CPG Marketing’s First-Party Data Opportunity

Personalization|10 Minute Read

CPG Marketing’s First-Party Data Opportunity

COVID-19 and subsequent shifts in the economy have unequivocally disrupted businesses around the world. Perhaps none so much as the consumer packaged goods (CPG) industry.

As quarantine and social distancing guidelines become increasingly stringent, consumers are not only altering what they are buying, but also how and where they are buying.

In fact, Nielsen reported there was a 91% increase in online sales for CPG brands in March 2020 compared to March 2019. A clear indication of COVID’s impact on commerce today.

To adjust to rapidly changing consumer demands, CPG companies need to pivot their strategies accordingly. And there are a few moves, in particular, these brands can make to grow their bottom lines amid turbulent and uncertain times like these:

Experiment not only with their CPG marketing, but also their sales approaches and business models at large to adjust to consumers’ changing behaviors, which have transitioned overwhelmingly online.

The problem is most consumer packaged goods brands still rely on physical, brick-and-mortar retail stores, and national TV campaigns to market and sell their CPG products.

As a result, they are effectively shut out of the vast amounts of first-party customer data generated online (i.e., who purchases their products, what specific products are bought, how often certain items sell, etc.) their marketing teams need to better understand consumer behaviors, react to disruptive change, and improve their marketing efforts.

That’s why many CPG companies are now working hard on two specific tasks:

Enhancing their digital presence and developing their own direct-to-consumer (DTC) business approaches and, in turn, modifying their CPG marketing strategies — ones now built around owned, consented first-party customer data.

The goal? Become less reliant on retailers, who hold the relationship with the consumer and limit the amount of customer data they share with consumer packaged goods businesses.

That means CPG companies must circumvent the traditional wholesale-retail model and collect data directly from customers to utilize in one-to-one and personalized marketing.

The key to achieving this goal? Using proven, ROI-improving martech that unifies said data in a single, central location and enables real-time data liberation across channels.

cpg marketing

The CPG marketing dilemma: Building a first-party data set and shifting to digital

Look closely at the CPG space, and you’ll see quite a few companies doubling down on digital channels and shifting to the direct-to-consumer (DTC) business model.

And they’re right to want to make this shift.

A handful of McKinsey partners recently noted the growing importance of a strong online presence for CPG companies — one that helps them steadily grow DTC sales and simultaneously provides a high-quality customer experience to their shoppers:

“With customer decision journeys encompassing more digital touchpoints and increasing in complexity, shoppers will expect CPG companies to have a consistent presence online and offline.”

In fact, there are already several compelling CPG marketing and sales success stories in recent years, as it relates to consumer goods companies embracing ecommerce and broader digital transformation throughout their businesses. Take Tide, for instance:

The biggest benefit of elevating and accelerating digital transformation for CPG companies?

The ability to collect first-party data straight from their visitors, app users, and shoppers and utilize that consented data in deliberate, targeted, real-time marketing across channels.

And yet, the complexity inherent in changing traditional business practices has left most consumer packaged goods organizations slow to react to the digital transformation agenda.

As Forbes guest contributor and professional board member Paul Schaut observed:

“Many companies rationalized that embracing digital marketing and ecommerce was important but not a near-term imperative.”

Schaut added COVID-19 has revealed the weaknesses of all companies not able to market, sell, or service their customers through anything other than brick-and-mortar channels.

The slow adoption of digital has had a significant financial impact as well.

According to the World Economic Forum and Accenture, digital transformation in consumer-oriented industries represents a staggering $2.95 trillion in value at stake.

In short, digital is a highly lucrative approach that opens up new customer engagement and revenue growth opportunities for all consumer packaged goods brands.

While there’s certainly some legwork required to digitally transform and eventually leverage first-party data consistently to grow your business, the advantages of reallocating your CPG marketing resources to creating a strong online presence and building a robust customer data set you can activate whenever and wherever you need are clearly many.

cpg marketing

How consumer packaged goods companies can adapt their CPG marketing

Interacting with shoppers on social media, sending text messages to share shipping updates, providing special discounts to loyalty program members: Forward-thinking consumer packaged goods companies with strong online and DTC programs are quite busy, when it comes to CX management and audience engagement.

But CPG marketing organizations can only succeed with these efforts when they have a single source of truth where all shopper data is unified into “complete,” individual-level, customer profiles that persistently update in real time.

Of course, simply analyzing your audience won’t advance your CPG marketing strategy.

You need to continue to “meet” your customers where they are in their unique journeys. Just like leading CPG brands with flourishing online and ecommerce strategies do today.

With that in mind, here are some expert CPG marketing opportunities to explore and advice to heed to remain one step ahead of your competitors, build greater brand loyalty with your target audience, and, ultimately, thrive — regardless of economic conditions.

Establish a first-party customer data strategy.

Many CPG brands know the value of first-party customer data for their businesses today:

  • They understand consented data collected directly from visitors, shoppers, app users, and others engaged with them is vastly superior to hit-or-miss third-party data.
  • They also know relying on retail partners to share all customer data isn’t a sustainable or efficient means to advance their marketing and scale their businesses.

Digital Commerce 360 contributor Sabrina McPherson indicated CPG businesses that assemble first-party data for prospects and customers can “better respond to ever-changing consumer tastes and habits, even to the point of more accurate forecasting.”

McPherson added leading CPG brands with DTC strategies leverage first-party data to:

  • Build new subscription revenue models
  • Enhance their product development
  • And become more agile and flexible

Of course, before a DTC model can be implemented, CPG companies such as yours need to construct a strong digital presence, starting with their website, and audit their martech stacks and marketing use cases to determine where first-party data can be of most use.

Once these areas are addressed — particularly the tech component, given CPG marketing teams need a single source of truth in which to unify all customer data — these brands can start to build their first-party data sets and strategize activation plans.

first-party data

Scale your personalization and engagement approaches.

Once you’ve established a first-party data strategy in earnest, you can begin to incorporate it in every facet of your CPG marketing program. Including and especially your personalized messaging to shoppers and your brand’s customer engagement model.

As noted, the pandemic has changed consumers’ shopping behaviors considerably. Because of this, it’s on CPG marketing professionals such as yourself to adjust on the fly.

The key to winning with your individualized marketing approach is to account for your prospects’ and customers’ unique interests, behaviors, and interactions — and in real time.

For example, emailing specific shoppers (or shopper segments) hyper-personalized recommendations for CPG products you know they’re interested in based on their most recent site activity or suppressing recommendations for items they’ve already purchased can go a long way in proving you care about their CX.

Connecting with your audience via one-to-one messaging that meets their needs and leads to a stellar CX can help you humanize your CPG brand, build long-term relationships with those customers, and differentiate your business from competitors.

Focus on reducing ad spend waste and improving ROAS.

One facet of personalization to focus on improving is your advertising efforts. Specifically, ensuring you get the most bang for your buck with your ads to target customers.

If addressed properly — and with the right marketing technology — your ads can generate considerably better results and improve your overall return on advertising spend (ROAS).

A BlueConic customer in the CPG space, for instance, unifies its first-party data in our CDP and segments its contacts (from anonymous visitors to repeat buyers) based on said data.

This enables them to both craft personalized ads geared toward each distinct audience and suppress ads for segments who’ve expressed little or no interest in the products promoted.

Moreover, the CPG marketing team builds lookalike audiences based on its many segments to identify new, potentially lucrative shopper audiences to whom it can advertise.

A 2020 Innvoid survey found 43% of consumers want personalized ad experiences. The third-most-receptive business category for ad personalization? Consumer packaged goods.

It’s evident consumers want companies of all kinds to serve customer-tailored ads based on where they’re located, products they’ve viewed, and emails they’ve engaged with.

Now, it’s on you and your CPG marketing team to a) onboard the appropriate marketing technology to enable this advertising personalization and b) execute ads that are as applicable and timely as possible to boost your ROI and ensure your spend is well-used.

customer experience

Regularly optimize your online presence for CX.

Even with many brick-and-mortars gradually re-opening the world over, analysts anticipate a long-term pivot to digital shopping across numerous categories, including CPG products.

Regularly enhancing your online presence with the aforementioned tactics and approaches — and, ideally, with a CDP as your central CPG marketing system — can ensure a stellar, CX for your audience and continual growth with your core metrics.

For instance, BlueConic’s enhanced lifecycle orchestration capabilities help CPG marketing organizations set up touchpoints (e.g., personalized interactions on a site or mobile app, emails sent from an ESP, digital ads served through Google) at various lifecycle stages.

As customers complete one lifecycle stage — that is, when an individual engages with designated touchpoints assigned specifically for each stage and completes the desired engagement (clicks, sign-ups, etc.) — customers move to the next lifecycle stage, which features an entirely new set of touchpoints featuring different goals and messaging.

In conjunction with multi-dimensional customer segmentation and artificial intelligence capabilities, brands that use our pure-play CDP — including CPG companies — no longer solely rely on their rigid and restricting campaign management programs to interact with their audiences. Instead, they can adopt a more streamlined and scalable lifecycle management approach that allows them to be responsive to where customers or prospects are in their journey. Having accessible, first-party data leads to smarter segmentation and the ability to optimize advertising and campaigns.

One that can help them capably maneuver the complicated landscape and come out the other side with a more profitable and scalable CPG marketing (and revenue growth) strategy.

Watch our on-demand webinar today to learn how you can take your CPG marketing to the next level with lifecycle orchestration and a customer data platform.

customer lifecycle orchestration

See what BlueConic can do for you.