3 CPG Challenges Solved By Putting Customers First
The rise of digital commerce continues to pose challenges for how consumer packaged goods (CPG) manufacturers interact with their customers. Yesterday's passive consumer is nearly extinct, while today's customer has unprecedented access to information, ideas, and opinions. Manufacturers can no longer bank on brand loyalty. Modern consumers are picking, choosing, praising, and panning products in near-real time.
While CPG brands continue to face big challenges in this quickly changing landscape, there is a huge opportunity for them to win as well. The key is putting customers at the center of the decision-making process. As outlined in a recent whitepaper by Kimberly-Clark's global head of marketing technology and innovation, Mayur Gupta, here are three essential steps companies must take to put customers first:
Offer an omnichannel brand experience. Traditionally, brands have relied on a multichannel strategy, providing multiple pathways for consumers to research and purchase products. Each channel operated in a silo, making the customer experience feel disjointed, and leading to dissatisfaction.
Over the last several years, successful CPG manufacturers and retailers have adopted an omnichannel approach, allowing for a seamless customer journey across all channels and touch points. In an omnichannel environment, sales promotions, marketing, and loyalty programs are consistent across retail stores, apps, online, and through catalogs. Target, for example, is heavily investing in an omnichannel approach. After offering shoppers free shipping and turning to store inventory to fulfill Web orders, Target saw its Web sales grow by 30 percent in the third quarter.
Move from big data to smart insight. Connecting the enormous amount of consumer data available today to provide an omnichannel journey is easier said than done, and most CPG businesses lack the deep understanding of how to use this data to make improvements. It's not enough to simply consider the behavioral habits of consumers; companies need to know why consumers prefer the things they do—why they shop for certain products online and others in-store, why they join certain loyalty programs, why they prefer one brand over another, and so on. To truly understand their customers, CPG manufacturers need to contextualize their big data with smart insight, the best of which often comes from the customers themselves via engaged, secure, and owned communities.
Direct sales can drive sales (and loyalty). Direct-to-consumer sales are an alluring option for CPG manufacturers. Successfully taking advantage of the opportunities this strategy brings will require putting the empowered consumer at the center of a company's business strategy. One of the most powerful examples of a direct sales success is the Apple store. At the mercy of computer stores to display and sell their products, the company fought to survive against dwindling sales and a tide of public perception that Apple computers were a thing of the past. In 1996, Steve Jobs returned to Apple, and soon after, launched the company's first online store, which did $12 million in sales in its first month.
For Apple, making products available directly to consumers was a crucial step toward revitalizing the brand. Direct sales gave the company control over how its products were displayed, first online and then its own Apple stores, freeing the company to transform itself into one that prioritizes sleek, simple, and user-friendly design from the beginning to the end of the consumer experience. Direct sales gave Apple a competitive advantage over retail stores, enabling the company to sell machines assembled with hardware customized to meet the end user's specific preferences. Ultimately, this strategy helped Apple build closer and more meaningful relationships with its consumers.
Matt Kleinschmit is the senior vice president and general manager of the integrated consumer, retail, and shopper practice at Vision Critical.