The business model of CPGs has proved challenging in today's direct-to-consumer, data-driven marketing world. Because CPGs are not selling direct to any of their end consumers, they generally lack first-party data on their customers. This makes it very challenging to understand their end customer, which is at even greater risk as Google contemplates killing third-party cookies.
In the past few months, Mondalez has been experimenting with new ways to reach the customer directly. They recently launched a customizable Sour Patch online store, as well as a customizable Oreo online store. While these new personalized options are aligned with consumer trends, these new DTC channels also provide Mondalez with numerous benefits. These online stores provide an opportunity for Mondalez to learn more about the loyal fans of Sour Patch and Oreo; They can leverage these customer insights for future marketing and product strategy. They also can drive greater product margin, as they do not have to giveaway wholesale margin, discounts or promotional dollars.
Other CPGs have been turning to digital, as well. For example, Kimberly-Clark recently announced the new role of chief digital and marketing officer who will help Kimberly-Clark better leverage their first-party data and customer insights.
While digital is important for CPGs to understand the customer, its also critical for CPGs to be meeting the consumer where they shop. COVID 19 accelerated the pace of digital transformation and increased the amount of online shopping across all categories. As CPGs struggle to compete with digitally-native Amazon private label brands, it will be critical for them to be digitally-savvy to remain competitive.
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