Actionable Insights From APT's Retail Practice

CPGs leverage digital channels to connect with customers

February 11th, 2015 | Posted by Haley Jackson in Manufacturing

While the majority of consumer packaged goods sales are still derived from brick and mortar retail, the evolution of new distribution channels has increased the feasibility of manufacturers distributing and marketing products directly. As previously discussed, CPGs are leveraging these to explore new strategies (e.g., loyalty initiatives, direct shipping services) to more closely interact with consumers. Bolstering online and mobile capabilities can increase access to customer data and enable manufacturers to keep up with consumer trends, such as the growing shift towards shopping in digital channels. Traditionally, digital platforms have primarily served to educate consumers about products, but by enabling online or mobile purchases, manufacturers can collect shopping behavior data directly to learn more about their customers’ preferences. Other potential upsides to leveraging a digital DTC channel include strengthened brand loyalty and engagement and more control over product assortment and pricing.

Numerous leading consumer goods manufacturers, such as Newell Rubbermaid and Anheuser-Busch InBev, are investing in e-commerce strategies to grow direct to consumer sales and strengthen their connection to the customer. For instance, Newell Rubbermaid recently announced it will open an e-commerce hub in New York City, which will double the size of its existing online-focused team. Additionally, Anheuser-Busch InBev is offering one-hour beer delivery through a mobile app to align with preferences of its “20- and 30- somethings” target demographic.

In order to take full advantage of this data collected from digital channels, CPGs must develop a strong analytic capability. Analyzing this data will enable manufacturers to improve product assortment, pricing, and promotions and target marketing campaigns to specific customers based on purchase behavior. Learnings from such analysis can be shared with retail partners and applied across channels to realize the full benefits of employing direct to consumer initiatives.

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