CPG data insights: Navigating consumer trends and market dynamics

Data is vital for all companies, but for CPG brands, it comes with a few unique challenges. Namely, their products are sold by retailers, not directly from the brand. This means that access to purchase data—and the insight it provides—is more difficult. 

CPG data provides valuable insights into consumer behavior, preferences and market trends, enabling CPG marketers to make informed decisions. By analyzing sales data, demographic information and consumer feedback, CPG marketers can identify the best audiences for their products, optimize product offerings and tailor marketing strategies to meet consumer needs.

In this post, we’ll outline what CPG data is and how to interpret it, the importance of using data insights to drive business outcomes, and how CPG marketers can overcome the dreaded data gap.

What is CPG data?

First, CPG stands for consumer packaged goods, or products that consumers use and replace frequently, like packaged food and beverages, cleaning products, over-the-counter medicines and toiletries.

CPG data refers to the information gathered about these products and their sales. Data comes from various sources, including point-of-sale, promotions, marketing, distributors or third-party outlets. Brands use this data to understand what’s selling, where and why. 

Data is also crucial for any marketer to learn about their customers and preferences regarding their products.

But CPG brands don’t have access to data like other brands across retail, travel, restaurants, auto—you name it—do. Items are sold in retail stores, making it more difficult to identify individual customers who bought their products. The data they do have is often fragmented, captured through activities like sweepstakes or loyalty programs and supplemented with second- and third-party data. CPG brands tend to have fewer direct B2C connections compared to other industries due to their reliance on intermediaries like wholesalers and retailers for distribution, their focus on brand building rather than direct consumer relationships, and the challenges associated with managing large-scale operations and accessing consumer data. This is what leads to what's sometimes referred to as the "CPG data gap."

It’s especially challenging for CPG companies with a large portfolio of brands. Marketing leaders at CPG brands need to first understand what data is available to them and how to collect it, and then analyze and enrich that data with an audience insights tool to better inform marketing strategy and tactics moving forward.

There are different types of CPG data to consider: retailer, distributor and panel.

Retailer data

CPG retail data is the information that retailers collect from purchases at the point of sale. This includes SKU data, which provides details of products purchased, and sales data, offering insights into the volume of sales at each store location. 

CPG and retail data are essential for understanding product performance, consumer behavior and market trends; and this data are used to improve CPG sales through:

  • Forecasting and planning - understand consumer buying patterns and trends for more accurate demand forecasting and inventory planning.

  • Price optimization - use historical sales data to establish optimal pricing strategies to maximize revenue without impacting purchase likelihood.

  • Retail efficiencies - use retailer data insights to improve on-shelf availability, reduce stocking issues and improve replenishment rates, which drives sales.

  • Distribution - learn which regions, chains or store formats drive the most sales of your products, aiding in the strategic expansion of distribution. 

  • Trend identification - identify emerging consumer preferences to then optimize products and their packaging to enhance shelf appeal and meet evolving demands.

Distributor data

CPG distributor data is the information provided by distributors, which sheds light on where CPG products are carried from week to week. This data can be broken down into geographic regions, retailer locations and more, allowing for a granular look at a product’s distribution strategy and channels. 

Distributor data is essential for understanding how products perform in the marketplace, identifying the most successful stores and their locations and analyzing advertising and promotion effectiveness.

While retailer data focuses on sales and consumer behavior at the point of sale, distributor data is more concerned with product distribution and shipment information.

Panel data

Panel data—also called syndicated data—is self-reported purchasing details collected by third-party companies or market research firms. This data provides a comprehensive view of consumer behavior, including household purchase behaviors, demographics and brand preferences. 

Panel data helps both CPG brands and retailers understand consumer trends and make informed business decisions. Collected through consumer surveys, POS scanners and apps, it offers insights into consumer behavior at a household level. This allows for an in-depth analysis of shopping habits, brand loyalty and product interactions. 

Panel data helps CPG brands:

  • Increase sales by understanding marketshare, brand awareness and trends to make informed decisions that maximize profits.

  • Build loyalty by understanding consumer preferences and behaviors, and developing products, marketing strategies and retention programs that resonate, ultimately building affinity.

  • Improve marketing ROI by understanding consumer behavior and creating more targeted and effective marketing strategies.

  • Beat competitors by understanding market dynamics, emerging trends and consumer behavior to gain a competitive advantage.

One of the key benefits of panel data is its ability to examine trends over time, study correlations and analyze large amounts of consumer data. The downside is complexity and cost.

Interpreting CPG data analytics

Collecting CPG data is the first step, but you then need to interpret and make it actionable. 

CPG data analytics involves gathering insights into product performance, customer behavior and market trends to understand preferences, measure success and make informed business decisions. It encompasses sales data, observational data, activity data and panel data.

Analytics tools are essential to handle the volume, velocity and variety. By leveraging these vast datasets, CPG marketers can extract invaluable insights to drive business success, optimize operations and plan for the future.

Key CPG analytics KPIs include sales velocity, loyalty, share of category, promotional lift and in-stock performance. 

Leveraging CPG data insights to marketing strategy

Now that you understand what data is available for CPG brands, and the importance of collecting, analyzing and using that data, let’s discuss how these insights can propel your marketing strategy.

Improve sales methods

A key outcome of CPG data analysis is the ability to make better decisions about your products and sales processes. For example, you can see what products, categories or specific retail stores, locations or regions are underperforming. This allows you to take a critical look at improving overall sales through marketing, including:

  1. Reaching new customers
  2. Engaging with existing customers
  3. Unlocking new audience opportunities
  4. Understanding underperforming products, stores and markets
  5. Shifting budget to higher-performing areas

To improve sales, watch what is working (and learn from it), but focus your efforts on the areas that aren’t as successful. 

Inform product development

Creating products—and knowing when to retire them—is an important part of CPG brand success. With sales data analytics, marketers can see a clear picture of when to create new products, or when to optimize existing products. Sometimes all that needs to be done is optimizing your product packaging to be more appealing on the shelf.

Data helps illuminate consumer preferences, historical information and emerging trends within the market. With this insight, marketers can work with their product development teams to ensure your brand's products continually satisfy these evolving consumer needs, expectations, preferences and demands.

The key is using data to make informed decisions about brand products, thus impacting growth and profitability.

Monitor competitors

CPG data insights can be used to assess and monitor competitor activity, allowing you to differentiate your brand. Keep an eye on the competitive landscape, including:

  • Pricing

  • Promotions

  • Product offerings (including new products or relaunches)

  • Consumer behavior (particularly when shoppers choose your competitors over your products)

  • Market sentiment

  • Trending products, brands or categories

Competitive data—coupled with consumer data—allows brands to stand out with effective product recommendations. By understanding your customers' preferences and behavior patterns, you can create a more personalized customer experience, providing a competitive advantage in the marketplace.

Personalize marketing campaigns 

As with marketing in all industries, data is the key to delivering targeted, personalized and effective campaigns. CPG marketing is no different.

CPG insights enable marketers to better personalize their strategies by providing a comprehensive understanding of consumer behavior, preferences and interactions. Using your CPG data analytics ensures that your marketing and promotion efforts resonate with consumers to drive engagement and sales. 

But CPG brands often lack the data necessary to execute on advanced digital marketing strategies that account for reaching the right people (not just segments or demos) with relevant creative and messaging at the time they’re looking to purchase.

Data serves two primary purposes for CPG brands:

  1. Identify customers (and new target audiences)

  2. Send them personalized marketing messages.

Personalization is the next era of CPG marketing, allowing for 1:1 experiences at scale through smart targeting, segmentation and activation across marketing channels.

Person-first marketing made easy with Epsilon

To achieve person-first marketing for your CPG brand, you’ll need to address your data gap.

According to an Epsilon survey, 89% of CPG marketers reported being focused on developing their first-party data strategy. Collecting that data is a great first step. But you’ll also need a platform to enhance that data with real-time identify resolution, integrate it with your second and third-party data sources and connect it to your marketing campaigns.

With Epsilon’s Clean Room offering, an audience insights tool, you can close the gap in CPG marketing with an audience insights tool designed to connect you with the best in-market customers and prospects. We partner with Circana (formerly IRI) to offer CPG marketers a clean room that includes the world’s largest and most granular CPG transactional data set. This allows you to create your own closed-loop ecosystem for CPG data insights, audience development, activation and measurement.