Written By: Vishesh Kumar
Behind-the-scenes story of Retail CPG intelligence and its payoffs
By targeting customers with email, app and social media messages precisely tailored to their interests, demographics, and behaviour, businesses can reduce customer acquisition costs by nearly one-half. So, CPGs, like other businesses sectors, have jumped on the personalized marketing bandwagon with varying degrees of success. With personalization, CPGs can deliver more focused, highly relevant, and all-round experiences (“one-to-one marketing”), so customers can easily tell them apart from plain vanilla competitors. Further, personalized marketing strives to script a seamless and cohesive brand experience for the customer across different channels – such as mobile, app, email, online and store. So, personalized marketing is integral to today’s much talked-up omnichannel retailing, which provides a unified shopping experience across online and offline channels. Personalized marketing involves smartly targeting customers to decipher their habits and preferences, in short, their feelings and emotions when interacting with a brand. This is where AI comes in to provide a booster shot to personalized marketing by helping predict customers’ preferences, habits, other metrics – aka retail CPG intelligence – based on their previous actions on various online media. It’s not just AI-powered personalization and unified cross-channel experiences that will shape the world of CPG in 2024. Customers’ growing environmental consciousness is a rising force for good that retailers can leverage for a much better world.
Challenges/Importance of the Service/Function
AI for certain can’t be wished out of the personalization plans of CPGs this year, given its capability to collect vast amounts of data crucial to personalized marketing. These include all shades of retail CPG intelligence, such as customer demographics (e.g., age, gender, location, income), online customer behavior (e.g., web browsing history, order history, search queries), and social media history (e.g., posting, sharing, liking, commenting, following). Besides, AI gathers background information on the customer (such as weather, time of day). Importantly, many AI/ML tools can plow through product reviews, surveys, social media content, as well as chats with customer support teams. This helps businesses pin down instances of discontent, frustration, antagonism, satisfaction, happiness, excitement, or neutral emotions with respect to their brands. Based on AI-generated retail CPG intelligence – such as fine-grained product recommendations for specific customers, marketers can tailor messages with high levels of personalization.
Long wait time, uninformed sales staff, snail-like delivery pace, and lack of product details! Any friction of this kind, online or offline, can be a jarring experience for the present-day retail shopper. Lack of convenience is a common-enough reason for shopping cart abandonment among online buyers. Lack of product availability and visibility and unhelpful customer service are leading reasons why shoppers storm off from offline stores in frustration. Working toward eliminating as many bits as possible of shopping friction and ensuring a personalized experience across all touchpoints in the purchase journey is key to improving average basket value and profits for retailers. This is what omnichannel retail seeks to achieve, by meeting the customer’s hitherto unmet need for relevant and personalized experiences, convenience, and product visibility. Retailers stand to gain by way of sales and profit rebounds and improved customer lifetime value. Without a doubt, retail CPG intelligence is an important plank in streamlined omnichannel enablement.
Nearly half of all consumers globally are pitching for brands that resonate with their environmental values. By adopting green technologies, retailers can not only live up to their customers’ aspirations but also stay on the right side of climate laws, which now come with a lot of teeth. Investments in renewables like solar and adoption of cloud computing are some of the green approaches popular with retailers. Computing capabilities delivered over the internet minimize the need for carbon-intensive on-premises infrastructure, besides nurturing much greener supply networks. Retailers are also increasingly distancing themselves from plastics, non-biodegradable glass, and Styrofoam, and vigorously embracing biodegradables in their packaging.
How IR can help you
Dynamically evolving consumer preferences are driving fundamental changes to the global retail and CPG industry almost on a daily basis. Highly focused, intensely relevant creatives and promotional campaigns that resonate with specific customer groups are crucial to success in the sector. However, what worked in the past is unlikely to take players in the sector far into the future. Take third-party cookies, for instance. In the past, cookies have helped third-party marketers keep in sight retail buyers’ browsing history, location, shopping cart data, click behavior, and more. The future of cookies is up in the air, with many popular browsers (e.g., Google Chrome, Microsoft Edge, Apple Safari, Mozilla Firefox) restricting or blocking third-party cookies fearing regulatory crackdown and privacy laws. It’s hard, but CPGs need to stay at least a few steps ahead in this cat and mouse game. Our advanced retail CPG intelligence solutions are strictly tailored to help businesses put more skin in the personalization game, build stronger customer relationships, and create more meaningful brand interactions. Backed by more than two decades of firsthand industry expertise, our experts have enabled several marquee clients with the retail CPG intelligence they need to build highly rewarding “1:1” experiences with the customer.
A CPG intersects segmentation with targeted marketing to ensure high relevance
Retail customers expect personal relevance in everything from marketing messages and ads to the products themselves. Most retailers are invested in omnichannel fulfillment, which promises customers a friction-free buying experience across physical and digital channels. Still there is a lot of catching up CPGs must do to close the gaps in shopper expectations. For instance, 7 out of 10 retailers, apart from CPGs, are themselves not quite happy with the omnichannel performance in actual practice! As discussed, the general backdrop of the CPG sector in which our client is placed is nuanced and fraught with difficult challenges. However, on the bright side, the retail market in the developed world is poised for more than 2% CAGR all the way until the end of the decade!
In a highly competitive retail landscape, differentiation was becoming a point of concern for our client. This has implications when it comes to strengthening brand image and driving customer appeal for the business. In the past, CPGs were leaning heavily on competitive pricing and promotions to set themselves apart in the eyes of shoppers. However, the traditional approach seems to have lost much of its sheen in the digital era in which personalization is the differentiation the customer increasingly yearns for. As previously discussed, retail CPG intelligence is the wish fulfilling “genie” capable of delivering on the deepest personalization desires. The client, in this case, looked to pack more punches into marketing, product development, and customer service by personalizing and, by so doing, making them highly relevant for different customer segments.
Our experts applied a three-phased approach to the case at hand. In the initial phase, we set about grouping customers with similar desires, expectations, requirements, and interest in specific products. In the subsequent phase, several key metrics were brought into play to get a measure of how satisfied various customer groups were with the CPG’s products and services. Figuring out the reasons for customer churn was another important activity in this phase. Our market segmentation and analysis as well as retail CPG intelligence now serve as the bedrock for the business’ target marketing and segment-wise customer tracking activities. The client’s marketing initiatives are now more efficient and remarkably simpler, thus saving the CPG scarce marketing dollars.
Personal relevance is the tipping point for retail buyers, and most CPGs are invested in personalized marketing and product development. Curated product assortments, product recommendations, promotions and discounts based on the customer’s browsing behavior and purchase history are all part of this effort. But nothing is ever good enough for the intrepid retail customer, so CPGs know they must do more in product creation, pricing, and promotion to close the gaps in rising customer expectations. This is exactly what our CPG client did – backed by our retail CPG intelligence, with significant dollar savings on the marketing front.