So Close – Next Gen Precision Marketing!
AUTHOR: Daniel Rejzner, CEO and Founder, Ourcart
We’re all well aware of the massive disruption the CPG space is going through. More brick and mortar stores have been closed in 2017 than in the financial crisis. E-commerce is booming and will hit 70% of consumers by 2024. Unilever paid $1B for dollar shave club and Amazon $13B for Whole Foods. Above all private label is growing 3 times faster than manufacturer brands and expected to reach 25% by 2027 (Nielsen). In the UK private label market share is already at 45% and in some categories as high as 60%.
In my mind, the importance of private label growth relates to the impact it has on manufacturers – the retailers have become from distributors to competitors. Those who were responsible for promoting our products are now our competitors, promoting their own products.
If we think about it, we must admit it is quite strange having our competitors in charge our sales.
Now, combine these trends with the rise of ecommerce and the amounts of data retailers are collecting today, we get a very uneven playing field.
One of the most apparent examples of this conflict is Amazon. On one hand Amazon sell products like Huggies by Kimberly Clark. On the other hand Amazon are promoting their own white label brand called Mama Bear. Can we really be surprised that all around the Huggies product page, we see banners promoting Amazon’s brand in a very competitive price mark. Now how’s that not a conflict of interest?
Amazon uses their access to Huggies pricing data to offer its own brand at a competitive price. And make no mistake – this isn’t unique to Amazon – this practice is used by online and offline retailers alike.
What can CPG’s do to cope with the new playing field? They need to create an independent personal relationship with the consumer, or in other words – move into precision marketing.
According to Wikipedia, Precision marketing is “A marketing technique that suggests successful marketing is to retain, cross-sell and upsell existing customers. Precision marketing emphasizes relevance as part of the technique. To achieve relevance, Precision Marketing marketers solicit personal preferences directly from recipients.”
There are a lot of ways to do precision marketing such as predictive marketing, social media analysis, database modelling, profile scoring. The three main concepts in precision marketing is existing customers, relevance and personal preferences so you can give consumers what they want.
The fundamental building block for doing any kind of precision marketing is obviously having consumer data. So the question is how to go about sourcing that data. One way is through retailers and the best of them such as Walmart and Kroger have their own platforms.
The second way to get your information is directly from the consumer. Now this is more interesting as strategically speaking that is a much better way for manufacturers to create their own channel with the consumer. The most widely used methodology is to run receipt based promotions. The way is works is that the brand has the ability to make offers directly to the consumer which in turn collects the reward by submitting the receipt as proof of purchase. These activities can take the form of a loyalty program or of cash-back campaigns. It’s a simple methodology to implement and it’s a win win situation. Consumers love it cause they get rewarded for their purchases. Brands love it cause it’s an easy way to get consumers engaged with the brand and they also gather valuable data, all that by creating a direct channel to their consumers with no dependency on the retailers..
There is a massive amount of activity in the space, some best in class examples of how to implement this approach are rewards programs such as Pampers, L’oreal & Huggies. Or alternatively cash back aggregators such as iBotta, Fetch Rewards and the likes.
To summarize knowing who the customer is to the point where real life details are in your CRM is the next step of personalization. That will enable brands to use the most advanced tools in marketing on their own data.
I believe anyone who wants to maintain brand equity has to create that direct relationship with consumers.
The writer is the CEO of OurCart, a company that helps consumer brands, research agencies and cash-back apps across the globe to gain A BETTER WAY OF UNDERSTANDING & ENGAGING WITH TODAY’S CONSUMERS. Providing access to complete customer purchase data for in-depth analysis, modeling promotions and rebates. Ourcart’s unique offering, Chop, brings together performance marketing and trade promotions to help brands establish and maintain direct relationships with their customers.
Ourcart are Silver Sponsor’s for #DMWF Europe on the 25 – 26 November.
CEO and Founder, Daniel Rejzner will be taking a seat on the panel; Customers Loyalty: How to Improve Retention with Personalisation & Digital Experiences within the Digital Experience & eCommerce Strategy track on day 2. For more information and to register, please visit the conference website.