How to make better product decisions using big data
Innovation in the CPG industry is critical. Market fragmentation is on the rise, which means that established companies need to create a competitive edge by building new business lines, making informed product decisions and adapting to meet consumers' expectations.
Big data and analytics play a crucial role in this process. The following are three strategic opportunities that CPG executives may want to take advantage of at their organizations.
1. Customer feedback
In the retail setting, where purchase paths are becoming increasingly complex, consumer feedback remains a top priority. It's not enough, however, to simply know what consumers think about their purchases after the fact. CPG leaders need to reinvest this information into future product development, and big data can help with this objective.
CPG leaders should engage with consumers on a regular basis. In addition to conducting market research and opinion studies, organizations can use social media data for real-time feedback, uncovering what shoppers are thinking and feeling in the moment. It's this type of sentiment analysis that can inform decisions about new products and incremental improvements.
CPG brands can also use real-time feedback to identify the products and features that shoppers value most and bring those concepts to market faster. This approach to continuous innovation can expedite the research and development process so products are in the hands of customers sooner.
Thanks to social media platforms like Facebook, Twitter, YouTube and Pinterest, CPG leaders have access to a wealth of consumer-generated data. Many organizations are collecting this information but are unsure of how to use it. A case study presented at The Lean Startup Conference from CPG startup Mighty Handle may help shed some light onto this problem.
In 2014, Mighty Handle faced the biggest opportunity in its company history: a test with Wal-Mart. Wanting to make the most of the opportunity, the Mighty Handle team paid careful attention to its product packaging, but they were faced with the problem that Mighty Handle's customer base was different from Wal-Mart's target audience.
To bridge this gap, Mighty Handle tested several packaging concepts through a series of marketing campaigns, positioned as data-gathering techniques, on Facebook and YouTube. Thanks to this early research, the Wal-Mart test was successful, and Mighty Handle is now on shelves at 3,500 locations nationwide, according to Startland.
With supply chains evolving in complexity, CPG brands need full transparency into their processes. This insight can help guide critical product decisions while improving customer satisfaction. As Food Safety Magazine explains, there is increasing consumer demand for information related to traceability, product safety and sustainable sourcing, and CPG companies that provide this information can bolster consumer confidence in the brand.
To meet this demand, companies need to maintain comprehensive master data on products. This information can help trace activity from the raw-goods supplier all the way through to the retailer, and executives can then identify areas for improvement. Traceability should play a crucial role in the product decision cycle. Data can help improve processes while establishing consumer trust.
Better data yields better products. CPG leaders can guide their product decisions by listening to consumers and using the feedback to prioritize new business opportunities and feature releases. It's a simple strategy that can keep help companies stay competitive for years to come.
Sharpen your consumer products strategy by leveraging unstructured and structured data. Visit IBM's Consumer Products industry solutions page.