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Accelerating your first party data strategy

  • 09 December 2021 / By Rob Wadsworth
  • FMCG Retail eCommerce Data and Analytics Digital Transformation

CPG (Consumer Packaged Goods) and FMCG (Fast Moving Consumer Goods) brands are facing a crisis. They fear their lack of knowledge about who is using or buying their products. Often, they have no direct relationship with the end consumer and a cookie-less future will further compound this issue.

A first party data strategy is the answer to these challenges. But obtaining information directly from the consumer is a difficulty in itself. What data should you collect, how do you collect it and why should people give it to you? We recently gathered business leaders to discuss these issues, including representatives from Google, Mars, Reckitt, and other major CPGs. Together we came up with some thoughts on:

A 2019 survey found that 63% of consumers surveyed across the U.S., Canada, and the U.K. “expect personalization as a standard of service.”

Data acquisition in a cookie-less world

Cookies will soon be a thing of the past. And third-party data is increasingly regulated. That means many brands are losing two of their main sources of connection to customers. In this absence, first party data is the answer, collected directly from the people who use your brand. But why should people give it to you?

Research has shown that over 50% of those who use the biggest online platforms have checked or adjusted their privacy and security settings in the past 12 months*. Collecting first party data requires trust. When it comes to changes in the privacy landscape, you should be looking at the user’s perspective as well as your organisation's. For users it’s all about transparency and fairness. They want to know how and why their data is collected and processed. Consumers who are able to manage their privacy are more willing to share their information.

Consent should also have benefits. The data you collect should be part of a value exchange which, in return, provides the consumer with benefits they acknowledge and appreciate such as personalised recommendations.

Who needs data anyway?

For every successful commerce solution there are many that don’t get off the blocks or later fail to scale. Every company needs to decide why it needs first party data at all. Is it to build specific functions in an e-commerce offering? Can it drive improvements in the supply chain?

It's estimated only 1% of companies are actually using their first party data insight to offer a better experience across all channels to the consumer. The value exchange is not there.

There needs to be a commercially oriented customer data well before first party data is collected.

Getting the right data

Deciding which customer group you are trying to serve and deeply understanding them is a basic first step for any business and over confidence in this knowledge has resulted in many brands delaying efforts to collect first party data, they assumed, they already knew their customers inside out.

This can be a mistake. The same people who visit stores are not always the same ones who visit websites. They may be looking for more convenience, better offers, or connecting their buying experience with multiple purchases that they wouldn't usually be able to get in one place.

It's also important to know who your most profitable customers are. It may be that 20% of your base actually generates 80% of your profit. Which 20% are those? The ones who don't generate profit aren't necessarily unimportant customers but the best market insight is likely to be from the latter. Only data can tell you this.

Also do you really understand your end-to-end operation? How will your employees, distribution networks and factories cope with a change in direction? Before setting up any solutions there is a need to work out what the most useful data sets are going to be to shine a light on how the business is operating. Treat data as a product and work out how it can be put into the hands of key decision makers so that they can quickly and easily access it. Look at your commerce tools and build them in a way that they surface useful information.

The move to D2C

A direct to consumer channel is about owning and understanding your customer. It might not be profitable at the first instance, but getting the data is a more holistic, long term investment that offsets the initial cost.

We are seeing brands test the water with out-of-the-box e-commerce solutions. Maybe 70% of their budget will go to the main brand site but a separate budget is used for a smaller e-commerce site with little connection between the two. However, the data generated by the D2C site will be invaluable for the entire organisation. It will provide faster and better access to genuine consumer data and insight. It can reduce spend with market research agencies and allow for more effective sharing across countries or regions due to everything being centralised.

Setting up forums or clubs are also a great D2C way to hear the voice of your customer. Subscription models are another holy grail for data collection that not only informs the brand, but provides data that can be also crunched and provided to a supplier or your retailer. Brands can get results exceptionally quickly by testing fake or prototyped products and services with live online audiences which produce insight that can then be used to accelerate R&D and messaging.

A first party data strategy relies on owning the data with consent. But it's also about leveraging that data to bring value to the consumer. This is what we call the value exchange: giving something back in return for permission to share data.

Hichem Maya - Head of CPG Industry Solutions, Google Cloud, EMEA

In conclusion

First party data is becoming essential for CPGs and FMCG brands. It helps you:

  • Gain intimate knowledge of your customers and invaluable insights to drive your innovation strategy
  • Design customer experiences with a data-driven edge

Successfully collecting first party data requires strategic thinking. Think about why you need it and what you will use it for. Experiment with commerce sites that allow you to have direct contact with your customers. Above all, remember that these customers are more likely to willingly share data when they get a better shopping experience in return.




* Improving the Ecosystem: A Digital Responsibility Report, Google Report Nov 2020

Want to know more? We can help you understand how major retailers are working to deliver more connected, insight-driven experiences through first party data.

Talk to our CPG specialists