CPG Leaders Are Harnessing Data Intelligence to Win

CPG retailers saw their online transactions rise 13% in July 2023 compared to July 2022. During the same period, their conversion rate rose 12%, and their online revenue increased by 5% *..  While inflation is easing, consumers are increasingly shopping online for CPG products. 

At the same time, the compounding effect of inflation across the globe has created a significant decline in consumer purchasing power.  A study by Global Strategic Planner compares the spending power of  $100 USD from 2021 to 2023 and every region in the world has been impacted by inflation on some level.  In the United States, $122 in 2023  is equal to the spending power of $100 in 2021 (India $123, UK $113, Brazil $124, China $101).  In general, inflation is eroding purchasing power and consumers are spending more time researching products online (comparing options and price points) as they move through their purchase journey. 

The landscape is rapidly evolving, consumers are more conscious and new technologies have created both opportunities and challenges.  75% of CPG shoppers said they used digital channels in their most recent shopping journey to become inspired, browse, research, or select a brand**.  Therefore, optimizing digital channels is a high priority for all CPG companies and brands. At the same time, buyer journeys are more complex and multifaceted than they have ever been. Consumers are ultra connected, shifting between devices and online and offline channels. One of the most impactful CPG marketing priorities is the drive to create smooth omnichannel experiences for consumers.

While digital channels and omnichannel experiences are a priority,  CPG companies must also continually evolve their data insights practices.  With large blind spots in online consumer purchase journeys and limited visibility beyond the data provided by retail partners, past data strategies are no longer effective. Further, with the impending phase out of cookies, consumer insight teams must update their data and marketing stacks so they have access to real-time, observed consumer data that is linked to customer purchasing decisions, behavior and intent.  

Traditionally,  large consumer chains and individual retailers have controlled both the consumer purchase data and the path-to-purchase. As a result, CPG brands have relied on their retail partner’s  data along with consumer surveys,  purchased data, and limited information from their own websites. With omnichannel experiences/multiple access points, CPG brands receive data from many sources. The data is not fresh and stitching these  data sources together to generate valuable insights has been and continues to be challenging. However, the emergence of DTC and marketplace ecommerce is a growing trend for CPG companies that will provide increased access to data intelligence.

In the past, understanding the customer path-to-purchase involved conducting a time consuming and expensive purchase analysis to understand how customers discover and purchase products.  Today, the digital purchase journey has many touchpoints that brands do not have control over and at the same time trust is one of the most important factors for consumers.  Insight studies show that customers will read forum posts, product reviews, search on social media platforms, watch YouTube videos and research product ingredients as part of their purchase research.  Along the way, consumers are exposed to sponsored ads for competitive products and search results.  They will enter into walled garden sites like Amazon, Target and Walmart and look at suggested products and product pairings.  

Understanding the touchpoints consumers make online in each phase of the purchase journey is essential for CPG and brands to develop effective marketing strategies. For example, a well known CPG company recently conducted a path-to-purchase study to determine the average number of consumer touchpoints for haircare and deodorant purchases online.  When analyzing  the number of touchpoints consumers make before a  purchase by stage (awareness, consideration and evaluation), the data demonstrates the complexity and depth of consumer purchase behavior today.

According to this recent study by Datacy, the numbers break down as follows for the Hair Care category: 

• Awareness phase: 13 touchpoints
• Consideration phase: 23 touchpoints
• Evaluation phase: 8 touchpoints

And for the Deodorant category:

• Awareness phase: 4 touchpoints
• Consideration phase: 7 touchpoints
• Evaluation phase: 3 touchpoints

The number of touchpoints consumers make in each phase of the purchase journey can vary depending on the product or brand, the consumer's purchase history, and other factors. 

It is imperative that CPG brands have access to their target consumer’s complete path-to- purchase data. This involves first party, permissioned data that provides a 360’ degree view of consumer behavior as they move through their purchase journey,  and the motivations and behaviors that lead to competitive product purchases.  Our team of data insight experts have also learned that a combination of psychographic and demographic data is more accurate than demographic data alone, when understanding our consumers' motivations deeper.  Psychographic data is information about a person's values, attitudes, interests and personality traits that is used to build a profile of how an individual views the world, the things that interest them and what triggers motivate them to action. Having visibility into consumer’s research topics, products that they compare,  items on their shopping  list, videos watched and the products that end up in their shopping carts (including walled garden sites) is incredibly useful intelligence.  

Further, having the ability to determine  if consumer’s purchases align with their personal belief systems (eco-conscious, organic products, products made in other countries etc.).  In the past, this was incredibly difficult to determine with survey data, as people answer surveys with their aspirations (what they hope to do) vs. actual observed behavior.

Renata Naddeo from Shopper Science says "This isn’t just about data collection; it’s about actively listening to the shoppers and putting ourselves in the shoppers’ shoes, grasping their motivations, aspirations and pain points. Only then can we design strategies that not only catch their attention, but also genuinely address their needs' ' and as it relates to path-to-purchase “It has evolved from a linear process to a multifaceted and complex journey. Consumers interact with diverse touchpoints across various channels before making their final decision. Mapping people’s journeys transcends the surface level. It involves pinpointing the critical ‘aha’ moments— those instances where consumers experience a significant shift in perspective or make pivotal decisions. These moments of insight often hold the key to crafting strategies that truly resonate".

With technology advances, CPG insight teams are now able to find answers to specific questions related to their product attributes and features.  For example, a global CPG company recently conducted a digital path-to-purchase panel study to find answers to questions for the hair care category. The panel was made up of their own defined personas and all data was permissioned, first party. The focus of the study was to determine which product attributes matter most when it comes to customer purchase and if there is a link between the product benefits and ingredients.

Here are the details of the study: 

• Panel participants: 1,200 active contributors
• Purchase journeys tracked: 15,000 purchase paths
• Purchase journeys for hair care treatment tracked: 1,925
• Purchases for hair treatment products: 250 verified purchases
• Behavioral interactions monitored: 371 million data points analyzed

*study conducted by Datacy

Every step of the digital consumer journeys were tracked via Datacy’s next gen customer intelligence platform that decodes online consumer behavior. Our tech helps to connect scattered interactions and uncover the patterns and preferences that drive online shopping decisions. Besides the detailed path-to-purchase analysis, the study uncovered the primary decision drivers to purchase, factors leading to purchase drop-offs, and a deep competitive analysis.  

The big picture goal with regards to this digital path-to-purchase analysis is agility, real-time observations that can be used for product marketing, positioning, category development, basket analysis  and online pricing; all in service to grow share in a dynamic and fragmented marketplace. Ideally, the ability to observe what their target audience sees, says and does so they know what is working and what isn’t in the digital market. This means they understand the connection between needs, benefits and purchases among their brands, competitors and categories.

In conclusion, the evolving landscape of consumer behavior in the CPG industry requires an industry wide shift in data intelligence practices. The significant increase in online transactions and revenue for CPG retailers underscores the growing importance of optimizing digital channels. At the same time, the compounding impact of global inflation has prompted consumers to engage in additional research and consideration during their purchase journeys.  As a result, consumer’s purchase paths are complex with many touchpoints and often involve both online and offline channels. CPG companies must continue to evolve their data intelligence practices by leveraging first-party permissioned data to obtain a 360-degree view of consumer behavior.  As Renata Naddeo from Shopper Science notes, actively listening to shoppers and understanding their motivations is key to crafting resonant strategies in this multifaceted and complex consumer journey. The future of CPG audience analytics lies in the ability to decode online consumer behavior, uncover patterns, and leverage real-time observations for informed marketing and positioning strategies. 

Datacy’s intelligence platform and consumer panelist network generates first party consumer data insights faster and more cost effectively than any solution on the market today.  In addition, Datacy helps CPG brands put their consumer panel insights to work by generating actionable strategies that can be used in both the digital and retail store channels. 

The data is always on and always fresh!  

Please reach out to us at datacy.com/contact if you would like to learn more about the case study referenced here or  how Datacy can help take your insights to the next level,  we are always  interested in learning about your upcoming goals and challenges. 

*Criteo Commerce Data - CPG (Food & Non-Food) retailers, July 2021 compared to July 2022. All site types. United States.

**Google/Deloitte, U.S., CPG Digital Influence, CPG Shoppers