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The “Connected Consumer” Connection

Posted 15 December 2015 9:00 AM by Justin Honaman @MoxieUSA, @jhonaman

A fast-developing relationship exists between the Connected Consumer and the consumer goods (CG) manufacturer. What makes this relationship possible? It’s enabled by mobile and powered by the dual engines of social connections and CG loyalty programs. 

Over time, CG manufacturers have become increasingly threatened by competitive, and often lower-priced, private label brands. To counter this surge, they market brand quality and invest in brand experience with the consumer. This pivot in strategy — paired with the ever-growing number of consumer channels — has created an expanded role for data-driven analytics. Indeed, without them, marketing decisions like the following would be shots in the (frequently real-time) dark: 

1. Dynamic investment decisions – Data-driven analytics is needed to enable on-the-fly marketing investment decisions vs. “stock” marketing program calendars that are often inflexible or centered on rigid, as-is marketing process over data-enabled insights (dynamic decision processes based on changing consumer insights).

2. Cross-channel spend expansion – No longer are the traditional advertising mediums the recipients of marketing spend. Social platforms and mobile technology partnerships are now receiving additional investment — a move also driven largely by analytics on consumer interaction data. While traditional marketing mix models apply, they must expand to accommodate the additional channels and inputs on brand performance.

3. Direct-to-consumer – While still rare — and in most cases a stretch — for CG manufacturers, there are now CG suppliers (e.g., Nike, Levi Strauss) with retail online storefronts who are able to develop a 1-to-1 relationship with consumers. Once these connections are established, they then brand-build, market to and evolve relationships with consumers across multiple channels while still providing a consistent experience. Unlike retail, whose direct-to-consumer relationship rests on product purchases, CG manufacturers are engaging with consumers to promote the brand while gaining insights that may be integrated back into the innovation cycle, the forecasting process or even used to predict out-of-stocks.

The “big data” challenge in the Connected Consumer space is that there is both structured and unstructured data flowing into the marketing department (or their respective agencies). And this data is often not integrated with sales, trade promotion, syndicated and/or POS data. Agency-managed data is limited (and siloed) and typically not all-inclusive of metrics that cross brands, channels and consumer touchpoints. From an analytics perspective, with more data and improved tools for analytics, comes the need for additional business analysis (or even data science) abilities among employees. More specifically, it requires someone who knows how to ask questions of data without seeking out one defined, expected answer.

There are several keys to making a successful transition to a Connected Consumer Connection marketing environment:

> Data-driven – Marketing must press to integrate consumer data in a platform that enables fast access to insights. In a recent Consumer Goods Technology survey of CG manufacturers, only 4% of respondents claimed to have a reporting and analytical environment that allows them to access relevant information in a user-friendly and timely manner. “Some” consumer data is stored with an agency (or with multiple agencies, none of which are connected), while loyalty data is stored with another agency. Best practice organizations are consolidating consumer insights in the cloud (or SaaS) and evaluating methods to bring together consumer data with loyalty data to provide something closer to a 1-to-1 platform for analysis and action. In addition, staffing plans are evolving to move from business analysis (dropping data into Excel and creating pivot tables) to a data science/marketing science model that drives and enables marketing business processes.

> CMO vs. CIO competing priorities – The marketing department has typically managed its investments in brand/consumer/shopper/category separately from IT. The reasons are obvious — control, faster time to market (avoiding typical IT gating processes), preference for OPEX-enabled cloud/SaaS options vs. CAPEX-enabled IT spend models, etc. The “big data” concept is forcing more collaboration across lines of business, and the dynamic tension between marketing and IT will increase as consumer technologies and associated data/insight capabilities grow. The hot topic at the 2013 National Retail Federation (NRF) annual conference was the progressively powerful role of the CMO driving technology business needs for the CIO. As 2016 approaches, CG manufacturers are still not there, yet early signs of this trend exist as marketing departments actively pursue connecting with the Connected Consumer.

> Integrated marketing communication innovation – Targeted communications mean delivering the right brand message content (customized) to the right consumer (targeted) at the right time (localized) in the format/technology (mobility) that is most appropriate to that consumer. Consumer data is the foundation of this communication objective, as are integrated shopper insights (e.g., Nielsen, IRI) and loyalty insights. Integrated data at the detail level enables rollups and planning at strategic levels.

> Linkage to search investment – Consumer insights plug directly into strategies and plans for investments in owned (CG equipment, POS), earned (Facebook, Twitter, YouTube), paid (sponsorships, co-branded investments) and shared (customer partnerships, joint investments) platforms. When integrated into the planning and execution process, CG suppliers drive trial or recruitment and fuel retention.

> Investment in new ways of working with retailers – Retailers with an omnichannel orientation are increasingly investing in methods to meet each consumer’s buying needs regardless of when, where and how that person wants to make a purchase. Retailers are leaning into CG manufacturers to step up, invest in and take responsibility for their in-store presence and service levels. The goal: Maximize success and sales in the store by supporting/enabling flexible shop and purchase capabilities. In general, CG manufacturers are largely behind in supply chain/e-commerce/consumer insight capability investments that enable VMI, consumer insight-driven forecast and replenishment. The rise of the Connected Consumer means retailers will press CG partners to invest in these areas or be left out of the store.

CG manufacturers that embrace the opportunity to connect with their consumers will make significant strides over — and may even overrun — those that decide that the “status quo” works just fine.

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