Supply Chain Study: Digital Media Reroutes The Supply Chain In Entertainment, Says New Capgemini Survey
The emergence of digital media as a viable platform for movies, television shows, and video games holds the greatest promise for future sales growth in the entertainment industry according to the results of a pulse survey of nearly 100 participants attending the Entertainment Supply Chain Conference Academy (ESCA) conference in Los Angeles this week. According to the survey conducted by ESCA and Capgemini U.S. LLC, one of the global leader in Consulting, Technology and Outsourcing, the primary channels for growth and innovation in the industry are next generation physical DVDs (42%), multi-platform bundling (30%), and on-demand manufacturing (16%).
"This survey shows the home entertainment supply chain is evolving to deliver DVDs and Internet based programming in a seamless fashion to consumers," said Mark Landry, Vice President in Capgemini North America's Telecom, Media & Entertainment practice. "Distributors and retailers are beginning to use technology as an enabler to provide access to content across any channel to any device. This digital convergence will make the entertainment industry think about supply chains in entirely different ways."
Even though digital media has generated the most buzz in the industry and dominates discussion of future growth, the supply chain for the brick-and-mortar retailer continues to be the area of biggest concern for studios and distributors. Participants described returns management (33%) as the number one area for improvement in the home entertainment supply chain followed by retail execution (31%) and warehouse to delivery (18%). An overwhelming number of respondents conclude that the best option for supply chain improvement between the studios and retailers is generic, category-wide point-of-sale data sharing (39%); while others suggest returns and deduction protocol (24%) and scorecards (20%).
"While digital media is not new, the impact of this delivery system on the supply chain is new and significant," added Devendra Mishra, Conference Chairman of ESCA. "This survey shows the entertainment industry must simultaneously enhance the present customer experience in store while preparing for the future when consumers procure, store, and watch entertainment digitally. This is a true inflection point for the industry between the physical and the virtual."
Other key findings from the Capgemini pulse survey at ESCA:
- Participants almost equally suggest SKU proliferation/shelf space allocation (29%), competition between physical and digital (29%) and downward pressure on price points (27%) will have the most impact on the home entertainment supply chain.
- Nearly 36% believe RFID at the item level is the technology that will have the greatest impact on home entertainment supply chains during the next two years, while another 25% say manufacturing on demand and 18% project digital delivery.
- 52% still believe in-store promotional corrugate is an effective use of resources.
About Capgemini
As one of the world's foremost providers of Consulting, Technology and Outsourcing services, Capgemini enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working called the Collaborative Business Experience. Capgemini reported 2006 global revenues of EUR7.7 billion and employs more than 75,000 people worldwide. For more information, please visit www.capgemini.com
SOURCE: Capgemini U.S. LLC