Many consumer brands thrived during lockdowns. Here are four ways they can build off this momentum.
While many industries struggled during stay-at-home orders, panic buying and pantry stocking has been a boon for consumer packaged goods (CPG) brands. Some even struggled to keep up with skyrocketing demand.
Idahoan Foods, for example, didn’t anticipate the spike in demand for its shelf-stable mashed potatoes, soups and other products. “We didn’t expect that behavior in purchasing patterns to shift so dramatically,” says Wes Myer, director of retail marketing at Idahoan. “Our teams were required to pivot and to do so efficiently and as quickly as possible.”
The landscape in which CPG marketers attract and retain customers has changed dramatically in a short time. COVID19 has been a catalyst for better understanding customers and building a more integrated marketing strategy across various partners and channels. This isn’t a novel idea in CPG, but the question today is: Who can get there fastest?
There are four critical opportunities CPG brands should pursue to maintain momentum—and build data-driven customer relationships that last beyond the pandemic.
1. Use data to drive retention
Toilet paper. Flour. Pasta sauce. During the early stages of the pandemic, half of all consumers tried other brands, according to PwC. All of this new trialing was a huge win for many companies. Millions of new households, for example, purchased Idahoan’s products during this time.
“Here’s what we knew: It was a panic buy,” Myer explains. So the question became: How could Idahoan convert this panic buy into a healthy, ongoing purchasing pattern in the future?
Myer’s team strategized ways to encourage people to use Idahoan products and ultimately become repeat customers. First, Idahoan identified a variety of buyer segments online—including new customers and lapsed buyers—and served them recipe ideas for using the brand’s most popular products, shifting to very deliberate callouts like, “From pantry to plate in minutes: Here are some recipe ideas for using our products.”
Then the marketing team combined consumer data with retail and first- and third-party data to communicate helpful messages to these new customers.
This approach is most effective through a personalized lens. A person living by themselves, for instance, may not derive value from a family-sized mashed potato casserole recipe—but a parent of five? A much more effective match.
2. Anticipate and meet evolving customer needs
Knowing what customers want requires anticipating their needs based on what the brand knows about each individual and household—and offering highly relevant solutions.
“We try to understand what’s actually happening in the lives of our consumers and how we can be problem solvers for them,” says Maureen Sticco, senior director of marketing at Bimbo Bakeries USA, which owns brands including Entenmann’s, Sara Lee and Thomas’. “Early on in the pandemic, we responded at warp speed, bringing one of our bakeries back online in about three weeks in order to keep up with consumer demand.”
It’s also about being able to easily adapt messaging to meet each consumer’s new and shifting needs. “With our breakfast brands, our business has grown exponentially during this time, because more and more consumers are making breakfast at home and not as many on the go,” Sticco says. “So it becomes about serving up information to our consumers that’s going to make their lives a little bit easier. It’s being the solution for them.
3. Get e-commerce (and DTC) right
The pandemic accelerated the trend toward digital, sending more shoppers online. Before COVID, e-commerce accounted for about 3% of food and beverage sales, but this number spiked to 15% during lockdown periods, according to BCG. And the trend toward online shopping may be here to stay. More than one-third (35%) of U.S. shoppers new to e-commerce plan to continue making grocery purchases online after the pandemic is over. In fact, BCG predicts that by 2022, the e-commerce share of grocery categories could be up to three times higher than pre-COVID.
Taking a page from the direct-to-consumer (DTC) playbook, traditional CPG brands like Frito-Lay, PepsiCo and Oral-B have built their own e-commerce platforms during the pandemic, allowing for direct purchase of their products online.
Idahoan had just launched its own DTC website and bolstered its presence on Amazon at the end of February 2020 in an effort to grow e-commerce sales.
“By the time pandemic hit, we were well positioned from an omnichannel approach,” Myer says. “A lot of folks went into brick-and-mortar stores to stock up and fill their pantry, but there were others that were worried about leaving their homes. Having our product available direct to consumer has really helped solidify and ultimately validate our approach as an omnichannel manufacturer.”
Idahoan has subsequently seen a huge increase in online purchasing, Myer says.
The model also provides Idahoan with access to first-party data, which will allow the brand to build increased personalization, establish a more direct line of communication and help develop a deeper relationship over time.
4. Partner with smarter retailers
While digital presence is growing in importance for consumer brands, retail partners are still a critical part of the omnichannel equation. But digitally savvy, data-driven retailers can provide the most mutually beneficial partnerships. With the deprecation of third-party cookies, retailers' first-party data is more valuable than ever. There’s an opportunity to monetize their data by building their own media networks, which have become an alternative platform for CPG brand advertising.
Walgreens, for example, recently launched Walgreens Advertising Group in partnership with Epsilon, combining data from more than 9,000 stores and more than 100 million loyalty members with advanced data modeling to deliver custom-built audiences tailored to brand objectives.
“First-party data—and the ability to use it—is a big part of the value we bring to the table in the conversations we’re having with brands and media agencies,” said Luke Kigel, head of Walgreens Advertising Group, in a December AdExchanger article. “And from a targeting, measurement and performance standpoint, we know that it performs better than third-party targeting.”
These kinds of programs are important for brands like Bimbo, as are other benefits afforded by close retail partnerships: “Mass media marketing programs serve a purpose,” Sticco says. “But it is also about starting with the retailer and working together on programs that work best for them, and what’s going on in their store and with our brands.”
Retail and CPG brands have an opportunity to leverage data and tools to deeply understand their consumers—and optimize messaging and experiences for them.
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Image credits: C.J. Burton / The Image Bank / Getty Images