Today, Consumer packaged goods (CPG) companies are exposed to a host of challenges which include – value-conscious consumers with fast-changing needs, political and economic uncertainty, and intensified cost pressure due to retailer consolidation, to name a few. Also, the surging competition puts further pressure on the companies in the industry. Several CPG players are winning big in the market by leveraging data and analytics to set themselves apart from the rest. Businesses can use data and analytics for setting prices, analyzing shopper attributes, and generating more granular shopper insights. With the right data and analytics tool in place, here are four ways in which CPG companies can tread on the path to success.
Identify Areas of Growth and Align Resources for Them
Top consumer goods companies invest heavily in securing exhaustive data from retailers. Getting access to information on customer shopping patterns such as full-basket and shopper-panel data will help businesses to understand their customers better and expand into high growth areas. The consumer goods industry’s areas of growth include specific channels (omnichannel retailers, regional grocery chains, dollar stores, discounters, and club stores), demographic groups (millennials), and consumer segments (value-oriented consumers). The company can use data and analytics to understand which area of expansion is best suited for them and align the available resources accordingly.
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Data and Analytics in Revenue-Growth Management
Revenue-growth management is the new buzz word in the world of business. Top players in the CPG industry are increasingly investing in advanced data and analytics techniques and cutting-edge RGM technologies for activities ranging from setting everyday shelf prices to trade investments. Data and analytics should play an active role even in adjustments made to the SKU portfolios. Furthermore, to persuade retailers to adopt the proposed changes, CPG companies can cite not only the financial benefits for the retailer but also make use of qualitative consumer research to back the decision.
Adopt Omnichannel Retail
It is believed that e-commerce will be the top driver of change for CPG companies in the next five years. Therefore, it is no surprise that popular CPG companies are partnering with top e-commerce giants such as Amazon. They are also placing bets on sites beyond Amazon. Top companies are planning to increase investment in multichannel grocery, mass, or drug retailers such as Walmart.com and Kroger.com which would yield them good returns in the long run. Consumer goods companies can also use their own e-commerce platforms to attract customers, strengthen their brand presence, collect data and develop insights, and test new products and promotions.
Develop the Right Analytical Models, Tools, and Processes
Successful companies consider data and analytics as critical to business strategy. With the help of the analytical models, tools, and processes, consumer goods companies can easily generate meaningful insights that can assist in decision-making. The city-level and store-level insights generated can also help CPG companies to ascertain what resources to allocate where thereby reducing costs and problems of over-stocking or under-stocking.