Wednesday, November 6, 2013

Reaching the Digital CPG Consumer

In the article, The Decade Ahead: Trends That Will Shape the Consumer Goods Industry, we learnt that the rising digital consumerism is highly likely to significantly impact industry profits. According to US Online Retail Forecast by Forrester Research, there will be a 15% rise in the number of consumers and they will spend up to 44% more in 2016 as compared to 2011 [1]. See picture 1 for more US ecommerce growth statistics.

Traditionally, CPG industries have been hesitant to dip their feet into digital waters. David Berkowitz is a senior director of emerging media and innovation at digital agency 360i and has worked extensively with CPG clients. He says, “If I was a brand manager at a CPG company, I'd have been reluctant to embrace digital until recently”. This is because consumers have been more comfortable shopping CPG goods in physical stores. However, this trend is rapidly changing. According to a PwC report, ecommerce will comprise of 12.3% of consumer spend by 2020. [2]

Ecommerce: Websites:
Digital consumers can be reached by providing their products online. CPG companies can adopt the direct-to-customers strategy by having their own ecommerce websites. Alternately, they can reach digital consumers by selling their products on Amazon and other ecommerce sites.

 To be successful in today’s rapidly changing environment, organizations need to:
  •  Identify customers and their needs
  •  Connect with customers
  •  Innovate products to be aligned to the customers needs and wants. [2]
CPG companies can use digital means to achieve the above.  Some of them are listed below:

Using Big Data to identify customers and innovate relevant products:
Companies can make use of Big Data technology to collect information about consumers. By analyzing this information, companies gain an insight into customer needs, interests and buying behavior. Additional information such as what influences a sale and satisfies a customer can also be obtained. [3]
CPG firms can modify their marketing strategy based on this information. Firms can establish an effective target marketing campaign where a unique marketing message is sent to an individual customer. This can be accomplished using technologies such as email marketing and Google Adwords. Using Google Adwords, messages are displayed to potential consumers when they’re searching for products/services that are similar to those offered by the advertising company. This can be very effective since digital consumers use search engines as the starting point for discovering new products 88% of the time [2]. [x+1], an end-to-end digital marketing solution provider, is helping their clients grow their digital sales by 20%. They achieve this by analyzing massive volumes of advertising data in real-time using IBM Netezza. [6]. Analyzing information about consumer needs, interests and behavior also help innovate relevant products.
Using Social Media to connect with customers:
A huge portion of the information about consumers for Big Data Analytics is obtained through Social Media. Of all the Internet users across the globe, two-thirds use social media. [2] Companies can create their own social media profiles and post information on new products, discounts etc. CPG organizations can gain consumer feedback on desired changes in existing products or new products that users would like to use. Firms can then modify their product portfolio, specifically their product lines, based on this information.
Using Social Media forums, organizations can attract a huge fan base.For example, North Face has over 3 million fans on Facebook, more than 100,000 followers on Twitter, and over 1.5 million views on YouTube.  [4]
Apart from capturing consumer attention, Social Media also acts as a great marketing tool. Tupperware hired social media consultants to boost profits using social media. These consultants launched a social media show called “Tupperware Radio Show”. The show generated €500,000 of new sales over a long weekend in January 2010. [5]

Thus, we can see that CPG firms can reach and attract digital consumers using a variety of digital techniques such as ecommerce websites, big data technology and social media. What other digital means do you think CPG firms can use to reach digital consumers?

Further Reading
PwC, and Grocery Manufacturers Association. Growth Strategies: Unlocking the Power of the Consumer.

[1] Buck, Stephaine. "Mashable." Mashable. N.p., 4 Sept. 2012. Web. 06 Nov. 2013. <>.
[2] PwC, and Grocery Manufacturers Association. Growth Strategies: Unlocking the Power of the Consumer. Rep. N.p.: n.p., n.d. Print.
[3] "The Future of Retail: Big Data and Social Media Pave the Way." Viralheat Social Media Marketing Blog. N.p., 28 Oct. 2013. Web. 06 Nov. 2013. <>.
[4] Tarbaj, Cara. "Social Media Marketing Success Story: The North Face." RSS. N.p., 10 Apr. 2013. Web. 06 Nov. 2013. <>.
[5] McKay, Zoe. "How Social Media Can Boost Profits." Forbes. Forbes Magazine, 09 Oct. 2012. Web. 06 Nov. 2013. <>.
[6] IBM - Big Data Success Stories


     Picture 1: Growth of US ecommerce
     Inforgraphic Source: [1]

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