Mapping Your Consumer Data Strategy

Consumer data is more plentiful than ever today, making it tougher to prioritize and decide which strategic direction to take. A unified consumer data strategy allows businesses to draw together data from multiple sources and use this information to manage interactions at every touchpoint. In addition to a unified CDP, leading brands are channeling significant efforts into privacy-preserving technologies such as data clean rooms as a way to safeguard, organize, and segment consumer information. Read on for a practical guide to seeking information from the most valuable sources; the tools that can help along the way; and where leading CGs like Nestlé, Coca-Cola, and Johnson & Johnson are striking gold in the great consumer data rush. Step #1: Invest in Privacy-Protecting Tech to Consolidate, Unify, and Segment Insights Brands increasingly recognize the importance of technologies that unify data, making it easier to segment information into micro-audiences, target product preferences, and deliver more relevant experiences. “What consumers feel about privacy is constantly a moving target. [...] In the long run, firms will benefit most when they are transparent about how they collect and utilize consumer data and give consumers some say in what is collected, analyzed, and shared,” J. Andrew Petersen, associate professor of marketing at the Smeal School of Business at Penn State, shares with CGT. By investing in the right technologies, CGs can expect to amp up personalization efforts across e-commerce and marketing while remaining compliant with privacy laws. However, it’s important to have a robust understanding of how to implement these technologies and ensure skilled teams are assembled and ready to put these insights to work. “These tools can be useful in helping you answer a number of difficult questions as long as you understand what the tools are capable of doing and how to understand the outputs they give you,” says Petersen. “For instance, they can help you gather data that you otherwise would find difficult to capture. They can also help you analyze data, especially unstructured data (e.g., text analysis or network analysis), that traditional methods struggle to deal with." "The challenge is to understand how to use the tools and how to interpret the findings of the tools," he adds. "Often this (lack of) understanding of how to implement and interpret machine learning and AI tools is what makes them not helpful to many [companies].” Over the course of the last two years, Coca-Cola has been working to centralize its data, implementing a new CDP that improves consumer access to hundreds of products while gathering ultra-specific insights from the brand’s 2 billion-strong global customer base. In this case, Coca-Cola homed in on behavioral data to power marketing efforts, increase personalization efforts and boost e-commerce capabilities. Similarly, by centralizing data in a single CDP, the brand’s tech and marketing teams were better able to branch out and cater messaging to specific regions while remaining consistent and transparent. Keith Bartig, director of precision marketing technologies at the Coca-Cola Company, described at The MarTech Conference how they needed to be “very relevant and very precise to be cost-effective with our marketing dollars.” This investment has allowed the company to build towards that goal. Leading consumer goods companies are also finding ways for more visibility into their data sets — and where to make improvements — while remaining compliant with privacy rules. The Clorox Company, for example, is using data clean rooms as a way to make this assessment. In fact, a recent study by IAB reveals two-thirds of privacy-protecting tech users are currently investing in data clean rooms. “Our value all comes from increasing the relevance of our brands, and the fuel for that is data and insights. So anything that changes the environment of data and insights is really important to us,” said Doug Milliken, Clorox VP marketing transformation. He noted that “it's hugely strategic for us to be ready on our front foot for how this environment is going to evolve,” given how swiftly attitudes and laws are changing around data and privacy. Privacy looms large in brands’ minds when data is on the table. And while these considerations are essential, McKinsey predicts that, by 2025, thinking around security will shift from compliance to competency, with AI and automation-driven technologies stepping in to manage these concerns and elevate data resiliency throughout the organization. At this point in time, researchers say, “self-service provisioning portals [will] manage and automate data provisioning using predefined ‘scripts’ to safely and securely provide users with access to data in near real-time, greatly improving user productivity.” Step #2: Leverage AI to Get As Close as Possible to the Voice of the Consumer With the current proliferation of data, separating valuable insights from less important information remains a challenge for CGs. The sheer amount of data at their fingertips also means consumers are hyper-informed, attuned to what they want and eager for a personalized experience. However, within this challenge lies an opportunity to get closer than ever to the voice of the consumer by leveraging the right tech stack. From star ratings to reviews to feedback forms, consumers already offer up their data in a variety of ways. Savvy brands are now evolving the way they think about and use these insights. Nestle, for example, has been tracking customer data using a product sentiment analysis platform that uses proprietary AI and natural language processing (NLP) technology and reviews and ratings to generate near real-time insights into how customers interact with products. The company has used this data to inform fulfillment, packaging, marketing, and product design. With CoffeeMate, for example, the company tracked consumer feedback and noticed shoppers weren’t only using the creamer in coffee, but also in tea and hot chocolate. The brand then leveraged that insight to play out into marketing materials. Nestlé notes that it uses AI to help analyze information on trends, ingredients, flavors, and health benefits from social media, online publications, and other sources, and then clusters the captured insights, which in turn aids idea and trend discovery to fuel product innovation. In using the platform to track star ratings across baby formula categories, the company realized some of the lower ratings were due to damaged packaging. It then reached out to suppliers to improve the process and better ensure the formula tins weren’t getting dented in transit. Julia Ford-Roumani, consumer experience data and reporting manager at Nestlé, also praises how aggregating consumer analytics can help to prioritize. “When you're inundated with data and analytics and insights, it's important to know where the fire is and where it's not and whether a data source is telling you, ‘Oh, yes, you have to go look at this urgently’ or ‘This is a problem that maybe can be deprioritized.’” Essentially, the closer brands can get to the voice of the consumer, the better they’re able to address their needs. By narrowing this gap, brands are also able to see what needs urgent attention. Step #3: Gather Data from a Variety of Sources and Embed Findings Into Day-To-Day Decision-Making There are many challenges associated with creating a mature consumer data strategy — the volume of data to sift through, data sitting in silos, lack of enterprise-wide visibility, and, of course, the ever-present privacy concerns. Coach, Kate Spade, and Stuart Weitzman's parent company Tapestry is leveraging consumer data through the full value chain, weaving data into their day-to-day decision-making, using insights gathered from the consumer data platform to inform product creation and better understand the customer journey. The initiative’s impacts are enhanced by the direct-to-consumer model that the brands built their identity upon. “We understand how customers are coming into our brands, what they're likely to purchase next in terms of driving frequency, and how we engage them more fully in our brand and not just in one product at one price,” said Tapestry CEO Joanne Crevoiserat in a recent earnings statement. Step #4: Keep Pace with Market Changes and Lead with Transparency The pandemic unquestionably changed consumer habits and behaviors. While the initial surge in online purchasing may have waned, relics of pandemic-era shopper habits such as click-and-collect, BOPIS, contactless shopping, and digitally-enabled hyper-personalization remain intact. “Many of the drivers of purchase in given situations have been reprioritized,” Petersen emphasizes. “Customers now value things like health/safety much more than previously given their heightened awareness of viruses during the pandemic. Customers are also now more familiar with new ways of purchasing; for example, forcing consumers to purchase more online during the pandemic has resulted in more consumers continuing to do this.” To remain competitive, brands need to develop the native marketing capabilities to reach and engage with this new breed of consumers, many of whom will frequently use social media to research and purchase a product. In fact, according to eMarketer predictions, 52% of social network users will make at least one purchase via social commerce by 2025. A lot of this depends on getting the initial research right. Given the ongoing volatility of the market, CPGs shouldn’t tether all decisions to historical data, much of which will be outdated or obsolete. “Suppose we were using past market research to make decisions on how to go-to-market to engage customers,” Petersen says. “A lot of this prior market research is far less predictive than it used to be given the underlying changes in firms and consumers. This makes it important for marketers to go back and (re)learn what motivates customers to purchase in different situations, i.e., more prescriptive or descriptive analytics.” Prime example: Both Johnson & Johnson and Mondelez invested in forecasting capabilities that cluster geographical data to identify and map illness trends. By pinpointing data points from millions of households and matching spikes in illness to the corresponding need for products, the two companies can mitigate risk and reduce empty shelves at a time when allergy and flu seasons are historically volatile and unpredictable. By recognizing that illness trends have changed — and continue to fluctuate — they’re remaining responsive and agile in serving consumers. When it comes to consumer insights, consumer goods companies are tasked with balancing the universal with the specific, tailoring their messaging to particular groups or individuals while identifying trends and keeping the bigger picture in mind. By harnessing data from reviews and using product sentiment analysis tools, companies can position themselves closer to the needs of consumers and develop a more nuanced understanding of their target market. From a fulfillment perspective, tracking consumer data trends empowers brands to better their supply chain management strategies, mitigate risk, and reduce stock-outs. Leading CGs are channeling efforts into creating a connected consumer data strategy that weaves together marketing, sales, customer service, supply chain, revenue growth management, and product innovation. This data strategy will not only draw these elements together but also provide the means to capture insights at every point of interaction.

You May Also Like

Colgate-Palmolive Pushes Further Into Decision Intelligence

Kraft Heinz Expands Agile Pods Across Organization