WELEDA expert report: Sustainable Digital Strategy

People at the centre of digital corporate DNA

Every successful company follows innovative paths, but not every industry has yet fully embraced the digital transformation. For example, digitisation plays a special role in companies in the Fast Moving Consumer Goods (FMCG) sector. Traditionally, the production and packaging of fast-moving goods and the needs of the end customer have been the focus of FMCG companies: The consumer receives products of high quality in an attractive design. However, the central task has now become to integrate the high-quality goods into a digital process and to network directly with the end customer.

WELEDA expert report: Sustainable Digital Strategy

Digitisation of the FMCG industry: two challenges

The FMCG industry is already very actively pushing digital topics, particularly in the area of marketing. But two aspects are new to the industry: The first challenge is to develop a digital direct-to-consumer approach - always with the aim of building direct and sustainable end-customer relationships. Secondly, the ability to innovate digital products and services in addition to the innovative power of physical products is becoming more and more central.

Simple shopping experience with Siri, Alexa & Co

In the sales process it is currently essential to establish a digital network with the customer. The consumption of consumer goods in particular has changed dramatically as a result of voice interfaces such as Apple's Siri or Amazon's Alexa. Nowadays, requests can be transmitted directly to digital assistants by voice control. At best, consumers order the new shampoo while they are still in the shower - and buy what is easy to obtain. As a result, even traditional FMCG companies must respond to changing consumer behaviour with a stronger focus on convenience in the buying and usage process - by creating digital products and services.

From physical to digital products

The ability to connect digitally with the customer must become part of the company's DNA, just like the original core competencies of production, packaging and branding. The customer is and remains the focus of our business activities. Manufacturers must increasingly convince not only with physical but also with digital products. The framework for this is an end-customer-centric digital strategy that defines the target image of how a company wants to interact with the end customer in the future. What role should current, and new partners play in the ecosystem? With which value proposition and which interaction model does the company develop and strengthen sustainable customer relationships? These issues must be an essential part of strategy development. Derived from the digital strategy and along the strategic digital fields of action, digital products and services can then be specifically designed and developed in an agile model.

diva-e and WELEDA: common path

The leading brand in the field of natural cosmetics has also followed exactly this path: In its almost 100-year history, WELEDA has always focused on the needs of people - and continues this tradition in the digital age. Based on the values from the founding period, the market leader for natural cosmetics and anthroposophical medicines developed the digital strategy itself in order to innovatively advance its own corporate culture while preserving traditional values. In developing strategies for digital end-customer relationships and accelerating digital innovations, diva-e and WELEDA follow a common path to bring the values to life through the combination of many years of expertise and implementation strength.

Use Case: Innovation and tradition at WELEDA

by Jakob Wößner, Manager Organisational Development and Digital Transformation at WELEDA

Integration instead of confrontation

Innovative digital business models present companies with a major cultural and structural challenge. Previously learned and proven thought patterns no longer work. Developing a confidence in the unknown seems more challenging than ever. Therefore, digital innovations primarily meet with reservations that grow exponentially with the widening gap between the old familiar product portfolio in the real world and the virtual world, and even seem almost insurmountable. Thus, companies are faced with the challenge of firmly rooting digital innovations culturally and structurally and creating acceptance for them among employees. In its digital strategy WELEDA pursues an approach that makes innovations very tangible, emotional, concise and above all integrative. This is intended to create sustainable energy and interest for a joint contribution to the future.

Digital with sense

WELEDA is a pioneer and worldwide leading manufacturer of holistic natural cosmetics and anthroposophical medicines that bring healing, well-being and vitality. The imprint and proximity between man and nature are factors that make the digital appear as a foreign body. Therefore, in the digital transformation strategy of WELEDA the connection to its roots and values is of special importance. The digital is seen as a possibility to help the development of man and nature to a positive symbiosis with a new dimension and effectiveness. In this way, digitisation is transformed from an artificial goal into a useful tool that contributes to something meaningful. The result: employees feel involved in the process and accept the change. This makes them open to new ideas, which facilitates further innovations.

Honesty and confidence are essential

The success of opening up to innovation can be seen in the frequency and intensity of the controversial dialogues. This makes it more important for companies to maintain their identity and remain authentic. For WELEDA, digital ethics, i. e. the company's responsibility in the digital world, the key to responding with integrity to justified uncertainties and fears.

This ethical quality requirement in turn has a positive effect on identification with the process of digital transformation and subsequently also on openness to new developments. This foundation enables us to rethink the connection between real and virtual experiences as well as digital services and the resulting possibilities in a revolutionary way. In this way, we link the digital with our corporate vision: we contribute to a world in which the beauty and health of people and nature are constantly being recreated.

Longing for the big, wide sea. . .

The digital strategy of WELEDA defines three fields of action: a customer-oriented, efficient foundation of processes and systems, future-oriented capabilities and innovative value generation. In order to bring these fields of action to life and make them tangible, WELEDA recalls its roots and uses skills from its founding period. From the very beginning, Weleda manufactured products in its laboratories that were intended to contribute to a healthy society. This mentality and the spirit of that time, especially to act in a socially value-creating way, are essences that we need again in the present time. In the process of change at WELEDA, no artificial attempt is made to create a new culture of innovation, but rather to appeal to an intrinsic competence slumbering within the company, which is adapted to the challenges of the digital world. In this way, we try to anchor the digital in the corporate culture.

Attract instead of repel

In contrast to companies that seek their salvation in Berlin for digitalisation or detached incubators, WELEDA has chosen the path of integrated innovation. The road is longer and more difficult, but for a company that not only praises sustainability as a marketing slogan in its brochures, but actually lives it, this is the right way to go. Nevertheless, a means is needed to make the change visible and tangible. Inspired by the laboratories of the WELEDA pioneer era, these were transferred to the present day and revitalised in the format of the WELEDA Innovation Laboratories Digital (WILD). In addition to the factually logical interest in innovation, the emotional activation and experience of the digital are in the foreground. As a success factor in the digital transformation, change is to be understood as a positive opportunity for the future. Through WILD's appeal to become innovative and free, both the cultural and structural facets of the digital transformation will benefit from this.

The format of the laboratories offers a physical place of encounter and inspiration within the company, so that sceptics and interested parties can get a concrete picture. Furthermore, the laboratories are deliberately designed in such a way that topics from the company are dealt with there. The reference to concrete questions leads to acceptance and activation. The first laboratory was dedicated to the question “which application case can be used to let every WELEDA employee experience the digital?” The experiences from this have led to the realisation that even ideas for new business models can mature from the processing of internal use cases. . . welcome to the digital world of diverse possibilities.

A coincidence does not replace the structured innovation process

The laboratories are a format to provide a channel for the rather chaotic appearing innovation. In addition, we are pursuing a targeted process for digital business model development in line with the values of the digital strategy. The first innovative business model of WELEDA is based on a long-proven and exclusive knowledge that, when interpreted digitally, can lead to a contribution to social development. This idea is in turn combined with the mechanisms of action of digital innovations. Experiences in experiments, start-up cooperations and incremental digital product development are collected and made usable. Thus, the laboratory performs pioneering and fundamental work and creates concrete examples of successful innovation. This creates confidence in one's own strength, which in turn promotes innovation.

Sustainable renewal

The path of renewal and the rediscovery of one's own competencies requires courage and perseverance. WELEDA has taken this path in order to reinterpret itself digitally in the sense of a sustainable development of man and nature and to raise the necessary energy for the transformation. For this to succeed, we must adopt new cultural and structural patterns. Only in this way can digital create positive change for the company and each individual.