Having worked in CPG all my career, which has run parallel to the digital explosion, I’ve always thought I have a pretty good handle on multi, and then omni, channel retailing and how brands can integrate it into their strategy.
However, recently I have started to look beyond distribution or sales channels and started thinking about the meaningful customer conversations brands can have when they take ownership of the direct customer message.
As inflation continues to rise and impact consumers buying habits, shoppers are likely to find their loyalty to brands tested as price becomes more of a determining factor in purchase. This is particularly felt by CPG brands who are already competing in a crowded market where choice is prevalent.
This is why I believe it is critical that CPG brands enhance their retail presence with a cohesive and considered direct to customer strategy.
Whether you have an established direct to customer channel or if you are just dipping your toe in the water here are my thoughts on why this is a journey that you’ll want to be on.
Access to more actionable customer data
CPGs have a wealth of customer data, but it is not always clear how to channel it into improved customer conversations. Building out a DTC proposition allows CPGs to access a full picture of their customer data and economics, rounding out the view they get from other data sources.
With insights into shopper behaviours, CPG brands can anticipate buying frequency, forecast more accurately, and engage more effectively with their buyers.
With data into store-level performance, brands can identify category leaders which can highlight potential for expansion or innovation.
It is important that both in-store and online data is connected and that there is single customer view to make sure you’re delivering the best experience for customers.
When you know your customer better, you understand their true value
Richer customer data can help you better understand the lifetime value of a new customer rather than just looking at the initial uplift in sales.
Not only does this allow you to better forecast future growth and recognise challenges ahead, but will help you understand where to invest your marketing budget.
This way CPG brands can focus their marketing spend to acquire more customers who are more profitable and likely to stay with you for longer.
You can then focus on cultivating those relationships
You get so much value from a direct channel to your customers, whether that’s through your website, emails, or social media. You get to hear directly from your customer on what they like and don’t like, you can create incredible emails that are relevant and personalised, and content on social media that helps create brand advocates.
In turn, customers get a better shopping experience that makes them feel valued and understood.
It is important to know which channels work best for your CPG brand and that your efforts are value-driven.
There is a lot of opportunity now for CPG brands to define their DTC offering and really stand out from their competitors.
Curious to find out more?
Our Teach-In webinar goes through direct-to-consumer models covering merchandising tips, how to communicate with your customers, how to increase customer lifetime value, and lots more. It is a complimentary session, but spaces fill up quickly.