Consumer Goods (CG) global leaders and decision-makers have increasing amounts of data and information sources that can add more complexity to their business processes. According to the 2023 Consumer Goods Industry Insights Report, putting data to work is easier said than done.
Salesforce surveyed 1,500 global decision-makers in the consumer goods industry to discover how organizations are:
- Driving efficient growth
- Capturing the attention of savvy, digital-first consumers
- Identifying and capitalizing on new opportunities
Also: Tech professionals need to ‘get out of the data’ and talk to people again
The survey generated responses from a range of consumer goods decision-makers across North America, Asia-Pacific, and Europe. Here are three key findings of the CG 2023 research:
- Efficient Growth Is the Name of the Game – As higher costs and price-sensitive consumers pressure profits, companies are focused on increasing margins. Ninety percent of CG respondents expect profitable growth over the next 24 months.
- Digital Engagement Is a Top Priority – Companies are building connections with consumers by investing in digital marketing, service, and direct-to-consumer selling. CG companies plan to invest in social media more than any other marketing channel.
- Data Fuels Increasing Complexity and Opportunity – Companies are good at collecting data, but putting it into action is another matter. CG marketers collect data from an estimated average of 18 sources — up from 10 in 2021.
That 90% of consumer goods decision-makers expect profitable growth over the next 24 months is good news, supply chain issues persist, including increased competition, raw material costs, labor costs, and changing customer expectations/behaviors. That said, product innovation is seen as a key to growth, including a shift to digital marketing, selling directly to consumers, brand expansion into new product categories, and improving merchandising and promotion strategy at brick-and-mortar stores.
Efficient growth is the name of the game
For CG companies, driving efficient growth starts with optimizing retail execution. More than one in three CG leaders (36%) say improving merchandising and promotion execution at brick-and-mortar stores is among their biggest opportunities. Thirty-eight percent of in-store product and marketing initiatives aren’t carried out as intended. Many companies see opportunities for better in-store execution. Twenty-six percent of CG decision-makers view optimizing trade promotion spending as a key opportunity, and 36% of CG decision-makers view improved brick-and-mortar merchandising and promotion as a key opportunity.
Also: How digital transformation has changed everything about retail
Large companies focus on promotion effectiveness, yet unfortunately, less than half of respondents (46%) are fully satisfied with their promotions’ returns. Only 36% of CG companies report high adoption of trade promotion software. Retail execution remains in sharp focus. Even the best-planned merchandising strategy won’t work if a CG brand can’t get its products to retailers at the right time and price. Retailers are combating out-of-stock improvements by introducing new products, field sales representative productivity, merchandising and marketing in-store compliance, taking action on analytics, and out-of-stock status-sharing improvements.
Online sales volume appears poised for growth. The research found that 54% of B2B commerce professionals say they sell 54% through their website already, and 90% of B2B commerce professionals expect buyers to place larger and more complex online orders in the next two years.
Digital engagement is a top priority
Digital marketing takes center stage with the following channels as CG’s top priorities: social media marketing, digital ads, retailer’s website and apps, video and events, and sponsorships tied to direct mail and print advertising. The research found that 77% of respondents expect to increase their marketing spend over the next two years.
CG companies are also capturing the attention of consumers in new marketing channels. Case in point: 93% of respondents plan to increase (54%) or maintain (39%) spending on fast-growing retail media networks that place ads on retailers’ websites and apps. Social media isn’t just relevant for product discovery and purchase — it’s also a key service channel. In fact, social media has eclipsed the telephone as the most frequently used service channel for CG companies, with 83% using it to engage consumers directly.
Also: How high performing sales teams use technology to win in today’s economy
Direct-to-Consumer (DTC) is an important sales channel for CG leaders. DTC selling is nearly universal in CG, with 91% of respondents already selling DTC and another 8% planning to in the next 24 months. The revenue is significant: For more than one in three CG companies that already do this, DTC accounts for at least 41% of revenue. DTC is for more than selling. With DTC selling, companies can maintain control of their marketing and pricing. They also gain firsthand knowledge of which products customers buy — and which they don’t — which is information they might otherwise have to pay for.
Price, quality, and service keep customers loyal. The survey found that 83% of respondents believe it’s more difficult to maintain consumer loyalty now than ever before. Loyalty programs matter– 56% of consumers are more likely to buy from a brand with a loyalty program. CG companies believe in the power of loyalty programs and they’re making investments to keep consumers shopping: 70% of CG companies say they have their own proprietary loyalty program.
Data fuels increasing complexity and opportunity
Changes to third-party cookie access is leading CG companies to entice consumers to share more of their own data. Hence, CG companies are engaging consumers on digital channels, selling DTC, and launching loyalty programs. The research found that 92% of CG leader respondents say they effectively use data to improve overall profitability. That said, data quantity and complexity are growing. CG companies that struggle with data are under intense pressure to improve and scale their analytics.
The number of data sources used by CG marketing operations has grown from 10 in 2021 to 18 in 2023.
For CG leaders, personalization of offerings is the new currency that matters. CG research found that 76% of respondents say they can fully personalize consumer engagement across all channels and touchpoints. With 73% of consumers expecting companies to understand their unique needs and expectations, CG companies are leaning into personalization. Thirty-five percent of respondents identify marketing personalization as a key opportunity, with another 89% saying their company is investing in personalization more than ever before.
Also: Low-code platforms mean anyone can be a developer — and maybe a data scientist, too
To learn more about the consumer goods industry insights report, you can visit here.