A Solution to the CPG-Retailer Dilemma

Posted by Bond Brand Loyalty

Sep 22, 2014 11:31:00 AM

Attention CPG brands! You are accustomed to retailers calling the shots and controlling the consumer relationship. You have also invested massive marketing dollars on acquisition based tactics ranging from promotions, in-store media and sweepstakes to FSI's, social media and sampling programs, all to compete for the attention of the consumer. Another reality is that the consumer landscape is changing, bringing with it empowerment and brand promiscuity. It is up to CPG manufacturers to differentiate themselves and move ahead of the competition by forging a direct relationship with consumers. Here, loyalty can be a key strategy to strengthen relationships and to gain valuable data at the same time. With this in mind, we thought we'd share some of the challenges and opportunities that CPGs and retailers are facing now.

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Both retailers and CPGs yearn for the love of the consumer, but they don’t always work together to achieve this common pursuit. In fact, this has forced many CPGs to experiment with direct to consumer CRM and loyalty initiatives. According to a Grocery Manufacturers Association report, of CPG companies expect to sell products directly to consumers last year. The priority for CPG manufacturers to connect directly to consumers is higher than ever, if not more so, when taking into account the number of CPG direct-to-consumer loyalty programs in-market.

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New Consumer Marketplace Realities

1. Joint Custody. The retailer and CPG will need to find a way to have joint custody of the consumer based on defined but equitable business rules.

2. Data. It must be realized that the retailer might continue to house the data, but in the new age of information and data governance, the consumer actually owns that data.

3. Empower. Consumers have technology and choice at their fingertips and will decide how, when and with whom they want to do business.

4. Brand Alignment. According to the 2014 Loyalty Report, brand-aligned programs have nearly 3 times the proportion of satisfied customers.

5. Cooperation. Influencing profitable change in consumer behavior goes well beyond discounts to fulfilling consumers’ emotional needs. Working together to better understand these needs will result in greater success for both constituents.

 

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Topics: CPG Loyalty