Manufacturers, driven primarily by buyers shifting to online purchasing, are accelerating ecommerce, according to data and analysis in the forthcoming 2022 US Manufacturing Report from Digital Commerce 360.
And the list of iconic and well-known consumer brand manufacturers prioritizing selling to digital-first customers includes The Clorox Co.
Clorox, maker of bleach and other cleaning products, personal care products and nutritional supplements, has big plans to expand ecommerce—and invest heavily in digital transformation. “We are we’re accelerating investments in our digital transformation to drive increased capabilities, lower costs across our supply chain and improve innovation efforts and our brand engagement activities,” CEO Linda Rendle told analysts on the company’s recent year-end earnings call. For the 2021 fiscal year, Clorox reported that ecommerce, primarily business-to-consumer ecommerce (B2C) and business-to-business-to-consumer (B2B2C) doubled over the past year and now accounts for 13% of total sales. In fiscal 2021, Clorox generated total sales of $7.341 billion, up 10.6% from $6.721 billion in fiscal 2020.
Based on these metrics, Digital Commerce 360 projects that ecommerce sales grew 9.4 times faster than total sales and reached $486.3 million, an increase of 100% from ecommerce sales of about $243.2 million in fiscal 2020. “As consumers have increased their digital usage during the pandemic, we leaned into digital marketing and commerce, resulting in our ecommerce business nearly doubling in the last two years,” Rendle told analysts. “We continue to believe there’s been a shift in behaviors that will advantage Clorox longer-term, including a focus on health, wellness and hygiene, more time at home as well as increased adoption of ecommerce and digital platforms.”
Part of the investment Clorox will make at a time when many manufacturers are dealing with challenging supply chain disruption headaches is investing in new digital technologies such advanced analytics, artificial intelligence and new back-end systems including for enterprise resource planning (ERP). “We are accelerating our transformation through planned investments of about $500 million over the next five years to enhance our digital capabilities and drive productivity improvements, including replacing our ERP,” she told analysts. “This will enhance our supply chain to better position Clorox to meet customer needs, yield efficiencies and support our digital commerce, innovation and brand-building efforts.”
Clorox tends to speak broadly to industry analysts on specific details of its plan to accelerate digital transformation and ecommerce. But the company, according to its fiscal 2021 annual report, is realigning internal personnel and departments to streamline and improve the effectiveness of its digital commerce strategy. “To continue acceleration of our e-commerce business, we created a new organizational model that embeds these capabilities into our business units, integrates key people and incorporates critical elements into all brand strategies and plans, including innovation, packaging, content and supply chain,” Clorox says. “We also created a new team focused on developing the enterprise capabilities required to accelerate e-commerce growth for Clorox and our customers.”
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