Top Considerations for Retail and CPG Companies to Leverage Data and Revolutionize Business
For businesses, the global health crisis turned digital transformation from a marathon into a sprint — particularly for retail and consumer goods companies.
Businesses had to quickly condense their road maps for digital transformation, in many cases pivoting from a three-year timeline to a three-month timeline.
While the abrupt race to go digital has been taxing, it has also opened opportunities for businesses to meet customer needs in the new normal. Retail and consumer goods companies are well-positioned to harness powerful technology tools to adapt to the changing demands of their customers.
The first step to getting there? Get a grasp on your data and sure up your foundation first.
In my time working with major retail and consumer goods companies throughout the past year, what stands out is that data really matters. The key to successful growth and survival in a competitive market is your data. As John Sculley, former president of Pepsi bottling, said: “No great marketing decisions have ever been made on qualitative data.”
Here’s what retail and consumer goods marketing teams need to consider when looking across all of their data to set themselves up for success.
Strategy to Unify Different Sources of Data
Today’s marketers have more data at their disposal than ever before. Retail and consumer goods brands can leverage a wealth of data to execute marketing programs, create personalized shopping experiences, and build stronger connections with customers.
Of course, this data doesn’t come wrapped together in a nice package and tied with a bow. Modern marketers need to retrieve their data across an average of 16 different sources, an increase of 60 percent in just two years. The rapid growth in the number of data sources is in part due to increased use of second-party data providers — i.e., organizations that provide data to brands to supplement and enrich the data brands collect on their own.
Many companies find the challenge of unifying their data sources more overwhelming than motivating. This often becomes a barrier to getting started, delaying the ability to find value across integrated data.
Retail and consumer goods brands need to invest in tools that help them unify data from a variety of sources in one centralized location. The first step to getting value out of your data is ensuring that your teams can store, manage and access all of the data at their disposal.
Determine Which Data to Focus On
When looking across all of the data available, it can feel overwhelming to decide which data points are important.
For retail and consumer goods marketers, understanding consumer behavior is essential. Prioritize data that helps you learn how your customer buys. Data around customer shopping habits, trends and preferences will help you build successful strategies for your current product lines and new product launches.
It’s also important to pay attention to data that helps you capture individual buyer differences. While your business serves a targeted customer demographic, keep in mind that there can be wide variations and interests between individual customers. A knowledgeable marketer armed with the right data about different groups of consumers can design separate, personalized marketing programs to connect with each group.
Focus on data that helps you gain deeper understanding about your customers in the following three areas:
- Why they buy: The more you understand about customer motivations behind buying habits, the better you can tailor your product lines and marketing to fulfill their specific needs.
- When they buy: You can increase your chance of success by strategically communicating with a customer around the times they’re most likely looking to purchase.
- How they buy: Use insights into how your customers shop to make the purchase process as seamless as possible, increasing the chance that they’ll want to buy from you again.
Implement Tools to Capture Data Reliably
With the right insight into your customers’ buying habits, you can revolutionize your business. This means capturing customer data reliably is just as important as fulfilling a customer’s order flawlessly.
Despite the wealth of customer data available to brands, the majority of retailers aren't set up for a data-driven model. According to Harvard Business Review’s Closing the Customer Experience Gap report, only 23 percent of retailers say they can act on all or some of the customer data they collect. This means that brands that adopt tools to efficiently gather and manage their data will have a major competitive advantage.
Most retailers know that they need a strategy to effectively capture data — they just aren’t sure how to start. At a high level, your organization needs to take the following steps to effectively capture customer data:
- Identify all of your data collection points.
- Integrate all collection points into one centralized system.
- Set up systems to capture and consolidate data regularly.
Carrying out these three steps is no small feat, but it's very achievable with the right tools.
Peter Nebel is vice president, strategy and practice development at AllCloud, a global professional services company providing organizations with the tools for cloud enablement and transformation.