Digitalization is a crucial driver of Nestlé's continued evolution. It covers all aspects of our business and helps create new platforms for growth, enhances agility and generates efficiencies. We are advancing as a digitally enabled and data-intelligent business.
Scaling growth in e-commerce
In 2020, our e-commerce sales accounted for 12.8% of sales and grew by 48.4%. This strong growth reflects our ability to adapt quickly to rapidly-evolving consumer demands and is based on:
- A deep understanding of which categories, geographies, brands and consumer value propositions fit with e-commerce.
- Experience building responsive, scalable and profitable direct-to-consumer businesses.
- A close relationship with all retailers selling online.
- Ensuring our markets have the freedom to tailor a centrally developed toolkit of digital technologies and practices to their local needs.
E-commerce is part of our omnichannel strategy, combining online and offline, to delight consumers with the best shopping experience however, wherever and whenever they decide to shop. We seek growth across all channels, from partnerships with e-retailers to direct-to-consumer businesses such as Nespresso, Persona and Tails.com.
We continually learn with consumers, customers and technology partners to develop new areas of opportunity, such as:
- Deploying artificially intelligent chatbots to boost consumer engagement, such as cooking assistants.
- Expanding and personalizing services, such as nutrition advice.
- Making shopping more convenient through voice search and social commerce.
- Partnering with last mile delivery service providers.
- Advancing our sustainability agenda.
We are partnering with the world's leading digital innovators to reshape our marketing and commerce practices for the digital world. We are leveraging our scale to generate value and build new capabilities backed by powerful data models and algorithms. Our goal is to empower teams to make smarter, quicker decisions by transforming data into an accessible, reusable asset.
A key focus of these efforts is understanding the return on each marketing and commercial investment. To deliver on this, we are upgrading our end-to-end analytics capabilities to measure the value of each consumer and customer touchpoint and the impact of every campaign. These efforts are helping us to:
- Understand the effectiveness of each brand interaction.
- Generate efficiencies by improving resource allocation.
- Capture insights that can be used to optimize channel strategies in real time.
- Identify opportunities for innovation and the scaling up of new launches.
- Maximize the value of our strategic direct-to-consumer investments, for example with Freshly.
Consumers expect brands to provide solutions based on personal preferences. To connect with them, our brands need to stand out by being relevant, purposeful and distinct. This requires going beyond the product to offer services and experiences that build trust, satisfaction and loyalty. We work with retail partners, influencers and platform providers to deepen our understanding of consumers in each of our categories through data.
Increasingly, our brands employ a data-driven, audience-first approach to tailor messaging to their consumers' needs while respecting privacy. In 2020, 60% of all digital media campaigns leveraged this strategy of personalization at scale. These campaigns are supported by an expanded network of 30 category and market content studios that efficiently deliver dynamic, high-quality personalized content.
To take engagement to the next level, we have begun the rollout of always-on-analytics to monitor digital campaigns and enable our brands to adapt messaging and design experiences based on real-time signals. These efforts allow us to:
- Identify opportunity areas to optimize our messaging in flight.
- Increase the relevance and value of each interaction.
We continue to upgrade our ability to capture and convert intelligence on changes in consumer behavior and market trends to support portfolio and channel mix decisions. A key focus of these efforts is our strategic revenue management program, which now covers the majority of our markets. This capability helps us to define go-to-market strategies and feeds the continuous evolution of brand value propositions, product formats and pricing structures. We are also leveraging artificial intelligence with end-to-end analytics to deepen collaboration with customers, prioritize production and enhance promotion effectiveness. These tools strengthen the ability of local sales teams to:
- Proactively translate our affordable nutrition and premiumization strategies into opportunities for category growth and market share gains.
- Increase the strength and quality of our customer relationships.
Digitalizing our operations
Across our operational network, we are deploying flexible and scalable digital solutions to enhance our responsiveness. These multi-year initiatives are enabling us to better leverage technologies such as artificial intelligence, predictive analytics and collaborative robotics to support factory automation and end-of-line customization. In 2020, we expanded the scope of these programs to increase the flow, accessibility and utility of real-time data in areas such as procurement and supply chain management. These efforts support our drive to enhance:
- Consumer and customer-centricity.
- Manufacturing flexibility and agility.
- Transparency and traceability along our supply chains.
We are also stepping up our capacity to capture and share data across our value chains. We work with supply chain partners to pilot solutions that will better balance efficiency and resiliency. For example, in 2020 we increased the scope of our Transport Hub technologies to cover 50% of our global logistics network. In parallel, we extended the scope of our AI-powered network optimization tools to evaluate different product sourcing and delivery scenarios. This has enhanced our ability to respond quickly to changes in demand and to optimize transport and production schedules. These tools enable us to better service our customers and reduce our operational carbon footprint.
Indeed, beyond efficiency and growth, we see digitalization as an enabler of our sustainability agenda. To that end we are stepping up our efforts to build systems and tools that will enable us to more accurately calculate and track progress in areas such as:
- Sustainable packaging.
- Carbon emissions reduction.
- Water management.
For example, we are working with partners such as OpenSC, a pioneer in supply chain transparency backed by the WWF, to build a fit-for-purpose platform of 'feeding' technologies to increase raw material traceability. In 2020, this work broke new ground by combining proximity sensors (Internet of Things), remote (satellite) and analytic (image recognition) technologies to track palm oil supply chains in Mexico.
Raising the digital expertise of our people
We believe that our people should be empowered by technology. To enable our employees to extract the greatest value from Nestlé's digitalization journey, we have accelerated our efforts to build up their competencies and make them more digital savvy.
Our goal is to equip teams to:
- Be agile with digital technologies and techniques.
- Decide autonomously when, where and how to deploy new capabilities.
We have scaled up our learning platforms and established digital academies. These provide access to relevant, easy-to-consume learning materials that enable employees to acquire applicable digital skills. For example, in 2020, our e-business academy, which focuses on building expertise in search, programmatic media, e-commerce and data analytics, has trained more than 16 000 employees and fully certified 2 700 of our sales and marketing associates.
"The eBusiness Academy has enabled me to learn at my own pace and in a hands-on way, using real-world and concrete examples that I can implement across all areas of my role" – Miriam Bakkali, Associate Marketing Manager.
Built on a gaming format, the e-business academy allows employees to have fun while learning. Users progress with their lessons by collecting points and unlocking badges. Employees, trainees, and apprentices can all gain digital know-how relevant to their role.
"Clearly, digitalization is the way to go to engage with consumers. Yet, in order to succeed, one of our most important assets is our people – current and future employees. We need them to have the right competences and mindset to lead the digital transformation. The eBusiness Academy will play a critical role in this journey" – Yannis Dramis, Global eBusiness Operations & Capability Building Lead.
These academies support continuous digital upskilling and keep our employees in the markets up-to-date with the latest best practices from Nestlé and our technology partners.