How Customer Data Platforms Future-Proof the CPG Industry: 3 Aspirational Goals to Consider

How Customer Data Platforms Future-Proof the CPG Industry: 3 Aspirational Goals to Consider

How Customer Data Platforms Future-Proof the CPG Industry: 3 Aspirational Goals to Consider

Keeping up with the dramatically shifting needs of shoppers this year has not been easy for consumer packaged goods (CPG) manufacturers. With a business model that relies heavily on in-store purchases, how do you connect with shoppers who are suddenly staying home, especially when it’s the stores—not you—that know your customers best?

Many CPG brands are recognizing the value a Customer Data Platform (CDP) brings to their business and their customers. From a traditional marketing perspective, a CDP improves ROI, increases consumer loyalty, and drives hyper-personalization. As more CPG brands embrace a direct-to-consumer (DTC) strategy, the importance of a CDP to unify customer data is becoming even more clear.

But is knowing your business would benefit from a CDP enough reason to make an investment now? 

A key criterion when considering a new technology is to determine whether it is future-proof. In other words, will it keep up with an evolving marketplace and changing needs without needing to be replaced? One approach to understanding if a technology is future-proof is to consider the technology’s ability to meet the aspirational needs of your business.

Based on discussions with leaders in the CPG industry, we’ve identified several key aspirations for CPGs to consider when selecting a CDP vendor:

  1. Ability to truly know your customers through identity resolution
  2. Flexibility to easily add new data sources and obtain new analytics 
  3. Opportunity to build trust through data privacy and security compliance 

Let’s take a closer look at each of these areas.

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#1. Identity Resolution

Unlike many industries, CPG brands suffer from a lack of first-party data. This gap in first-party data is primarily an artifact of the traditional routes to market for CPGs, namely through wholesale distributors and retailers. So, the ability to unify first-, second- and third-party data is absolutely critical for CPG industry leaders and will become even more so as we move to a “cookie-less” world.

Identity resolution is an approach to analyze disparate data sets and resolve a consumer’s identity through different attributes, such as email addresses, device IDs, and more. The process of unifying and stitching together personal and anonymous information is typically automated through software solutions. The output is a persistent identifier that is assembled through both algorithmic and statistical analysis.

Through identity resolution, a CPG manufacturer increases the likelihood to truly “know” the consumer—and to be able to personalize engagement and ensure consistency of messaging. Additionally, by having a unified golden record for each of your consumers, marketing investments become more efficient, ultimately saving you from misspending your marketing budget.

#2. Data and Analytics Flexibility

Change is inevitable in the marketing world. From new data sources to new privacy regulations to new activation channels, your technology needs to be flexible enough to meet changing challenges without a lot of fuss. When evaluating CDP technology partners, look for a solution that does not lock you in to specific data integrations, import formats, and technical structures. Some critical points to consider:

  • Does the CDP have a schema-flexible data ingestion architecture?
  • Does the CDP have an open platform with a large library of pre-built connectors to enable faster time to value?
  • How scalable is the platform for the inevitability of data growth and its ability for data processing at scale?
  • Does the CDP have the ability to be highly configurable for custom use cases that will differentiate you in the marketplace?

We don’t know what big change will disrupt the market next, but choosing partners with proven track records of flexibility can prepare us for the future.

#3. Data Security and Privacy

A Gartner study found only 53 percent of consumers trust big brands and are confident that they are reliable and competent. Even worse—only 17 percent say they trust brands with their personal data. This crisis of trust can become an opportunity for companies willing to prove they have their customers’ best interests at heart.

As data privacy regulations become stricter and more pervasive, CPG manufacturers who exceed consumer expectations gain a competitive advantage. Rather than viewing compliance as a box that needs to be checked, they understand it’s an opportunity to build consumer trust. To really manage the complexity of data security and privacy, look for a CDP that will complement your existing consent management process and support the people working in those systems.

Creating a Future-Proof Strategy for CPGs 

Each of these aspirations are critical for CPG brands that want to create a competitive, long-term strategy—and data is at the center of all three. A future-proof CDP will easily ingest, integrate, and manage the data you have today as well as new data sources that will become available in the future. It is difficult to predict what the next big social channel, privacy regulation or unforeseen swing in customer behavior might be, but if your CDP is flexible, scalable, and adaptable, you’ll be ready.

Want to uplevel your data skills and knowledge? We’ve created a comprehensive (and free) course to take you from data collection to data-driven activation. Become a CDP expert at CDP Academy today.

David McCarty
David McCarty
David McCarty has over 30 years of experience in the CPG industry. He consults with CPG and retail clients to develop and implement strategic, digital transformation initiatives. David’s areas of focus include marketing, trade promotion, ecommerce, new product innovation, and supply chain. His passion and motivation are driven by helping his clients leverage innovative technology to drive profitable growth.
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