Guest post by Gib Bassett (@gibbassett), Global Program Director, Consumer Goods, Teradata

There’s no question that the shopping journey has been disrupted by consumer behavior in online, social media and mobile channels. What’s less certain, especially within the branded consumer products industry, is the best way to serve this now commonplace “connected consumer.” The pursuit of this answer, and the quest to learn more about connected consumers, is commonly referred to as “digital transformation.”

Consumer products manufacturers in food, beverage, health and beauty, and apparel segments are like well-oiled machines, down to the execution of sales with retail partners. Marketing has almost always exclusively supported sales at retail by creating brand awareness. In the past, this took the form of print and television advertising; today it also includes creative served in a more targeted fashion via online display. In spite of this, sales growth remains an industry-wide challenge and marketing is under a microscope.

Brands also are very much engaged in email, website and social media campaigns. Like display advertising, these tend to be an extension of the “marketing as retail support” model. We’re all familiar with email and mobile coupons, website or SMS promotions, mobile apps, and other demand-centric tactics.

Truths

All of this activity overlooks how digital channels have changed shopper behavior. Google’s Zero Moment of Truth and Brian Solis’ Ultimate Moment of Truth illustrate how out of date an in-store and shelf-only view of consumer decision making has become. Also, consider a couple of consumer goods “industry truths”:

– There are a lot more SKUs than in the past from both brands and retail private labels. So consumers have more choices while brands face the challenge of standing out from the crowd. Plus, price still rules for most purchase decisions.

– Consumers tend to buy the same items repeatedly. While coupons help increase consumption, they do so at the expense of already slim margins. The inverse problem is that introducing a new product in pursuit of sales growth faces less than favorable odds at getting added to the shopping list or being purchased on impulse.
More competition and difficult-to-influence shopper behavior makes for a poor fit with display advertising. Awareness and (maybe) a click are the extent of interactions with the consumer.

Conversations

In order to drive demand amid a market of connected shoppers requires engagement with consumers in an ongoing dialog at many points along the purchase journey. The programs succeeding today attempt brand conversations with individual consumers about how even the most utilitarian product lives within and adds value to their lives. Content is not about product features or price – it’s about the individual consumer. Tactics like coupons, promotions, and mobile apps form part of the story developed to convey brand value.

The difficulty in doing this well lies in the details; how do you create relevant messaging for individual consumers that encourages dialog with the brand and sharing among friends, at a scale equivalent to the millions of households reachable via a television spot?

Analytics-driven multi-channel marketing has long served other business-to-consumer industries able to close the loop on their marketing to affect a measurable sales transaction. It’s therefore easily justified.

CPG marketers don’t have this luxury. At best, sales information comes from anonymous and aggregate data some retailers share in the name of volume and category growth. This is why the “easy” digital route is online display media supported with tactics.

Content Beacons

Visionary CPG companies recognize the value of applying multi-channel marketing techniques to the challenge of connecting with consumers without a line of sight into directly correlated sales transactions. They seek to enable their brands to tell stories and measure consumer engagement as a means of optimizing marketing content investments.

Millions are spent on content creation and propagation across many channels and media. Multi-channel marketing concepts can be fitted to this alternate use case by helping brand marketers understand the contribution of content investments to an engaged audience of individual consumers. It’s like placing iBeacons on branded content such that marketing spend can be optimized around the messaging that connects best with consumers. Metrics such as open rates and website visitor dwell times become indicators of content quality comparable on a relative basis.

It takes a blend of informed creative brilliance and technology enablement to pull this off – key is informed. To these ends, it’s essential to reign in the insights digital channels capture to fuel a profile of individual consumers that lives, grows, and evolves just like the person it describes. These insights help both agencies and brand marketers inform brand storytelling with knowledge of their consumers beyond superficial characteristics. In this way, you could say consumers help write the story.

Changing Course

Re-prioritizing around direct, data driven brand marketing isn’t as difficult as it seems. Much of the data to seed an initial snapshot of individual consumers exists; it’s just scattered in various places inside and outside the company and needs to be brought together in a single place. The harder part is implementing the processes necessary to ensure that the contributors to this insight (agencies) adhere to some level of standards with respect to data formats and collection frequency.

Agencies can also be a source for justifying a move to more direct consumer connections. Even brands within the same company tend to work with different agencies or services companies, each of whom gladly bill for repetitive technology development that could be standardized. Without hampering the creativity at the heart of successful brand storytelling, standards can drive significant costs out of website development, data collection, consumer database work, email marketing and mobile messaging.

The upside to brands is more useful and consistent analytics to measure the contribution of content to audience engagement. As shopping decisions shift to an Ultimate Moment of Truth where consumer-generated content becomes the “moment,” brands should find the ability to optimize content around an engaged consumer a valuable commodity.

Download the report about how companies are pursuing digital transformation in detail here.

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