CPG brands face the challenge of having their products sold across the shelves and online sites of many different retailers, creating a difficult task of piecing together the journey of a customer that purchases a product from the brand. But there is much success to be had for those brands that can overcome those challenges. One driving factor in the quest for increasing CPG sales and brand loyalty is a sound omni-channel strategy. In this blog post, we’re taking a closer look at some of the main challenges CPG brands are dealing with and strategies they can employ to achieve more revenue and deeper relationships with customers.
No direct relationship with consumers
As goods are sold through separate retailers a barrier is placed between the two parties, limiting customer data collection for the CPG brand and hindering positive brand experiences that create loyalty for the customer.
Disintermediated purchase channel
With the same CPG goods existing in a number of different retail stores, it can be difficult to map the customer’s full journey and interactions with the brand. With the number of different in-store and online retail options available for customers to purchase CPGs, successful brands must keep track of multiple data sources to form a single view of each customer.
Tracking marketing efficacy across channels
As there can be a disconnect between a brand’s marketing efforts and the third party retailer that sees the resulting traffic and sales, CPG companies can struggle to understand the marketing ROI.
Proving a product’s worth to retailers
CPG brands often face the challenge of proving a product’s worth to a retailer in competition for promotional and in-aisle shelving space. With sales figures typically fueling the discussion, brands can be left grasping for additional types of data to support their case.
Gather customer data
Creating personalized experiences with consumers starts with intelligent data collection. If you don’t know who your customers are then it will be impossible to deliver timely, tailormade engagements that impact the bottom line. For CPG brands, the most effective way to start collecting customer data is by investing in mobile.
Consumers frequently shop for CPG items in stores making mobile the best, fastest and most efficient way to access potential customers. With mobile, brands can understand customers’ behaviors, preferences and habits, giving them the ability to customize and tailor their approach to give consumers consistent offers and experiences across different channels.
Incentivize customers to reveal themselves
In order to start collecting data on your customers, you need a way to motivate them to self-identify. The best way to do this is through a loyalty program (specifically one connected to mobile) that makes consumers feel valued and offers features that will make consumers’ lives easier and more convenient.
Mobile-first loyalty enhances brand perception, influences a consumer’s decision-making and improves interactions with a consumer throughout their whole path to purchase. Implementing a mobile-first, consumer loyalty program can help increase the lifetime value of a customer, improve the effectiveness of your outreach and grow revenue.
With the first-party data a loyalty program provides, CPG brands can gain an understanding of what products customers are purchasing when and at what retail partner, while also establishing a direct relationship with customers.
CPG brands can start to understand individual consumer’s retail preferences in order to tie campaigns to specific partners and provide reporting and attribution back to the partner to track efficacy. This can then be used to help advocate for additional/better shelf space, etc.
Marketers can also leverage this data to tie specific offers to purchases. For example purchase this size toothpaste within this date range and we will give you a coupon for free tube of toothpaste, or make a purchase of toothpaste at this retail partner and we’ll send you a $5 gift card to that retailer
Create a direct purchase channel through digital commerce
In addition to taking control of sales growth through data collection and mobile-loyalty, digital commerce also provides a significant source of revenue that many CPG brands are neglecting today. A Deloitte study, Digital commerce in the supermarket aisle: Strategies for CPG brands, revealed, “fewer than one in seven CPG executives self-assessed their company’s digital commerce capabilities as “advanced” across 15 digital commerce areas, including e-commerce vision, processes, talent, and having a single view of the consumer.” With consumers embracing digital purchase channels more and more, CPGs that focus on digital commerce now may have a competitive advantage down the road.
Besides differentiation, CPGs stand to gain numerous other benefits from digital commerce. As a 2016 McKinsey study explained “Without digital commerce efforts, CPG marketers have limited ability to develop direct relationships with customers, drive loyalty and advocacy, or collect immediate insights. Spending on digital commerce gives CPG marketers the building blocks to complement their indirect channel strategies with direct-to-consumer (DTC) engagement.”
The CPG industry is more competitive than ever before. In order for brands to survive, they must prioritize an omnichannel strategy that includes a strong mobile presence. This is the only way for brands to start collecting customer data that they can then act on to provide personalized experiences at the moment of impact. By delivering tailormade engagements when it matters most, CPGs stand to gain significant revenue, cross-sell and upsell opportunities and market share in general. Those brands that wait for a digital transformation may find themselves in dire straits within a few short years. Your path to more purchases depends on creating a direct path to purchase. The time to act is now.