P&G plots digital future

21 February 2011

CINCINNATI: Procter & Gamble, the FMCG giant, is using digital technology to transform its approach to reaching shoppers around the world.

Speaking to PricewaterhouseCoopers, Robert McDonald, the firm's chief executive, suggested that the company's core aim was to forge meaningful bonds with individual customers.

"If you look at our packaging, generally it's in the language of the country, and we work very hard to create those one-on-one relationships with every single consumer in the world," he said.

"It's easier to do that if you work in the local language and in the local culture than if you're this international company with an international brand that's somehow coming from abroad."

Digital technology is reshaping many aspects of the corporate agenda, and P&G hopes to harness these capabilities as a means of driving growth.

"The ultimate goal of a global company is being recognised as a local company," said McDonald.

"And when you think of that internet allowing this one-on-one relationship with every consumer, it enables that."

Sustainability has rapidly climbed the list of priorities for most multinationals, and P&G now aims to become "neutral to the environment", a target applying to its products and operations.

Although an exact strategy is not yet finalised, initiatives to date include developing detergents which function in cold water and introducing a "sustainability scorecard" for suppliers.

"I don't believe sustainability is optional anymore," McDonald argued.

"The world today is so flat, so transparent with the internet, and the impact of individuals is so heightened because of the ability to blog and tweet and other things, that consumers want to know what they're buying into when they buy your brand."

McDonald also stated an enhanced capacity in the digital arena offers a range of broader benefits, for example in monitoring performance information.

"Every Monday morning we have a meeting of our leadership team ... and we're surrounded by real-time data from the previous week," he said

"We're watching shipments and consumer purchases from around the world."

Based on these insights, the owner of Pampers, Gillette and Tide is able to quickly modify tactics, reflecting changing conditions.

"We look at the data every week, and once you make a decision - depending upon the country of the world or what you're trying to do - you can react almost instantaneously," McDonald asserted.

While implementing the resultant schemes, such as building factories, often takes considerably longer, greater flexibility still allows early movers to gain a lead.

"We see real-time operation as a competitive advantage. We want to be the most digitised company in the world, and use that real-time operation as a competitive advantage," argued McDonald.

A key driver fuelling this process is ensuring coordinated models exist, a major challenge when trading in a large number of nations.

"You have to move to globally standard systems. About five years ago, less than 20% of our systems were globally standard. Each region had its own system; each country had its own system," McDonald said.

"But today, more than 75% of our systems are globally standard."

This may seem like rapid progress, but McDonald revealed it has been over a decade in the making.

"What enabled that evolution was the decision back in 2000 to place the profit responsibility and back-office responsibilities in global business units rather than individual countries," he said.

Data sourced from PricewaterhouseCoopers; additional content by Warc staff