In a time of heightened consumer expectations, it’s crucial to create exceptional experiences to stay competitive. According to Forrester, 45% of online adults want to buy directly from brands—requiring consumer packaged goods (CPG) brands to rethink their digital strategies. From modernizing existing business models to upgrading processes and skill sets, digital transformation can help businesses launch revenue-driving direct-to-consumer (DTC) channels.
At Adobe Experience Makers Live event, Farah Aslam, EVP, Business Development at Blue Acorn iCi, and Bruce Richards, Senior Manager Industry Strategy and Marketing Retail & Consumer Good at Adobe, answered CPG industry questions focused on digital transformation. Their insights covered:
- Using data to make your CPG brand stand out
- Connecting with customers in the right channels
- Scaling personalization across the organization
Read the summary below.
How did the pandemic shift consumer behaviors?
The pandemic accelerated the growth of ecommerce. According to Adobe’s data, they believe it would have taken four to six years to reach the levels of ecommerce growth that we saw in May 2020 if it weren’t for the pandemic.
Forced to switch to digital channels early in the pandemic, 40% of consumers discovered and tried new brands. The brands that used personalization to retain new customers quickly saw the benefits. 21% of US consumers switched brands due to relevant messages and promotions. Convenience has also become a deciding factor between one brand over another. Buy online, pick-up in-store (BOPIS) was up 30% YOY last holiday season, and 30% of consumers prefer BOPIS or curbside over delivery.
How are CPG companies pivoting their digital initiatives?
Adobe surveyed CPG brands about what their primary focus would be post-pandemic. The majority of brands that labeled themselves as Digital Leaders said they would focus on attracting and retaining digitally focused talent. Brands that labeled themselves as Mainstream Brands would focus more on overcoming the recession brought on by the pandemic. Bruce believes that legacy CPG brands don’t value digital skill sets as much as Digital Leaders because they haven’t pivoted towards an experience driven culture.
“The experience is the brand.”Bruce Richards, Senior Manager Industry Strategy and Marketing Retail & Consumer Good
Transforming into an experience driven company will help legacy brands reclaim market share lost to digital natives. This transformation often requires hiring the right talent, improving processes, upgrading technology, and improving the data analytics architecture. It’s an investment in time and resources, but a culture that is experience driven can more easily pivot as consumer behaviors change and deliver digital experiences that convert and delight customers.
How can CPG companies improve the customer experience?
Adobe found that 77% of consumers will leave a website if the user experience isn’t what they expect within a minute of hitting the website. From homepage to doorstep, brands need to optimize every step of the journey. Here’s what the speakers recommend focusing on:
- Personalization at Scale: 40% of consumers prefer to shop at brands that offer personalized experiences. Delivering relevant and consistent one-on-one experiences in real-time across the customer journey will help improve conversions and customer loyalty. Adding a layer of artificial intelligence (AI) allows you to predict when and what the customer will need in the future.
- Subscription Business Models: Subscriptions are a win-win for the brand and customers. Brands get a steady, predictable stream of revenue and customer data, and customers receive a convenient, personalized experience. Brands can use the customer data to provide personalized messages, product recommendations, and promotions.
- Engaging Unboxing Experience: When shopping in a physical store, customers benefit from free samples, advice from sales associates, and branded packaging. You don’t always get the same experience when shopping online, so many CPG brands are replicating this in the unboxing experience. Branded packages with samples, product tips, and coupons improve the likelihood of the customer turning into a brand advocate and returning to the online store.
How do you enhance the CPG experience for B2B buyers?
When asked about how the customer experience differs between DTC and B2B, Bruce replied, “Think less about DTC and B2B and think about it from a Person-to-Person perspective.” B2B buyers expect consumer-like experiences, and trends like subscriptions and personalization can apply to the B2B world. For example, Bruce has seen CPG companies offer their dealers personalized pricing and quantity amounts based on their buying trends and trends in the market.
How are brands using the customer data they gather from their DTC channel?
Customer data is one of the most valuable aspects of launching a DTC channel, making it a critical element in building the infrastructure to collect, use, and report on first-party customer data. Once companies have this infrastructure in place, they can build a repository of data that’s shared across the organization and used to drive product and digital initiatives.
“It’s really about the data and having direct communication with the customer, which is by far the most valuable part of a direct-to-consumer store.”Farah Aslam, EVP, Business Development at Blue Acorn iCi
For example, Nestle tested the DTC waters with their brand Dolce Gusto with the primary goal of collecting customer data. By allowing customers to choose and purchase their own variety of Dolce Gusto coffee pods, the brand uncovered buying trends and what flavors customers liked or didn’t like. This gave Nestle the insights to determine what assortments to sell online and in retail stores and what new products to develop—not only for Dolce Gusto but across their brands.
Key Takeaway for CPG Companies
Consumers don’t think vertically. When they have a great experience with one brand, it sets the bar high for other companies regardless of their vertical. As you go through your digital transformation, think about three key areas:
- Do you have the digital skill sets required to launch, maintain, and optimize a DTC channel?
- What technology & processes do you need to upgrade to facilitate data-driven DTC experiences?
- Do you have leadership buy-in and are they driving experience driven culture?
Blue Acorn iCi has helped multi-billion dollar CPG companies plan and implement DTC channels that drive revenue and build lasting customer relationships. If you’d like to speak with a CPG expert to discuss your digital transformation initiatives, contact us today.