustainable agriculture, and waste-as-a-resource. Deliverables included a detailed roadmap and, with the resource budget needed to meet targets of 30% growth, 4X reduction in net GHG emissions and 2X diverted food waste.
Sustainability is as much about mindset, intention, and focus as technology, explains Shalini Unnikrishnan, a leader on social impact at BCG.
Giving the customer infinite pathways, omnichannel is the new frontier in shopping. This first video in BCG’s series on the future of retail takes us to China to learn how customers and retailers both benefit.