With increasing competition from data-rich digitally native brands, retailers, and even marketplace players such as Amazon’s newly launched food line, Aplenty, it is critical for CPGs to have access to customer data, allowing for creation of more personalized experiences, as well as better products and ultimately a smarter business overall.
Many CPGs turn to DTC as a way to gain more control over customer data and the customer experience. Over the last year, we saw CPGs such as PepsiCo, Unilever, Nestlé, and Mondelez enter the space with unique value propositions such as bundles and gifting. Besides just a unique product offering, another way to be successful in encouraging data exchange that drives value for both consumers and the business is to reimagine existing customer experiences. CPGs should consider the following:
- Consider the entire journey and recognize the many options consumers have along that journey — be there to help them progress through the journey, removing friction and enhancing the experience with selection tools, rich content and always-on self-service support.
- Enable various ways to purchase that are unique to each channel, such as subscription, special offers, bundles, gifting, etc.
- Reward for loyalty by delivering personalized value that goes beyond discounts and freebies.
- Ensure shopping is made convenient by working with partners and retailers to provide multiple options for purchase and last mile delivery or pickup.
- Align with consumer values by providing transparency in supply chain, packaging material, and ingredients. Allow for matching donations and other charitable options.
- Use real-time data signals to manage demand volatility and ensure product availability across all channels to avoid switching.
- Harness the power of data and AI to continually learn, personalize and further optimize the customer experience.
When done right, improved experiences drive a data exchange that can deliver real value for the business across three areas: knowing consumers and deepening the engagement; building and selling better products and services; and understanding and running a smarter business. In fact, a Publicis Sapient analysis shows the following potential:
To be successful in realizing this value, CPG companies need to become data-driven organizations, aligning on a unified data strategy that puts the consumer experience at the center and operating outside of organizational silos. They need to not just take ownership of capturing their consumer data through experiences, but also put in place the technology capabilities and operating model to govern and operationalize the use of data across the enterprise.
In the past several years, CPGs have made big investments in data and analytics, but have struggled to reap the rewards. Data generation and collection is increasing exponentially, and the average company now have over 80 software systems in place to manage this data, but according to a Gartner study on MarTech, 42% of companies believe they are not using their tech stack to its potential and admit that a mere 0.5% of the data collected is actually analyzed and leveraged.
For CPGs to thrive in the future, it’s time for them to take ownership of the experience they are delivering to their consumers. The proper data strategy, technical capabilities and operating model are critical to that success.