As legacy industries make the migration to cloud-based digital solutions to run and grow their businesses, Salesforce is hoping that it will get a cut of the action when it comes to their IT investments. The CRM giant has been doubling down on building specialised solutions for individual industry verticals, and today, it is unveiling new business units dedicated to not one but two of them: manufacturing and consumer goods.
The Manufacturing Cloud and Consumer Goods Cloud, as the two new products are called, are the latest in a list of other vertical-specific products the company has created. Other verticals targeted to date include finance, healthcare, media, nonprofits and retail.
The idea behind Salesforce’s strategy to build industry-specific solutions is that while the CRM and sales processes that go into manufacturing and consumer goods do have some aspects in common with other industries, both also have relatively specific requirements, too, around how sales are agreed and clients are managed.
In the case of manufacturing and consumer goods, both are capital-intensive businesses where those working on the physical products might be very removed from those working on sales (not just in terms of job functions, but in terms of the software that’s used to manage each operation), or those who are in the field who are helping to distribute those goods to the people ultimately selling them.
“In the manufacturing industry, changing customer and market demands can have a devastating effect on the bottom line, so being able to understand what is happening on the ground is imperative for success,” said Cindy Bolt, SVP and GM, Salesforce Manufacturing, in a statement. “Manufacturing Cloud bridges the gap between sales and operations teams while ensuring more predictive and transparent business, so they can build deeper and more trusted relationships with their customers.”
In both the cases of manufacturing and consumer goods, Salesforce is not creating these services out of thin air: the company had already been touting solutions for both sectors as part of its bigger push into specific industries. Past acquisitions of companies like Steelbrick — a specialist in quote-to-cash solutions, a cornerstone of how manufacturing sales are made — are likely to have played a contributing role in how the new clouds were built.
With the Manufacturing Cloud, Salesforce says that it has included a feature for sales agreements that link up with a company’s ERP and forecasting software to be able to better predict demand from individual customers as well as the wider market. The services are also coming with more analytical insights by way of Einstein Analytics, and more functionality to work with channel partners. Third parties working with Salesforce on joint solutions using Marketing Cloud include Acumen Solutions, Deloitte and Rootstock.
The Consumer Goods Cloud has some parallel with the Manufacturing Cloud, in that both are targeting businesses that are by their nature and by legacy very rooted in physical goods and are therefore not easily “disrupted” by digital innovation. Indeed, despite all that we hear about the might of Amazon and e-commerce, a full 95% of products are still sold in physical stores. That system has a lot of drawbacks, not least of them being challenges with consumer goods brands having accurate control over how products are distributed and ultimately sold.
“Retail execution remains one of the most important pieces of a consumer goods brands strategy, but so much opportunity is wasted if the field rep doesn’t have the data and technology needed to make smart decisions,” said John Strain, GM and SVP, Retail and Consumer Goods at Salesforce, in a statement. “Consumer Goods Cloud provides these field reps with the tools they need to be successful on the ground while helping build both business opportunities and stronger relationships with their retail partners.”
The company, citing research from PwC, claims that of the $200 billion that’s spent in the U.S. by consumer goods companies each year on merchandising, marketing and sales efforts for in-store sales, some $100 billion of that spend is never used in the way it was originally intended. (That’s one reason so many consumer goods companies have jumped into social media: it’s a way of connecting better and more directly, at least with the customers.)
That represents a huge area to tackle for a company likes Salesforce, and the Consumer Goods Cloud is the start of that effort. The product covers software that addresses areas optimising visits to stores, improving relationships with retailers, using Einstein insights for analytics and ordering software. Partners in the effort include Accenture and PwC.
Another important thing to note here is that Salesforce’s move into the area comes as a competitive strike: Not only are there companies out there that have built products specifically for these markets — Sysco for consumer goods, and Atlatl Software for manufacturing, for example — but Salesforce has to contend with general rivals such as Microsoft and SAP also targeting the same potential customers.
As of last quarter, Sales Cloud now accounts for more than one-quarter of Salesforce’s revenues, but today’s news underscores how “sales” is becoming a more complex and nuanced topic for the company as its business continues to grow, and as cloud-based digital processes become ever more ubiquitous across all sectors beyond simply knowledge workers. As Salesforce builds out more solutions to meet every kind of enterprise’s needs, it’s likely there will be more vertical-specific tools making their way to the platform.
