Setting the Right Data Foundation for DTC

While once a nearly unfathomable strategy, many of today’s consumer goods companies are taking the leap and skipping the middleman to sell directly to consumers. Reasons for going DTC can vary depending upon the company, its products, and its core consumer, but the benefits of forging direct relationships with consumers can be plentiful. And although motivations may differ, the truth remains that with this new path to purchase comes new data that must be appropriately integrated with traditional sales channels for maximum insight. Even when the DTC goal is not strictly a transaction, optimizing use of this first-party data requires defining a new data foundation. Explore how consumer goods companies like General Mills, Kellogg, and Mondelēz International are defining and developing these DTC data foundations, and learn what CGs must be mindful of on their own journeys. Get Serious About Security Make no mistake about it: Security must be the #1 priority for consumer goods companies when it comes to forging, building, and optimizing 1:1 consumer relationships. Today’s consumers remain wary of submitting personalized information, and shifting privacy laws mean CGs are best off maximizing the opportunities associated with zero- and first-party data. Zero-party data is information customers voluntarily share with the brand. With potential guidelines coming in 2023 regarding third-party cookies, consumers sharing their information is vital to their personalized shopping experience on websites and apps, and zero-party data provides consumers with a feeling of control over their shared data. Techniques such as app registration, social media interactions like polls, and preference centers help encourage customers to share information by being clear in the organization’s intentions to enhance the user’s shopping experience. Specify Your Target Online advertising and data collection have long been in existence, but collecting the right information from consumers in order to impact a sale has historically lagged. Things today, of course, are different, and 47% of CGs say that investing in consumer insights is a top priority. As a result of this growing priority, many brands and organizations are subsequently investing in developing a comprehensive customer data platform (CDP) to effectively analyze information submitted via digital channels to create unique profiles of customer interests and tendencies. An effective CDP allows for efficient and compelling campaign strategy development for businesses and personal commerce experiences for customers. The analytics of CDP data allow for industries to create short-term or long-term shifts in the promotion of existing products, creation of new products and the ability to acquire new consumers. For Mondelēz, leveraging a CDP is enabling it to better understand the consumers who use their products across its portfolio of brands. As part of this, the CDP also helps it understand who within its global company can most effectively use this information, whether that’s a brand marketer or a marketing agency, says Thomas Beetschen, global director of consumer experiences, technologies, and services at Mondelēz International. “The biggest learning for us is to have marketing campaigns that are cool and want to be engaging. It's not just about awareness — you have to be engaging, and therefore it's important to underpin CDPs in those areas,” he notes. “The CDP enables you to do all of the things you wanted to do, but couldn't as a marketer — talk to every single consumer that is willing to talk to you. It's the multiplication capability to do that.” Elevate Your Engagement Strategy As consumers’ comfort with sharing their data evolves, they’re simultaneously expecting personalized experiences from the brands. If they’re going to give away their personal data, the thinking goes, it’s safe to expect they’re expecting something in return — and it’s usually more than just a product. What’s more, consumers prefer brands that treat them as preferred customers. Point programs, tiered programs, spend-based systems, and VIP member clubs that offer special perks can create a feeling of exclusivity. General Mills, which recently launched its first portfolio-wide consumer loyalty program, has created a “win/win’ situation that both raises awareness of its brands and delivers deeper personalization. When looking for inspiration in directly engaging with consumers, it can also be helpful to look at the experts: retailers. For example, beauty retailer Sephora has risen as the industry leader in successfully utilizing personalized data by engaging with its consumers and its loyalty programs. Its website interaction filled with quizzes and recommendations allows for consumers to not be overwhelmed by the vast catalog of products, and the customized mobile offers have produced strong results. While utilizing the Beauty Insider Program and rewarding loyal customers, Sephora also excels by the ease of connecting the loyalty program to purchases made in Kohl’s retail stores. Customers aren’t forced to choose a method for rewards as both digital and in-store purchases complement each other. Thrive Market, meanwhile, is an e-commerce-based grocery retailer that has used its collected data to create a thriving mobile app that allows purchase suggestions from previous experiences. An onboarding data quiz creates an enriched experience digitally that has resulted in strong repeat purchases and considers dietary demands. Some of their common methods to gather this information are collecting onsite search terms, rating leads by tracking opened and unopened emails, customer ratings and reviews, purchasing history with personal information gathered from quizzes, future purchase plans and incentives to join loyalty programs. Its personalized newsletters and email campaigns reflect the onboarding quiz by creating excitement and anticipation for future purchases. Analyze the Data that Matters (Without Getting Lost in the Weeds) While the benefits of going DTC can be clear for many CGs, companies can lack both the required capabilities to merge data in order to achieve consumers’ personalization expectations and the structure to set themselves up for success. The 72% of respondents who believe they need every data point to be successful also believe that the more data they collect, the less benefit they see, according to Gartner. “The two major hurdles that organizations face when attempting to achieve a 360-degree view of the customer are poor customer data quality and the lack of consensus on what exactly a 360-degree customer view is,” noted Lizzy Foo Kune, VP analyst in the Gartner Marketing practice. “Digital marketing leaders hope that this view of the customer will unify cross-functional data in their organizations to drive personalization and retention. However, few are actually successful.” The organizations with a 360-degree customer view share a few themes, the research firm reported. In addition to a consensus regarding the definition of a 360-degree view, they also have been able to overcome data quality issues and implement a cross-functional governance structure for customer data. Build the Right Team to Support the Future Which brings us to our last step on this roadmap: In order to build a proper DTC data foundation, one must also build the right team foundation to execute upon it. For one thing, having the right team structure in place is crucial to readily adapting to consumers’ shifting needs. Even for the companies that don’t wish to directly transact with consumers, forging personalization connections is quickly evolving into nearly a mandate for success in today’s consumer goods industry. Properly leveraging this influx of consumer data is a task best grounded in a strong foundation. At The Kellogg Company, consistency is key when it comes to the back end, noted Lesley Salmon, global CIO, and one of the critical things for the company remains standardizing as much as possible in its DTC efforts in order to optimize its internal capabilities. “The more we can have a common back end, the more it allows me to drive efficiency and effectiveness across my IT function,” she noted. “And in turn, that means we can also drive speed and agility — that is really, really important from a personalization perspective. It also allows us a common approach to data, and the more common approach we can have to that data, the more opportunity we have to drive value from it.” A recent panel of CG leaders sharing their consumer insights journey revealed that Kimberly-Clark stood up a dedicated team to evolve from being “insight heavy but activation poor,” according to Josh Blacksmith, senior director, global consumer relationships and engagement. The Estee Lauder Group’s Kalindi Mehta, VP of consumer foresight and predictive analytics, further reinforced the importance of being able to adapt along with consumer behavior. “Having a team structure and dedicated resources that are focused on indicating the sources and pulling out the insights is going to be super important as we go along,” said Kalindi Mehta, VP, consumer foresight and predictive analytics, at The Estee Lauder Companies. “Otherwise, we’ll never really know what the consumer really wants.” Even for the companies that don’t wish to directly transact with consumers, forging personalization connections is quickly evolving into nearly a mandate for success in today’s consumer goods industry. Properly leveraging this influx of consumer data is a task best grounded in a strong foundation.

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