3 customer behavior analytics opportunities to watch
For years, CPG brands have been navigating a period of extreme change. Within this shifting landscape, however, there is a new, digitally driven opportunity for growth. The challenge is that few CPG brands have the customer behavior analytics capabilities necessary for a successful digital strategy.
As a recent report from the Grocery Manufacturers Association (GMA) points out, firms are struggling to evolve past localized measurement. Only a handful of organizations have succeeded in developing a full customer view. This gap positions industry front-runners with a competitive edge. Here are three ways that CPG brands can create high-performing digital strategies through full customer pictures:
1. Establish direct consumer relationships
CPG leaders are increasingly relying on technology to build direct relationships with their consumers, a recent report from McKinsey notes. Kraft, for instance, built a website where shoppers can collaborate on recipes. These digital services allow brands to counteract market fragmentation. Rather than relying on channel and distribution partners for data, CPG leaders can create their own consumer profiles, analyzing conversations and responding to needs in real-time.
From this information, CPG leaders are better positioned to deliver promotions that are relevant and driven by their target consumer bases. Market fragmentation stems from consumers' expectations for messaging relevant to their specific needs. Direct relationships will facilitate the process of listening and learning.
2. Forge industry alliances
Today's digital ecosystem has created a paradigm shift for established brands. Take the consumer health category as an example. According to the Boston Consulting Group (BCG), the top five CPG companies have a 30 percent share of brick-and-mortar sales, but only a 19 percent share of online sales. Even the largest CPG brands are limited in their abilities to outpace digital media's seismic shift. The challenge is that data is a form of equity that takes time to build. It will be years until leading organizations have the customer behavior analytics necessary to examine shoppers' full buying journeys.
That's where partnerships enter the picture. CPG brands can consider forming noncompetitive data licensing partnerships to identify promotional opportunities. This research and development process can also inform segment-specific marketing campaigns.
3. Implement location-based services
Mobile is the critical bridge between digital experiences and brick-and-mortar stores. There's a clear opportunity for CPG brands to leverage consumers' smartphone connections during key decision-making moments. As McKinsey points out, mobile "amplifies the impact of direct-to-consumer marketing" by enabling CPG leaders to listen and learn and subsequently target shoppers with relevant offers. As an example, Levi Strauss relies on social media to run location-based promotions.
Through mobile, CPG leaders can refine their customer behavior analytics strategies by collecting a diverse assortment of data. Smartphone cameras, for instance, enable brands to sponsor photo-based promotions. Brands can also equip merchants with apps that track shelf space. According to McKinsey, one CPG leader was able to double its shelf space by collecting and acting upon this data.
When it comes to customer behavior analytics, the future is already here. Facing never-before-seen market fragmentation, CPG leaders will need to catch up by forging direct relationships with shoppers, exploring strategic alliances and embracing mobile as the continuum between the previously disconnected worlds of digital and physical retail.
For more information on how to engage the consumer through targeted campaigns powered by data, explore our Consumer Products Industry page.