Consumer packaged goods companies in the market today need an improved way of seeing their customers. They want to deeply transform engagement and have more personalized relationships, gain the ability to measure at each point of contact, improve the efficiency and effectiveness of their campaigns and create long-term customer loyalty.
The only way to improve customer satisfaction and deliver better experiences is through data, but a first-party data strategy alone isn’t enough. To keep pace with the desires of modern shoppers and demands of digital transformation, CPGs must optimize their sphere of influence through partner networks that break down traditional silos, improve business outcomes and deliver continuous value over time. By engaging in data collaboration, CPGs can achieve a true 360-degree view of their current and prospective customers.
Think Beyond First-Party Data
Findings from Winterberry Research confirm that 70% of executives across the U.S. and UK are planning to collaborate with other organizations to share first-party data — but this is only the first step. First-party data can’t provide the necessary holistic view of the customer on its own, especially in the case of CPGs. This is largely because shoppers remain reliant on retailers to buy products, and these same retailers benefit from the historical context of the customer journey over a lifetime.
Data collaboration is also much more than merely having a first-party database. It requires an identity infrastructure that can connect different types of data at scale, and do so in a permission-based and secure way.
Take Hill’s Pet Nutrition for example, which was able to use this strategy to uncover new insights that not only benefit its core business but a broader network of pet-adjacent industries. Leveraging data collaboration to combine second- and third-party data with first-party data, the pet food company uncovered event-based moments that indicated whether a future pet owner would like to adopt a dog in the coming years, or whether a current pet owner might be looking to change food brands for their four-legged companion.
Use Retail Media to Your Advantage
Retail media has taken the global industry by storm, and for a good reason. From Walmart and Roundel to Amazon and Instacart, retail media networks are revenue-generating machines.
A great example is leading European retailer Carrefour, which launched its retail media network, Carrefour Links, to build and share customer journey intelligence with its global CPG partners and suppliers, with the goal of better serving millions of their jointly shared shoppers around the world. This included delivering better customer insights, activating marketing campaigns and measuring campaign impact using in-store data down to the SKU level.
The end result was a win-win: what began as a way to collaborate with data and optimize offers to existing customers became a robust platform for truly understanding customer needs, protecting privacy and establishing stronger relationships across online and offline channels.
Increase Revenue in New Channels
Data collaboration and its network effect is the very illustration of the computer networks concept of Metcalfe’s Law: the value of a network is proportional to the square of the number of connected users of the system. Retail extends to CPG penetration, and both retail and CPG penetration extend to high-value areas such as TV and even cloud.
Kimberly-Clark recognized this opportunity when it utilized data collaboration, optimized through Google Cloud Platform, to convert challenges such as the deprecation of third-party cookies and increasing data regulation into opportunities to launch a first-party data strategy, forge new relationships with consumers and collaborate with trusted partners to achieve competitive advantage.
As channels like TV become more data-driven — and thereby more addressable — CPGs, brands and retailers alike can drive more collaboration to boost campaigns. Truly successful data collaboration, however, is omnichannel. CPGs should seek interoperable retailers, TV, technology and cloud partners to activate across a wide variety of channels and continually measure the effectiveness of marketing investments.
Invest in Privacy Technology
As retail industry companies become more comfortable maintaining compliance with the evolving international data regulation landscape, they can now explore next-generation technologies designed specifically to safeguard consumer data throughout internal and external collaboration.
Discourse around privacy-enhancing technologies (PETs) such as federated learning, differential privacy and homomorphic encryption, continues to heat up — especially in the advertising space. Long favored by highly sensitive industries like government and healthcare, these solutions strengthen data protections without restricting data’s utility, allowing collaboration to remain safe, seamless and privacy-first across and within any environment where data might live. CPGs and their retailer partners are able to maintain control over their data and maximize its value as a result.
Better Customer Relationships are Achievable with Data Collaboration
The availability of data has enabled CPGs to truly enter the next era of meaningful consumer relationships. By connecting the missing links of holistic customer intelligence with trusted partners, CPGs can map out the customer experience more effectively, extract more value from their retailer and brand relationships, and measure impact and real-world business outcomes in ways previously not possible.
But remember, no two data sources are alike, making it critical to treat each collaboration with care. When data is armed with identity, privacy and security protections, and maximized through trusted partners, the future of possibilities for CPGs is bright.
Vihan Sharma is SVP and Managing Director for Europe at leading data enablement platform LiveRamp (NYSE: RAMP), where he oversees the continuous global expansion of Safe Haven, LiveRamp’s privacy-first data collaboration platform that allows enterprises, retailers and CPGs to do more with data. Before LiveRamp, Sharma spent nine years leading European operations with its former parent company Acxiom, where he was responsible for all aspects of Acxiom’s data and product strategy outside of the U.S.