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Social Insights: The CPG Industry


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In "Social Insights: The CPG Industry", we dive into the trends shaping the CPG industry. The report addresses the following questions: what is driving this pressure in the industry, what are the goals of leading CPG companies going forward, and where does social media intelligence fit?

- How the retail industry and changing consumer preferences affect CPG markets
- The unique concerns of CPG brands approaching data-driven strategies
- Three main ways CPG companies leverage social data to enhance their businesses.

Published in: Social Media
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Social Insights: The CPG Industry

  1. 1. Social Insights/ The CPG Industry © | 1© Social Insights/ The CPG Industry The trends accelerating the sector towards social analytics
  2. 2. Social Insights/ The CPG Industry © | 2 Executive Summary Where digitization and the changing consumer has disrupted the CPG landscape, evidence-based insights provide a golden ticket of opportunity. This report addresses the current state of the CPG industry’s analytic maturity and presents ways many companies are finding success from social intelligence. The changes facing CPG companies in recent years resulted from the industry’s relationships with retailers, the rise of digital sales and marketing, and emerging demand in both developing countries and the increasingly-relevant ‘Millennial’ age-group. These factors have increased the need, and the opportunity, for players in the industry to devote resources to building customer relationships and keep abreast with their market and demand. Research suggests that moving towards data-driven approaches is both an essential step in addressing this industry’s changes and a growing priority among many CPG companies. Further research revealed two main objectives CPG companies had when adapting social intelligence: 1. Collect and analyze social data for market research and informed product decisions and 2. Strengthen the relationship between themselves and their customers through intelligent engagement and targeted marketing. Specifically, three use cases were revealed: • Health and trend surveying • Consumer and market research • Benchmarking business objectives
  3. 3. Social Insights/ The CPG Industry © | 3 Contents Executive Summary �������������������������������������������������������������������������������������������������������������2 Unpacking the Current CPG Landscape �������������������������������������������������������������������������4 Analytical and Social Maturity in the CPG Sector����������������������������������������������������������5 Leveraging Social Analytics for CPG Business Goals ��������������������������������������������������7 Health and Trend Surveying�����������������������������������������������������������������������������������������������7 Consumer and Market Research ��������������������������������������������������������������������������������������7 Benchmarking Business Objectives����������������������������������������������������������������������������������9 The Next Stage of CPG Social Intelligence�������������������������������������������������������������������12 About Brandwatch �������������������������������������������������������������������������������������������������������������13
  4. 4. Social Insights/ The CPG Industry © | 4 Unpacking the Current CPG Landscape If you work in the consumer goods sector, you’ve likely struggled with maintaining customer relationships. It’s not just you; the industry is changing. New markets are emerging in developing countries, introducing new consumer demographics for large international companies. Additionally, as millennials become an increasingly prominent percent of CPG purchasers, preferences toward sustainable, convenient, artisan, and healthy products grow more prevalent.1 While the makeup of the average consumer goods customer evolves, how CPG companies interact with their customers must also evolve. Increased online product research, social media marketing, and the reliance on retail shelf space are among the factors disrupting the CPG industry-customer relationships. CPG companies must proactively build and strengthen customer relationships. Currently, brand loyalty for many consumer packaged goods categories is at an all time low.2 There is an immediate imperative for CPG companies to prioritize market, consumer, and demand research to understand how to address customers’ needs more intelligently. Luckily, as consumers increasingly research, review and discuss products online, social consumer data has become readily available to CPG businesses. “The ability to slice and dice large volumes of data is great. It makes large- scale campaigns and competitions easy to pull off.” Digital Executive, Kellogg’s Social media intelligence is currently a dynamic force for engaging with current and potential consumers, learning about preferences and behaviors, and collecting valuable market data. And the CPG companies that have seen the most success in this pivotal decade are those that have applied analytical approaches to important business decisions.3,4 Most consumer goods firms expect to increase the usage of social analytics over the next year or two to improve engagement and extract valuable insights.5 Even the less socially and analytically mature CPG companies have social intelligence on their radar. The ability for CPG companies to acquire business- driving insights from their customers and the market has never been greater. The next step for CPG companies breaking into this space is understanding what social analytics looks like in their industry. 1 Accelrys. Targeting the Next Generation: Consumer Packaged Goods for Millennials and Teens. 2015. 2 Deloitte. The 2015 American Pantry Study: The call to reconnect with consumers. 2015. 3 McKinsey. Winning in consumer packaged goods through data and analytics. 2016. 4 Capgemini Consulting. Consumer Insights: Finding and Guarding the Treasure Trove. 2016. 5 Accenture. What’s Trending in Analytics for the Consumer Packaged Goods Industry?. 2014.
  5. 5. Social Insights/ The CPG Industry © | 5 Analytical and Social Maturity in the CPG Sector Regardless of industry, companies are increasingly prioritizing their customers, whether it’s building and strengthening relationships with different demographic groups or using consumer preferences and behaviors to direct products or marketing campaigns. However, the way in which industries approach these initiatives relies on how their customers interact with their products and their brands. For instance, an important drawback CPG companies express as they consider social analytics is the nature and volume of the organic CPG conversations online. Despite being among the most popular and most frequently purchased products, consumer packaged goods will not garner as much organic conversation as other sectors like consumer electronics. Perhaps for this reason, many CPG companies are very early in their adoption of social media marketing and social intelligence.6 Nonetheless, the average CPG brand on social media can expect to have an audience of millions on Twitter, Facebook and Instagram.7 In addition, CPG outliers like Dove and Ben Jerry’s, which heavily invest in smart social content, acquire even more followers and receive more engagement from their audiences, exemplifying the power of intelligent social media content. In the following example, Dove’s tweet received 10 times as many retweets as the average CPG brand could expect to have in a given day.8 6 Brandwatch. The Social Snapshot: CPG Industry. 2016 7 Brandwatch. The Social Snapshot: CPG Industry. 2016 8 Brandwatch. The Social Snapshot: CPG Industry. 2016.
  6. 6. Social Insights/ The CPG Industry © | 6 Dove @Dove RT and let the media know that sexist comments about female athletes must stop – right now. #MyBeautyMySay 226 188 17 Aug 2016 Further, too many CPG companies pigeonhole social media as a distribution platform, ignoring the massive power of social data for extracting consumer and market insights. Only half of consumer goods companies currently find success from using consumer insights to improve business decisions, and fewer still use strategic social intelligence and analytics as a consumer insights tool.9,10 Social analytics’ speed to insights, its scalability, and its unfiltered data source should solidify its place at the forefront of CPG businesses’ analytical goals. In the coming years, the main business priorities of many CPG companies are to build and strengthen customer relationships and develop evidence-based strategies to amplify business initiatives. In order to be proactive when addressing the changing market, CPG companies must now turn business priorities into plans of actions with clear objectives. 9 Capgemini Consulting. Consumer Insights: Finding and Guarding the Treasure Trove. 2016 10 Accenture. What’s Trending in Analytics for the Consumer Packaged Goods Industry?. 2014
  7. 7. Social Insights/ The CPG Industry © | 7 Leveraging Social Analytics for CPG Business Goals Brandwatch works with many CPG brands that pave the way in the utilization of social intelligence. After researching the leaders within and outside our company, three key use cases were revealed that help CPG companies address their unique concerns. For more information on any of these use cases, see our series of Social Listening in Practice guides. Health and Trend Surveying Among the easiest and most common ways CPG companies leverage social analytics is through semi- frequent brand health and consumer trend surveying. These analyses tend to be very similar to one another, and are conducted either on an ongoing, timely basis (e.g. every month or quarter) or after events like conferences or advertising campaigns. The purpose of these analyses is to get a high-level snapshot of the health of the brands or the success of campaigns. These analyses typically use the same data searches report to report, with minimal changes to the date range or campaign keywords as necessary. By creating benchmarks applicable for ongoing reporting, this “snapshot” reporting can even be automated to expedite the analyses and minimize employee intervention. These analyses can illuminate changes in sentiment about the brand and insights from these snapshots are commonly used as the foundation for more in-depth market research. Consumer and Market Research Taking health and trend surveying one step further, social data can provide answers to more robust research questions. Whether informed by health survey results or by RD teams aiming to expand into a new market, consumer and market research is a common social analytics use case for CPG companies. Rather than using a similar format for each analyses, this type of research usually occurs in one of two ways: 1. Exploratory research, letting data guide your analyses, social ethnography. 2. Research with a specific research goal, answering a “why” question The exploratory path is similar to conducting ethnographic research, approaching the analyses without preconceived notions or hypotheses to test. Unlike other ethnographic methodologies, however, the volume of social data available can provide insights into many different populations and human behaviors, while investing less time, energy, and money.
  8. 8. Social Insights/ The CPG Industry © | 8 This type of analysis might begin with segmenting conversations by broad categories, like gender, and letting the data inform future research. For instance, the analysis below of the consumer conversations surrounding battery brand Duracell revealed that most of the people discussing the company are female. • FEMALE AUTHORS • MALE AUTHORS DURACELL AUDIENCE GENDER ANALYSIS 28% 72% Figure 1: Analyzes 115,549,350 conversations around 450 brands and organizations across Twitter, Facebook, news sites, blogs, and forums from April 1 – June 30, 2016. Despite this discrepancy in conversation representation, Duracell tends to have as many male as female customers.11 CPG companies especially must be wary not to fall prey to gender stereotypesas they align their marketing with consumer preferences and behaviors. For Duracell, this analysis might reveal a pocket of opportunity where the brand can improve how they engage with half their customers. Social media data can also be utilized to conduct research more akin to psychology studies: using social analytics to test research hypotheses. These kinds of analyses are utilized by businesses with specific business questions, like whether customers prefer the shampoo nozzle on the top or bottom of the bottle. For CPG companies that deal with foods and beverages, the following analysis showing how discussion of food changes by season is particularly valuable. 11 Infoscout. Duracell Consumer Insights. 2016.
  9. 9. Social Insights/ The CPG Industry © | 9 •“TREAT YOURSELF” •DIET VOLUMEOFCONVERSATION 0 10K 20K 30K 40K 50K 60K 70K 80K FALLSUMMER FOOD-RELATED CONVERSATION CHANGES BY TIME OF YEAR Figure 2: Analyzes 77,654 conversations between July 7 - August 25, 2016, and 112,780 conversations between September 1 - October 27, 2016, across Twitter, Facebook, and Instagram. Food-related mentions were identified and segmented using Brandwatch’s Rules and Categories features. In the summer, people on social media only discuss “treating themselves” more than their diets on Fridays. However, in the fall, food discussions about people suggesting they “treat themselves” significantly outweigh diet mentions. These consumer insights can be important for CPG marketing teams considering yearly advertising campaigns. Further segmentation of this data could reveal trends by product line, consumer gender, or as granular as changes by the minute or hour. Benchmarking Business Objectives Benchmarking business objectives is an integral facet of nearly every department inside a business. However, even among the same industry, not all will companies have the same objectives. Within the CPG industry, some firms aim to heavily brand all of their content and products, so the conversations among consumers, reporters, financial stakeholders and competitors throughout the market link back to them.
  10. 10. Social Insights/ The CPG Industry © | 10 Benchmarking this kind of business goal might compare a business’ share-of-voice on social media and public web pages against its competitors. •SENSODYNE •CREST •COLGATE •AQUAFRESH SHAREOFVOICE 0% 20% 40% 60% 80% 100% FACEBOOKTWITTER TOOTHPASTE BRAND CONVERSATIONS ON SOCIAL MEDIA Figure 3: Analyzes 14,493 Facebook and 45,231 Twitter audience conversations about toothpaste brands between April 1 - September 30, 2016. On the other hand, some companies, especially smaller, younger, or niche companies, won’t find such analyses as useful. These CPG companies direct resources on a niche use case or specific demographic to differentiate themselves in a saturated marketplace. Companies with these objectives require ways to measure how successful their product marketing and brand attribution are.
  11. 11. Social Insights/ The CPG Industry © | 11 Below is an example of such a benchmarking analysis of consumer discussion on social media, comparing four brands of toothpaste on three features/traits. •SENSODYNE •CREST •COLGATE •AQUAFRESH SHAREOFVOICE 0% 20% 40% 60% 80% 100% SENSITIVITYWHITENING SPECIALITY TOOTHPASTE CONVERSATIONS ON SOCIAL MEDIA Figure 4: Analyzes 4,502 audience conversations about specialized toothpaste brands between April 1 - September 30, 2016. Different conversation topics were identified and segmented using Brandwatch’s Rules and Categories features. These types of benchmarks are beneficial for CPG companies with social missions, value statements, or brands in niche sectors. A company like Sensodyne wouldn’t find as much value in an overall share of voice analysis as it would in an analysis looking at conversations around sensitivity specifically. Analyzing conversations surrounding brands or products by an adjective, emotion, or feature provides companies with the ability to measure brand and product positioning and brand attribution in conversations.
  12. 12. Social Insights/ The CPG Industry © | 12 The Next Stage of CPG Social Intelligence The main differentiator between consumer goods companies embracing data-driven global business strategies and those still early in that process is the lack of understanding of how analytics can improve business objectives.12 There are several cutting-edge leaders in this industry, but because social seems like an unlikely place to reach consumers, many in the industry are still unsure how to incorporate data-driven strategies like social intelligence into the needs of their company. Even among companies who’ve invested in social engagement tools or who’ve adopted social listening platforms, social analytics is frequently an afterthought rather than integrated from the beginning into business strategies. The next stage in the CPG industry’s analytical maturity involves companies considering how their specific gaps in consumer and market knowledge affect their growth and competitiveness, and where social analytics should fit within the organization of their business. For more information on how social data and social intelligence can better your business, contact us at Brandwatch or request a demo. 12 Accenture. What’s Trending in Analytics for the Consumer Packaged Goods Industry?. 2014
  13. 13. Social Insights/ The CPG Industry © | 13 About Brandwatch Brandwatch is the world’s leading social intelligence company. Brandwatch Analytics and Vizia products fuel smarter decision-making around the world. The Brandwatch Analytics platform gathers millions of online conversations every day and provides users with the tools to analyze them, empowering the world’s most admired brands and agencies to make insightful, data-driven business decisions. Vizia distributes visually-engaging insights to the physical places where the action happens. The Brandwatch platform is used by over 1,200 brands and agencies, including Unilever, Cisco, Whirlpool, British Airways, Asos, Heineken, Walmart and Dell. Brandwatch continues on its impressive business trajectory, recently named a global leader in enterprise social listening platforms by the latest reports from several independent research firms. Increasing its worldwide presence, the company has offices around the world including Brighton, New York, San Francisco, Berlin, Stuttgart, Paris and Singapore. Brandwatch. Now You Know. | @Brandwatch | press office | contact
  14. 14. Contact/ Email Web Twitter @brandwatch Telephone US +1 212 229 2240 UK +44 (0)1273 234290 DE +49 (0)30 5683 7004-0 ©