Though consumer packaged goods (CPG) companies present their products using attractive bottles and boxes, Big Data rarely comes wrapped all neat and tidy. From social media to point of sale (POS) data, the constant flow of consumer information provides companies with a wealth of insight into the customers' journey. Through Big Data, CPG brands gain an understanding of what's going on in the marketplace, as the available insight affords these companies the opportunity to get to know their target audiences.
However, as Daryl Travis, CEO and founding partner at Brandtrust, notes, many CPG companies are drowning in data but starving for insights, as they struggle to apply their new knowledge productively. Looking back, brands across industries will agree that Big Data has always existed. But, as Travis highlights, its presence has merely manifested and grown alongside technology. Today, this information enables companies to create more accurate sales forecasts as point of sale data and customer feedback helps to adjust production volume, distribution, promotions, and pricing strategies. With Big Data capabilities in place, companies are now unlocking creative business strategies, enabling new levels of consumer responsiveness and operational efficiencies by generating powerful insights for personalized customer experiences. But, as E.J. Kenney, global vice president, consumer and distribution industry business solutions at SAP, emphasizes, successful CPG brands focus on three particular areas as they work to leverage Big Data to the fullest extent:
- Consumer insights—By mining new consumer and micro-segment data sources, brands come to understand customers' buying behaviors, thus establishing predictive knowledge of the consumer's needs at a personalized level.
- Customer engagement—Combining social and mobile strategies with Big Data analysis enables brands to deliver new consumer experiences that drive growth and loyalty.
- Operational effectiveness—Increasing speed and visibility of supply and demand signals allows CPG companies to optimize investments and respond to market shifts and consumer demands.
By both managing and leveraging this vast influx of data from both consumer and retail sources, brands have the ability to develop a holistic view of what drives demand as they work to improve customer engagement, understand consumer demand, assess the effectiveness of promotions and advertisements, and maximize marketing and sales results in real time. According to a report published by the IBM Center for Applied Insights, leaders in the CPG space rely on analytics to inform key sales activities. The study, conducted in collaboration with Kantar Retail, reveals that 67 percent of CPG leaders apply analytics to understand the consumer environment, while 61 percent use data to inform distribution planning. The insights gleaned are also used to improve product innovation (59 percent) and share pricing and promotions (54 percent).