Consumers want access to goods and services, regardless of channel. They expect brands to connect with them directly and get new products to market quickly. Plus, they want full transparency about how their products were made. To meet these demands and drive growth, we are accelerating our data-driven digital transformation.
At a glance
Acceleration of e-commerce
In 2021, we launched the e-commerce acceleration initiative, building detailed action plans by market. In 2022, our primary focus was executing these plans to improve e-commerce performance in all markets and categories.
Our 2025 ambition of 25% of sales via e-commerce will impact all markets, brands and roles. As such, a key priority is building e-commerce skills. We have created a global e-commerce community of more than 3000 employees who connect and share best practices, successes and challenges. We are reaching an even wider audience with online webinars and trainings. More than 11 000 people across Nestlé have already attended these events.
Executing online has parallels with offline but requires a different approach to win. While remaining agile, we have defined our vision of perfect shelf execution and have set about measuring this by market and retailer, down to the SKU level. By standardizing and scaling our approach, we can improve digital shelf execution - including content, text, ratings and reviews. To advance our Retail Digital Media we are working closely with our retail partners, adapting our ways of working and developing practices to improve return on investment.
As the retail landscape becomes more fragmented, we have ever more customers and channels to manage. This complexity requires us to do more with less. With Amazon, one of our largest e-commerce customers, we created the Amazon center of scale where we outsource or automate routine tasks to ensure our teams are only working on the most value-adding activity.
Retailer websites, apps and direct-to-consumer platforms are a shop window for our consumers to engage with our brands. Tracking and making continuous improvements at scale help us continuously improve the customer experience and drive sales.
Advancing always-on analytics
Quick access to actionable data insights is key to understanding fast-changing consumer needs and optimizing our demand-generation activities, thus maximizing our resources. We are harnessing the power of data to streamline our business practices, becoming more strategic and predictive while making changes in real time.
In 2022, our analytics capability has been critical to help us navigate an extremely volatile retail environment and rising costs of raw materials. Our data-powered sales and marketing teams have been able to optimize our sales prices and promotional activity while maintaining consumer demand for our brands and products.
Our strategic revenue management program now covers around 95% of our markets. We are also leveraging artificial intelligence (AI) with end-to-end analytics to deepen collaboration with customers, improve product assortment and enhance promotion effectiveness.
To increase the effectiveness of our marketing investment, we are investing in proprietary solutions deployed at scale in many geographies from Indonesia to North America. We recently created a hub for data science in Bangalore. Here, we are developing solutions to track the return on every investment in key Zone AOA markets and building models to predict best investment scenarios that allow us to adjust channel strategies in real time.
With 55% of our media spend invested on digital platforms and exponential need for platform-specific content, we have built a more efficient and agile operating model for creating and optimizing content. In 2022, we further expanded our expertise across the digital value chain and the content studio model: 37 content studios are producing high-quality content 50% cheaper than our previous model. We use AI to track, correct and enhance the relevance of more than 500 000 digital assets per year across the key digital platforms, leading to performance improvement up to 66% in return on ad spend measured across Meta platforms, Facebook and Instagram.
Digitally enhanced operations
We are deploying advanced operational planning technology at scale covering all key areas across our value chain - from demand sensing to production scheduling. The technology allows us to drive agility and resilience of our operations, enhancing our ability to react to consumer demand quickly and efficiently. We have successfully implemented these core capabilities in the United States, our biggest market, and are accelerating rollout with the intention to reach 80% of our businesses by the end of 2025.
Our core digital technologies are now deployed in more than 275 factories in 60 countries, enabling over 50 000 connected workers to be highly productive and autonomous with fast and easy decision making. The data gathered from these technologies is used by AI and predictive analytical tools to enable the delivery of exceptional quality, zero breakdowns, improved energy efficiency and reduced water consumption.
Nestlé is investing EUR 100 million in one of its largest coffee factories in Girona, Spain, installing state-of-the-art digital technology that will accelerate improvement in sustainability, logistics and production capacity.
Our ability to frequently reconfigure the supply networks through digital twins and AI-based optimization methods delivers cost efficiency and resilience in turbulent times. Digitally enabled transport control towers (or T-Hubs) are now deployed in more than 20 locations, manage more than 16 000 trucks daily and cover 85% of our turnover. Capabilities have been built around cost efficiency as well as resilience and responsiveness.
Our journey to warehouse automation is well underway to deliver cost efficiency. These agile operations meet customer requirements while mitigating labor shortage.
Validation of sustainability
Digitalization helps enable Nestlé's sustainability agenda in areas such as sustainable packaging, responsible sourcing, tackling CO2 emissions and water management.
With the help of our greenhouse gas performance system, we are now able to monitor our carbon footprint more accurately, including Scope 3 emissions. In addition to an automated combination of Nestlé spend and activities with the emission factors from relevant external databases, this system enables Nestlé to include primary data about emissions from suppliers and farms.
In 2022, we debuted a new technology to improve end-to-end traceability and substantiate sustainability claims. Nespresso partnered with OpenSC to use their technology to bring greater transparency and accountability to the supply chain for Reviving Origins organic coffee, Kahawa Ya Congo, by using smart devices and QR codes. The OpenSC platform automatically verifies that each smallholder farmer receives the correct Nespresso AAA Sustainable Quality Program premium directly for the coffee they produced - either via mobile money or cash.
Engaging consumers online
Nestlé's online recipe platforms provide an opportunity to connect directly with consumers to gain insights on culinary preferences and drive higher consumption of Nestlé products. In Latin America, our recipe platforms reach more than 100 million consumers annually.
Our Nestlé online recipe platforms allow our brands to engage with consumers directly, inspiring home cooks and foodies. With Rece(i)tas Nestlé, Latin American consumers can tap into more than 20 000 recipes, access how-to cooking tutorials, pose direct questions to our chefs and follow nutritional guidance to create balanced diets for their families.
Nestlé is connecting with communities and influencers to co-create recipes and leverage insights to inform future product innovation. The platforms offer us the ability to collect richer data about culinary preference, which gives us the opportunity to serve diverse audiences with personalized content and choose the best brands for engaging with consumers.
By connecting the platforms with our retailers, we can drive consumers to use shoppable recipes to receive the ingredients directly at their doorstep, creating instant value for all parties involved. We have deployed over 150 recipe websites and created more than 70 000 recipes that are globally accessible through our smart recipe hub back end.
+200 million visits to Rece(i)tas Nestlé in 2022
The Annual Report contains our Annual Review including Creating Shared Value highlights, the Corporate Governance & Compensation Reports and our Financial Statements