Social Insights/ The CPG Industry The trends accelerating the sector towards social analytics
© Brandwatch.com | 1 Social© Brandwatch.com Insights/ The CPG Industry Executive Summary
Where digitization and the changing consumer has disrupted the CPG landscape, evidence-based insights provide a golden ticket of opportunity. This report addresses the current state of the CPG industry’s analytic maturity and presents ways many companies are finding success from social intelligence.
The changes facing CPG companies in recent years resulted from the industry’s relationships with retailers, the rise of digital sales and marketing, and emerging demand in both developing countries and the increasingly-relevant ‘Millennial’ age-group.
These factors have increased the need, and the opportunity, for players in the industry to devote resources to building customer relationships and keep abreast with their market and demand. Research suggests that moving towards data-driven approaches is both an essential step in addressing this industry’s changes and a growing priority among many CPG companies.
Further research revealed two main objectives CPG companies had when adapting social intelligence: 1. Collect and analyze social data for market research and informed product decisions and 2. Strengthen the relationship between themselves and their customers through intelligent engagement and targeted marketing. Specifically, three use cases were revealed:
• Health and trend surveying • Consumer and market research • Benchmarking business objectives
© Brandwatch.com | 2 Social Insights/ The CPG Industry Contents
Executive Summary �������������������������������������������������������������������������������������������������������������2
Unpacking the Current CPG Landscape �������������������������������������������������������������������������4
Analytical and Social Maturity in the CPG Sector ����������������������������������������������������������5
Leveraging Social Analytics for CPG Business Goals ��������������������������������������������������7
Health and Trend Surveying �����������������������������������������������������������������������������������������������7
Consumer and Market Research ��������������������������������������������������������������������������������������7
Benchmarking Business Objectives ����������������������������������������������������������������������������������9
The Next Stage of CPG Social Intelligence ������������������������������������������������������������������� 12
About Brandwatch �������������������������������������������������������������������������������������������������������������13
© Brandwatch.com | 3 Social Insights/ The CPG Industry Unpacking the Current CPG Landscape
If you work in the consumer goods sector, you’ve likely struggled with maintaining customer relationships. It’s not just you; the industry is changing.
New markets are emerging in developing countries, introducing new consumer demographics for large international companies. Additionally, as millennials become an increasingly prominent percent of CPG purchasers, preferences toward sustainable, convenient, artisan, and healthy products grow more prevalent.1
While the makeup of the average consumer goods customer evolves, how CPG companies interact with their customers must also evolve. Increased online product research, social media marketing, and the reliance on retail shelf space are among the factors disrupting the CPG industry-customer relationships.
CPG companies must proactively build and strengthen customer relationships. Currently, brand loyalty for many consumer packaged goods categories is at an all time low.2 There is an immediate imperative for CPG companies to prioritize market, consumer, and demand research to understand how to address customers’ needs more intelligently. Luckily, as consumers increasingly research, review and discuss products online, social consumer data has become readily available to CPG businesses.
“The ability to slice and dice large volumes of data is great. It makes large- scale campaigns and competitions easy to pull off.”
Digital Executive, Kellogg’s
Social media intelligence is currently a dynamic force for engaging with current and potential consumers, learning about preferences and behaviors, and collecting valuable market data. And the CPG companies that have seen the most success in this pivotal decade are those that have applied analytical approaches to important business decisions.3,4
Most consumer goods firms expect to increase the usage of social analytics over the next year or two to improve engagement and extract valuable insights.5 Even the less socially and analytically mature CPG companies have social intelligence on their radar. The ability for CPG companies to acquire business- driving insights from their customers and the market has never been greater. The next step for CPG companies breaking into this space is understanding what social analytics looks like in their industry.
1 Accelrys. Targeting the Next Generation: Consumer Packaged Goods for Millennials and Teens. 2015. 2 Deloitte. The 2015 American Pantry Study: The call to reconnect with consumers. 2015. 3 McKinsey. Winning in consumer packaged goods through data and analytics. 2016. 4 Capgemini Consulting. Consumer Insights: Finding and Guarding the Treasure Trove. 2016. 5 Accenture. What’s Trending in Analytics for the Consumer Packaged Goods Industry?. 2014.
© Brandwatch.com | 4 Social Insights/ The CPG Industry Analytical and Social Maturity in the CPG Sector
Regardless of industry, companies are increasingly prioritizing their customers, whether it’s building and strengthening relationships with different demographic groups or using consumer preferences and behaviors to direct products or marketing campaigns.
However, the way in which industries approach these initiatives relies on how their customers interact with their products and their brands. For instance, an important drawback CPG companies express as they consider social analytics is the nature and volume of the organic CPG conversations online.
Despite being among the most popular and most frequently purchased products, consumer packaged goods will not garner as much organic conversation as other sectors like consumer electronics. Perhaps for this reason, many CPG companies are very early in their adoption of social media marketing and social intelligence.6
Nonetheless, the average CPG brand on social media can expect to have an audience of millions on Twitter, Facebook and Instagram.7 In addition, CPG outliers like Dove and Ben & Jerry’s, which heavily invest in smart social content, acquire even more followers and receive more engagement from their audiences, exemplifying the power of intelligent social media content. In the following example, Dove’s tweet received 10 times as many retweets as the average CPG brand could expect to have in a given day.8
6 Brandwatch. The Social Snapshot: CPG Industry. 2016 7 Brandwatch. The Social Snapshot: CPG Industry. 2016 8 Brandwatch. The Social Snapshot: CPG Industry. 2016.
© Brandwatch.com | 5 Social Insights/ The CPG Industry Dove @Dove
RT and let the media know that sexist comments about female athletes must stop – right now. #MyBeautyMySay
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Further, too many CPG companies pigeonhole social media as a distribution platform, ignoring the massive power of social data for extracting consumer and market insights. Only half of consumer goods companies currently find success from using consumer insights to improve business decisions, and fewer still use strategic social intelligence and analytics as a consumer insights tool.9,10 Social analytics’ speed to insights, its scalability, and its unfiltered data source should solidify its place at the forefront of CPG businesses’ analytical goals.
In the coming years, the main business priorities of many CPG companies are to build and strengthen customer relationships and develop evidence-based strategies to amplify business initiatives. In order to be proactive when addressing the changing market, CPG companies must now turn business priorities into plans of actions with clear objectives.
9 Capgemini Consulting. Consumer Insights: Finding and Guarding the Treasure Trove. 2016 10 Accenture. What’s Trending in Analytics for the Consumer Packaged Goods Industry?. 2014
© Brandwatch.com | 6 Social Insights/ The CPG Industry Leveraging Social Analytics for CPG Business Goals
Brandwatch works with many CPG brands that pave the way in the utilization of social intelligence. After researching the leaders within and outside our company, three key use cases were revealed that help CPG companies address their unique concerns.
For more information on any of these use cases, see our series of Social Listening in Practice guides.
Health and Trend Surveying
Among the easiest and most common ways CPG companies leverage social analytics is through semi- frequent brand health and consumer trend surveying. These analyses tend to be very similar to one another, and are conducted either on an ongoing, timely basis (e.g. every month or quarter) or after events like conferences or advertising campaigns.
The purpose of these analyses is to get a high-level snapshot of the health of the brands or the success of campaigns. These analyses typically use the same data searches report to report, with minimal changes to the date range or campaign keywords as necessary. By creating benchmarks applicable for ongoing reporting, this “snapshot” reporting can even be automated to expedite the analyses and minimize employee intervention. These analyses can illuminate changes in sentiment about the brand and insights from these snapshots are commonly used as the foundation for more in-depth market research.
Consumer and Market Research
Taking health and trend surveying one step further, social data can provide answers to more robust research questions. Whether informed by health survey results or by R&D teams aiming to expand into a new market, consumer and market research is a common social analytics use case for CPG companies.
Rather than using a similar format for each analyses, this type of research usually occurs in one of two ways:
1. Exploratory research, letting data guide your analyses, social ethnography. 2. Research with a specific research goal, answering a “why” question
The exploratory path is similar to conducting ethnographic research, approaching the analyses without preconceived notions or hypotheses to test. Unlike other ethnographic methodologies, however, the volume of social data available can provide insights into many different populations and human behaviors, while investing less time, energy, and money.
© Brandwatch.com | 7 Social Insights/ The CPG Industry This type of analysis might begin with segmenting conversations by broad categories, like gender, and letting the data inform future research. For instance, the analysis below of the consumer conversations surrounding battery brand Duracell revealed that most of the people discussing the company are female.
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