Is your CPG company on the fence about data?

gen_d_industry_heatmap_got_dataNot long ago, the typical sales channels for consumer goods companies included their age-old distributors, wholesalers and retailers. Consumer touch points for these companies were pretty much limited to consumer surveys, advertisements (both print and TV) and product trials. But the wheels have turned.

Consumer buying has transformed significantly – from the usual process of seeing an ad and going to the retailer to buy the product to browsing product reviews online, comparing product features and prices and seeking feedback from social media channels before making a purchase. Consumers are no longer dependent on what a company claims about their products; instead, they are relying on their own Internet research and what other actual users are saying about the product online. As a result, the digital channel has rapidly emerged as a key way for consumer goods companies to interact with existing and potential customers.

These growing numbers of interaction points are forcing companies to rethink their strategies for engaging consumers. It has become critical for these companies to gather and analyze data from many touch points, with the brand and the product, to generate insights and understand buying patterns.

Dealing with data is not new for these companies; CPG is arguably one of the first industries to use data to understand consumer buying behavior and create targeted marketing campaigns. But now with the emergence of so many consumer touch points, the sheer speed, size and sources of data make this effort critical and complicated.

  • Critical because CPG companies have to stay ahead of the competition by understanding the consumer better (read faster) and delivering the right message to the right audience at the right time.
  • Complicated because these companies have to find ways to deal with this data explosion.
Click to enlarge (Generation D Study –
Click to enlarge (Generation D Study –

The recent IBM Center for Applied Insights study “Inside the mind of Generation D” provides some understanding of the types of data CPG companies are using. It shows that 43 percent analyze transactional data (from POS, credit card and ERP systems). But above and beyond this structured data source, over half are tapping into videos and images, and 41 percent analyze sensor data. Nearly one-third of these companies are analyzing unstructured text, such as blog posts and customers reviews. These unstructured data sources provide a great deal of insights (especially when combined with structured data), helping CPG companies design targeted promotional and pricing strategies.

The study also highlights how these companies use this data. While data querying and reporting is the most common (88 percent) form of data analysis among the participants, what is surprising is that more than half are relying on advanced data analytics techniques such as predictive modeling (57 percent), automating process decisions with analytics (52 percent) and simulations (56 percent).

Given these findings, we can assume that most consumer goods companies are realizing the importance of analyzing multiple – perhaps nontraditional – data sources to generate insights. The study refers to data-rich and analytically driven enterprises as Generation D. These companies understand the unique and powerful value of data and analytics, and they know how to combine that with cloud, social and mobile technologies to transform their enterprises. Across industries, Gen D companies also report better business results than their limited-data oriented counterparts:

  • The “Generation D” enterprises see themselves as better able to address critical industry imperatives


  • The Generation D enterprises report improved performance over peers on key KPIs

Generation-D-improved-retention Generation-D-improved-R&D

The bottom line on this entire data obsession, and rightly so, is to keep your products and brands relevant in the eyes of the customer across multiple consumer touch points. Undoubtedly, data will play a pivotal role in this and may also act as a key differentiator, enabling leading industry players to move to the next level. So which side of the fence is your company on: Is it a Generation D enterprise or just one of the “All others”?

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