Think People, Not Product
To grow profitability, CPG companies need to increase their focus on consumers, changing the conversation to be more about people and less about products, speaking more sales, less inventory. They need to go more deeply into the data – not only what is being sold but also who buys it, how often, and in what quantity.
CPG companies are getting aggregated retailer data regularly from Nielsen and IRI, but they usually aren’t benefitting from the breakdown that retailers get about their shoppers. CPG companies need to start focusing on consumer data earlier in the process to have the same opportunities as the retailer – the ability to drive sales segment by segment, household by household – instead of line item by line item. More information lets you better manage your campaigns – targeting the people who buy, not just what they buy.
As most CPG companies offer a variety of products across multiple categories, analyzing the consumers’ complete shopping cart can lead to better decision-making with regard to not only offers but also inventory and manufacturing planning. Consumer affinity reports can assist, too, as you can analyze complementary products, such as yogurt and granola, pretzels and beer, etc.
Actual consumer data shows insights that don’t always appear in inventory reports, making it much easier to spot problems. You can see consumers defecting by brands within and across categories, allowing you to take action. Seeing what they are buying allows you to more quickly analyze root cause. Once you’ve mapped the consumers who are defecting, you can specifically focus on them, sending very targeted offers to switch them back or even approach them when they are starting to decrease their spending, before they defect – and then track sales to see which campaigns worked and fine-tune the ones that failed.
Thanks to the shopper insight buzz, retailers who previously didn’t have loyalty programs, and even EDLP-focused retailers, are adding loyalty programs to be able to identify transactions across specific customers. Consumer analysis via personalized marketing systems and/or loyalty program data allow you to look at shopper data from the segment level via basket measurement and down to the shopper level.
By examining spending on the entire shopping basket, it’s easier to understand what sales are increasing and decreasing with regard to money spent per trip. Certain segments of customer may have changed buying patterns altogether because of changes in family circumstances. Segment analysis also allows you to discover frequent, high volume buyers v. occasional purchasers and allows you to target on a personal level accordingly. Individual shopper analysis gives you a sharper picture about what offers work with whom and how.
With customer data, you get a benchmark that allows you to see where you were yesterday, where you are today and set goals toward where you want to be tomorrow. Direct access to the consumer perspective lets you identify your strengths and weaknesses in each category. You’ll be able to benchmark where you are compared to your competitors – and see where your potential is based on their sales.
Consumer reporting allows you to better see how well your new product launches are going, instead of waiting to see when the retailer places an order for more – or none at all. You can see how quickly product is moving and create targeted offers if it isn’t moving fast enough.
With consumer knowledge, you can know what to offer them to increase your presence in their shopping cart. By using the shopper data, you’ll be able to analyze your campaigns as well – how many shoppers saw it, the redemption rate, incremental sales, and how many households purchased your products – allowing you to see the actual ROI of every campaign over the entire lifecycle of the campaign.
Remember, CPG companies make products – for people. Sell to them more effectively, and increase your share of basket.
Chen Katz is VP Sales at Sagarmatha, a market leader in providing mass market retailers with the solution they need to offer true one-to-one marketing to individual customers. www.sag121.com. You can reach Chen at [email protected], US: +1 646 934 6149; +972 9 7445410, Mobile: +972 50 6767139