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In Boosting Value for Consumers: Why Consumer Packaged Goods Manufacturers Must Rethink Their Relationship with Consumers and Retailers, Mayur Gupta, Global Head of Marketing Technology and Innovation at Kimberly-Clark, outlines the need for consumer packaged goods (CPG) manufacturers to rethink their relationship with consumers and retailers in the age of the empowered customer.

Gupta argues that one way of doing this is by leveraging smart - not necessarily big - data:

"Big data" or small data (whatever one decides to call it) analytics provide insights and information that were previously laborious or even impossible to collect. More importantly though, the key to enabling a seamless, unified consumer experience across multiple channels today is the smart or "big" use of this new data.

Using data to drive business decisions makes intuitive sense, and connecting multi-faceted consumer data streams can indeed be a powerful way to create a dynamic and holistic view of the consumer experience. But doing so doesn't come without significant challenges.

To turn any type of data into valuable insight, the CPG industry needs to address the following obstacles:

  1. Gaining the proficiency to use data

Using data to drive business decisions requires having the right people in place who have the expertise to transform these data into impactful insights proficiently. The right team or person recognizes the power of big data and acknowledges its limitations. More importantly, CPG manufacturers need insight professionals who are not only proficient with data but also have a business mindset and industry context. After all, data is only meaningful if it helps CPG companies solve business problems.

  1. Understanding the "why" of customer behavior

Consumer behavioral patterns aren't enough to meaningfully use big data. Here's what Gupta has to say in the white paper:

"CPG manufacturers also need to understand the why of consumer behaviors. What do consumers want and what drives their choices? CPG manufacturers will need to go beyond big data sets generated by social media platforms and online shopping habits, and penetrate consumer insight communities of engaged individuals from relevant demographics in order to thrive in the future. It's a mindset shift that's needed from big data to even bigger testing and bigger learning."

While social listening and other big-data programs can tell you what people are doing, they don't necessarily reveal why people do what they do. This deeper understanding of your customers' motivations and attitudes is truly the 'secret sauce' in contextualizing behavioral data for greater predictive impact. Both CPG manufacturers and retailers alike will benefit from this well-rounded customer intelligence to help drive better business decisions.

  1. Pacifying privacy concerns

CPG manufacturers also need to balance their need for data with the increasing concerns of consumers about privacy. Gupta says:

"CPG manufacturers risk losing the trust of valued consumers if they feel that hyper-personalized promotions blur the line between helpful familiarity and surveillance. The strategic application of data analytics can give CPG manufacturers a competitive advantage but the trust of the consumer is of equal if not greater value."

Companies should strive to use data analytics in a way that respects privacy and also serves the customer. At the very least, collecting data should provide tangible benefits for customers.

While CPG companies are beginning to embrace a data-driven mindset, addressing the above challenges head on will help them to develop an organizational model for delivering a smoother and a more enjoyable experience to the people they need to serve: today's empowered customer.

How to Keep Pace with the Evolution of the CPG Industry

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