Regardless of their affiliation, nearly everyone agrees these are big days for Big Data.
According to a recent study commissioned by Wipro, 72% of retailers are collecting and analyzing open data; 78% are collecting location-based information and 64% are gathering social media data. All that info is helping retailers and their suppliers reach new customers, understand consumer behavior and ultimately, boosting sales.
IRI, a Chicago-based market research firm, collects, sorts, analyzes and verifies product price and volume from thousands of grocery, drug and mass merchandisers. That data helps retailers and their suppliers get a better understanding of who’s buying what and where. Now, IRI is determined to give its customers an even bigger, even clearer picture of the consumer.
The company has acquired Aztec, a leading provider of market measurement and related services for CPG, liquor and pharmaceutical manufacturers and retailers in Australia, Canada, Hong Kong, New Zealand, South Africa, Sweden and the UK. What’s more, IRI has entered into a data sharing partnership with comScore and Rentrak. IRI CEO David Appel called the collaboration, “the biggest innovation IRI has done in the past 15 years.”
The relationship provides retailers and CPG companies is a sharper understanding of consumers’ online behavior (via comScore) and media consumption behavior (via RenTrak).
“The consumer path to purchase is extremely complex,” noted Appel. “Yet the media buying process is ancient.”
That’s because fewer consumers than ever are watching traditional TV; instead, they’re opting for online or on-demand viewing options. Through this partnership, IRI can help its customers understand consumers’ activities.
That idea that the consumer is more difficult to track than ever was driven home by Brian Cornell, CEO, PepsiCo Americas Foods, who told the audience that due to the rapid emergence of e-commerce, “we have to rework our playbook.”
PepsiCo did just that by developing novel campaigns that attract consumers’ attention. One of them, Lay’s “Do Us a Flavor,” invites consumers to create new flavors for potato chips. The company ran a similar campaign that asked people to develop a new flavor of Mountain Dew. In both cases, consumers choose between three finalists, with the winning entry earning $1 million for its creator. During Super Bowl Week 2014, PepsiCo saturated the market with promotions for its contests, which have enabled the company to grow sales and capture user data through voters’ Facebook accounts.
“Growth is challenging; we must leverage insights to find new growth,” challenged Cornell. “New models and new data are going to drive the choices that we and consumers make.”
Facebook is a rich source of data for marketers, but the information only underscores how diverse consumers truly are, explained Erin Hunter, global head of CPG marketing, Facebook. She reviewed how the media mix has changed dramatically during the past decade, as consumers spend less time in front of the TV and more time online. Now, even online habits are in transition, as more people prefer to use their mobile device rather than a laptop or desktop.
“Seventy-nine percent of smartphone users keep their phones with them for all but two hours of their waking day,” she noted.
That means not drenching the broadband with a single message; instead, the future is about reaching the right people, at the right time with the right message, according to Hunter. It’s about marketing to a woman, not women. It’s not about looking for a demographic; rather, it’s capturing all the information you can about the individual customer.
“Put the ‘C’ back in CPG,” she advised the audience.
Successful companies will connect with the consumer by telling their brand stories in a way that adds to her day—“not ads in her day,” according to Hunter, who also noted that good creative works regardless whether on television, in print or online.
She detailed how multinationals such Unilever, Walgreens and Kraft have connected with consumers on Facebook and reported that in 70% of cases, sales increased three times or more for a product when it was promoted on Facebook, which uses analytics to deliver specific advertising to individual users.
“Be where people care,” Hunter concluded. “Know your brand voice and amplify your promotions. It’s not revolutionary. It’s about using the right platform to get in front of your customer.”
What’s in It for Her?
Household net worth is at an all-time high and The Great Recession ended in 2009, but you can’t tell that to the millions of families still struggling to make ends meet. According to Jocelyn Wong, chief marketing officer, Family Dollar, they’ve been struggling for more than a decade as the US median household income peaked in 1999 and it’s getting worse as government spending falls for programs such as Supplemental Nutrition Assistance Program (SNAP).
“Households with annual incomes of less than $50,000 a year are left with just $200 a month in discretionary spending,” explained Wong. “But they still describe themselves as middle class. Optimism keeps them going.”
And they keep going to Family Dollar, too.
“They want the best; they can’t afford to have a product fail them,” explained Wong, who pointed out that highly fragrance products such as Tide Simply Clean & Fresh are big sellers.
“If it smells, it sells,” she said.
As passionate as they are about their household and personal fragrances, Family Dollar shoppers are passionate about buying the right products at the right price, and they’re using social media to find them.
“Fifty-six percent of Family Dollar customers have smart phones,” noted Wong.
Other statistics about Family Dollar customer include:
- 31% have kids under 18;
- 56% earn less than $40,000 a year;
- 50% are on government assistance; and
- 66% of shopping baskets are less than $10.
For Family Dollar, that means returning to an every day low price format, expanding product mix, providing Pay Near Me services (to replace money orders) and giving back to the community.
Learn from the Best
Giving back can play a key roll in a company’s success. Diverse companies such as Ikea, Starbucks, Apple and Nu Core Steel share five traits that make them great, according to Jason Jennings, author of best-selling books such as “The Reinventors,” “Hit the Ground Running” and “Think Big Act Small.”
Jennings maintains that the world’s best performing companies:
- Have cultures based on a big noble purpose. A purpose provides a reason for going to work and creates and maintains the momentum. “The right culture is the only competitive advantage,” noted Jennings.
- Make growth a guiding principle. Obviously growth improves the fortunes of all those involved and allows for reinvestment in business. But it also attracts, keeps and grows the right people, according to the speaker. Just as important, it gets rid of the wrong people, he added.
- Let Go. That mean’s letting go of yesterday’s winners, ego and conventional wisdom.
- Make a lot of small bets. For example Starbucks is known for its coffee, but the company has made a killing selling oatmeal, tea and juice. “Great companies don’t get to the edge and force themselves to bet the farm on an idea,” Jennings explained.
- Are led by good stewards. They provide service over short-term, self-interest. Preserve natural and human resources, and are nurturing and selfless.
For more on the IRI Summit, visit Happi.com.