Consumer packaged goods (CPG) companies are becoming increasingly data-driven due to the growth of technology and the increasing amount of data available to businesses.
The rise of e-commerce and smartphones have allowed CPG companies to collect vast amounts of data about their customers and purchasing habits. According to McKinsey, around 80 percent of CPG CEOs are looking to data to drive growth.
Isn’t Big Data Dead?
First and foremost, CPG brands need to understand that their data is a valuable asset.
This data can provide valuable insights into customer behavior, preferences, and buying patterns. By analyzing this data, CPG brands can make informed decisions about product development, marketing strategies, and overall business direction. Unfortunately, many CPG brands are not taking full advantage of their data due to a lack of understanding or expertise in this area.
Getting to Know Your Customer
One way that CPG companies use data is to develop a better understanding of their customers. By analyzing data from e-commerce platforms, social media, and other sources, CPG companies can gain insights into what their customers are looking for in a product, what they like and dislike, and how they interact with different brands.
This information can be used to develop targeted marketing campaigns and improve the products. For example, suppose a CPG company finds that a particular product is not selling well in a particular region. In that case, they can use data to determine why and make changes to the product or marketing approach to better appeal to customers in that region.
Maintaining the Supply Chain
Another way that CPG companies are using data is to streamline their supply chain operations. By analyzing data from suppliers, distributors, and retailers, CPG companies can identify bottlenecks in the supply chain and make changes to improve efficiency and reduce costs.
If a CPG company finds a supplier consistently late with deliveries, they can use data to find a more reliable supplier or implement a just-in-time inventory system to minimize the impact of any delays.
Keeping up with the Competition
Data is also helping CPG companies to understand their competition better. By analyzing data on competitor products, sales, and marketing campaigns, CPG companies can identify their strengths and weaknesses and adjust their strategy accordingly.
For example, CPG companies can better understand if a marketing strategy to drive sales. They can use data to determine whether that strategy would be effective for similar products and, if so, implement it themselves.
In conclusion, CPG companies are becoming increasingly data-driven as they seek to gain a competitive advantage in a crowded and rapidly evolving marketplace. By using data to understand their customers better, streamline their supply chain operations, and analyze their competition, CPG companies are positioning themselves for success in the years to come. As technology advances and more data becomes available, the role of data in the CPG industry will only become more critical.
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