As we tentatively begin to emerge from the COVID-19 crisis, the CPG vertical, like every other, is in a state of flux. However, unlike its contemporaries in travel, restaurants, and retail, rather than a miserable quarter in terms of sales, it has enjoyed something of a bounce. Like all things though, this too shall pass, and whether you rewind or fast-forward a few months, CPG brands will still face the same challenges they did pre-pandemic.
Market saturation and an evolving consumer appetite for organic and more locally-sourced products has hit the bottom-line for CPG brands already jostling in a crowded marketplace. Disruptor brands, whether selling weekly hipster coffee subscriptions or bi-monthly razors with sensitive pre-shave face scrubs are selling direct-to-consumer and eating into market share.
Disruptor CPG brands are smaller in relative terms, but with that comes agility. And while they may not always have their products on the shelves of behemoth supermarkets, the direct-to-consumer relationships they are fostering empower them with the ability to collect the opt-ins and psychographic data points required to build more meaningful relationships with their customers.
As CPG brands diligently support their customers during the COVID-19 crisis, it’s essential to prepare for the future too, and adopt a strategy rooted in zero-party data. Zero-party data enables CPG marketers to foster lasting and more meaningful connections with its customers that are grounded in self-reported data.
The zero-party data path
For the uninitiated, zero-party data is not first-party data with a Hollywood reboot. First-party data is collected during sales, and includes things like purchases, mailing address, date of birth and the like. All valuable information, but it’s purchase history, rather than purchase intentions, and falls short of things like what compels your customer to buy, what features, benefits, and deals they look for — the information you really need to tailor your messaging.
First-party data acquisition is essential, but it’s merely a starting point, it’s zero-party data that will help CPG brands win a future post-pandemic.
“Zero-party data is that which a customer intentionally and proactively shares with a brand. It can include purchase intentions, personal context, and how the individual wants the brand to recognize her.” Fatemeh Khatibloo, Principal Analyst, Forrester
It is possible for CPG marketers to collect preference and psychographic data that is intentionally and proactively shared directly with them by the consumer. This is zero-party data. They collect this by connecting directly with consumers and gathering the data, insights, and permissions they need to power personalized marketing across all stages of the customer lifecycle.
Rather than inferring, you ask, and consumers are willingly and intentionally sharing. It is quite simply data your customer has willingly shared with you, like purchase intentions and preferences to improve personalization and help build up a picture of who they are. As it comes directly and willingly from the consumer there are no intermediaries, no guesswork.
How direct-to-consumer brands can prepare for the future after COVID-19.