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CPG Brands Playbook for Digital Transformation

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CPG Brands Playbook for Digital Transformation BUILDIN CONSUMER PACKAED OODS Brnd Lot Through Digit Consumer Strtegies Table of Contents TABLE OF CONTENTS Executive Summary . 3 Introduction . .4 . Turn Challenges into Opportunities . .6 . Omnichannel Expansion 7 Reallocation of Marketing Spend 8 Increased Personalization Efforts 9 Incentivization and Brand Loyalty 10 The Evolving Path to Purchase 11 CPG Brands Playbook for Digital Transformation . 13. Hone Your Digital Consumer Strategies as You Learn About Your Consumer . 18. Conclusion / About Janrain . .19 . Endnotes . 20. Copyright © 2016 Janrain, Inc. All rights reserved. | www.janrain.com | US 888 563 3082 | Europe +44 208 973 2561 | 2 Executive Summary EXECUTIVE SUMMARY We’re now in an era of digital marketing where Consumer Packaged Goods (CPG) brands have the opportunity to cultivate direct relationships with their consumers. Not just groups defined by demographics, but individual members. Loyalty and trust will flow to those brands who demonstrate they understand their consumers best. The key: Using richer consumer data in more nuanced ways. First- and third-party data from social networks allows brands to attain a degree of clarity about individual consumers that isn’t possible with traditional demographic information. Leading brands are already applying these insights to drive their expansion into omnichannel marketing, guide their budgeting decisions, enhance their personalization efforts, offer more relevant incentives and loyalty programs and tap into new paths to purchase. This white paper outlines concrete first steps borne out of our work with some of the world’s leading CPG brands. Kickstart your digital consumer strategy with these tested, trusted principles. Copyright © 2016 Janrain, Inc. All rights reserved. | www.janrain.com | US 888 563 3082 | Europe +44 208 973 2561 | 3 Introduction INTRODUCTION CPG brands’ long-term success depends on building direct relationships with their consumers Several trends fuel brands’ motivation: • Between 1999 and 2014, 25 percent of product brands fell off the list of top 100 leader brands Over that period, consumer criteria for “leader brands” has shifted from “progressive, dynamic, innovative and up-to- date” to “trustworthy, authentic, reliable and, increasingly, visionary ” • The challenge to keep up with consumer expectations is as valuable as it is difficult: perceived leadership is an important purchase consideration for over 70 percent of consumers ¹ • U S retail store visits fell from 35 billion in 2009 to 17 billion in 2013 ² • The age of the consumer—in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful consumers—has defined the economy for several years ³ • Looking ahead, competition for per-capita consumer spending and 4 loyalty is expected to increase as population growth slows Copyright © 2016 Janrain, Inc. All rights reserved. | www.janrain.com | US 888 563 3082 | Europe +44 208 973 2561 | 4 Introduction The previous trends, among others, drive these five questions that we regularly hear from the CPG industry: How do we earn loyalty and sustain it? How do we create unique brand In spite of their sizable, sustained investments in marketing experiences that make consumers feel 1.and brand building, three quarters of packaged goods 3.valued and keep them coming back? categories have suffered from a decline in ‘must-have’ brand loyalty To stay in step with changing consumer behavior -and consumers’ since 2011 ⁵ emerging preference for experiences as a path to happiness- brands are beginning to experiment with experiential marketing 10, 11 How do we build trust and maintain it? As consumer access to information grows with competition What type of data should we be 2.for their attention, trust is the best way to maintain their seeking? Once we have it, what loyalty ⁶ However, Millennials -now the largest living generation in the 4and5. should we do with it? United States- dislike traditional advertising and put much more trust CPG brands are very sophisticated in the acquisition methods and in information sources that are not actively focused on selling ⁷, ⁸, ⁹ quantity of data assets that they use to understand their consumers and the efficacy of their marketing However, they haven’t historically needed a direct relationship with the consumer We have found that 96 percent of consumers say they receive mistargeted information or promotions, an indication that brands may not have sufficiently personalized, timely consumer data 12 Find answers in a new model While the above challenges stump many CPG brands, early adopters have found ways to turn them into opportunities Copyright © 2016 Janrain, Inc. All rights reserved. | www.janrain.com | US 888 563 3082 | Europe +44 208 973 2561 | 5 Turn Challenges into Opportunities TURN CHALLENGES INTO OPPORTUNITIES Brands that best resonate with consumer lives and maintain the strongest presence in retail channels will be able to demonstrate profitable growth. Consumers’ increasingly connected and idiosyncratic lives make it more challenging for brands to maintain that presence and resonance. Here are five fronts on which we see leading brands rising to the challenge... Copyright © 2016 Janrain, Inc. All rights reserved. | www.janrain.com | US 888 563 3082 | Europe +44 208 973 2561 | 6 Omnichannel Expansion BRAND SUCCESS STORY: Coca-Cola Freestyle Originally introduced as a touch screen soda fountain to foster brand engagement and awareness, Coca-Cola Freestyle has matured into a coherent omnichannel experience The iOS/Android Freestyle apps allow consumers to log in with their Facebook IDs, opening up valuable second-party demographic data to the brand The data captured by the app—found locations, frequency of check-ins, favorite drinks and mixes—gives the brand OMNICHANNEL EXPANSION an unprecedented opportunity to understand As individuals, consumers think of each CPG brand holistically Though individual consumer behavior and target they’re engaging with brands on more devices, they expect a consistent consumers in a myriad of ways based on their declared preferences experience and message Omnichannel expansion isn’t just about meeting consumers on their preferred devices, channels and platforms It’s more than that. It’s the transition away from siloed marketing teams, toward a holistic strategy centered around the consumer . Copyright © 2016 Janrain, Inc. All rights reserved. | www.janrain.com | US 888 563 3082 | Europe +44 208 973 2561 | 7 Reallocation of Marketing Spend REALLOCATION OF MARKETING SPEND Succeeding with an omnichannel strategy will take experimentation In fact, experimenting is the only way to build the new organizational processes CPG brands need . Without experiments, there’s no chance to fail at a small scale and understand what works with consumers’ new behaviors and beliefs This hobbles the ability to grow and innovate The opportunities to foster consumer engagement are causing CPG brands to reconsider how they allocate their marketing budgets: BRAND BEST PRACTICES • Clorox expects digital marketing to comprise 40 percent of its global media budget in fiscal year • Let your consumers influence your 2016, up from 30 percent the prior year 13 decisions More sophisticated CPG brands • 2015, Coty cut out the media agency middle are gaining unparalleled insights into what man entirely when it purchased Beamly, a digital works on new channels and platforms marketing platform 14 by engaging their consumers on a more • Kraft-Heinz has adopted a zero-based budgeting personal level This feedback loop drives framework for marketing They reboot each year’s more informed decisions on media mix budget from the ground-up, rather than building and spend upon the prior year’s budget 15 • Make more small bets Shifting relatively This isn’t necessarily about spending more It’s about optimizing existing spend: small amounts of budget from traditional across channels and across the consumer journey For example, shifting ad channels to relatively new strategies— budget from awareness down the funnel to where consumers are already re-targeting or real-time bidding platforms— offer potential for outsized gains familiar could increase their lifetime value Give agencies more room to experiment Conversely, overemphasis on top-of-funnel awareness, such as driving demand • Reallocating just 1 – 2 percent of a TV with coupons, will crumble under commoditization and consumers’ expectations budget for digital experimentation would for deeper relationships That’s the kind of precipice awaiting brands that don’t fund the chance to discover untapped experiment strategies Copyright © 2016 Janrain, Inc. All rights reserved. | www.janrain.com | US 888 563 3082 | Europe +44 208 973 2561 | 8 Increased Personalization Efforts BRAND BEST PRACTICES • Partner with retailers to share purchase data By streamlining data that has historically been siloed—loyalty, digital offers, mobile data, etc —CPG brands and retailers both gain unprecedented clarity around the consumer Success from this partnership could help alleviate some of the trust issues that have hampered innovation • Inform personalized campaigns with innovative loyalty programs Equipped with a holistic view of consumers, combine purchase history and predictive analytics to create highly relevant emails and INCREASED PERSONALIZATION EFFORTS digital coupons Consider working with retailers who use ibeacon technology Historically, CPG brands have relied on retailers for consumer insights
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