Direct to consumer: the data benefits it brings to CPG

E-commerce gives CPG an opportunity to go direct to consumers – and gather valuable first-party data as a result. Here are just some of the benefits.

The boom in e-commerce is changing the game for CPG. With traditional CPG sales channels under threat (thanks to the decline in bricks-and-mortar retail and growing brand competition on third-party e-commerce sites) online shopping gives CPG an opportunity to go direct to the customer. By cutting out the middleman, you can finally gather your own first-party data, getting to know your customers and taking control of how you communicate with them.

It’s not without its challenges – first-party data can be difficult to manage, and there can be hefty penalties if you don’t get it right – but with the right strategy, it is worth it. First-party data brings a whole wealth of benefits to CPG, from increased brand loyalty to streamlined stock management and production. Combine first-party customer data with your product data, and you could see better efficiency and cost reductions across the board.

Here, we look at just some of the benefits that going direct to consumer – and the first-party data that comes with it – can bring to your brand:

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Get closer to your customers

Direct to consumer sales enable you to get to know your customers through their data – and it allows them to get to know your brand better, too. With first-party data, you can engage in two-way dialogue with your customer base, ‘listening’ to what they have to say (through online shopping behaviour, data, social channels and marketing responses) and tailor the messaging you share in return.

Start selling in new products

The better you know your customers – and the more they shop directly with you – the better you will be able to sell them new products that match their preferences. With third-party sales, this wasn’t always possible: competition from hundreds of other items made it difficult to serve customers other products from your range, even if they consistently purchased one product from your brand.

Create a better customer experience

By going direct to consumer, you get to control how your customer interacts with your brand, not a third-party retailer. Instead of expecting customers to scrolling through seemingly endless virtual aisles to find your goods, you can choose a better way to present your products. You could create data-driven search that allows them to narrow down their options or create a more intuitive browsing experience based on a mix of product and customer data. With first-party data and customer opt-in, you have more opportunities to adapt individual experiences based on their previous behaviour and preferences.

Improve your marketing strategies

Instead of sending out mass-market promotions, direct to consumer sales enable you to start building your own customer profiles and target marketing outreach to customer segments. You can use customer data to send instant, reactive promotions based on recent purchases, or send prompts on products that have been left in a customer’s virtual basket, increasing marketing conversions. Combine this with detailed, accessible product data, and you can start to explore automated recommendations and mail-outs.

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Create loyalty programs

Brands are working harder than ever to earn customer loyalty, and it’s no longer enough to rest on the reputation of your logo. Loyalty programs are an effective way to drive consumers to purchase direct from your brand and keep them there, rather than returning to third-party purchasing. Coca-Cola’s digital-led loyalty program is a good example of this: the brand used big data analytics to onboard customer opinions at scale – through channels such as social media, email, and phone – and tailor their loyalty rewards (as well as their marketing and advertising) depending on customer profiles. Coca-Cola were able to collect first-party data through social authentication, while consumers earned rewards for sharing their data and purchasing Coca-Cola products. Consumers can also donate to charitable causes through the program, further cementing customer relationships with the brand.

Manage stock and supply levels

First-party data is giving CPG brands unprecedented insight into their customer’s purchasing behaviour. With customer data streamed from direct-to-consumer sales, CPG businesses are now able to manage their Distribution Resource Planning (DRP) more effectively, reacting to seasonal fluctuations and surges (or dips) in customer demand and using that information to manage their inventory and production. By adjusting supply chain actions accordingly, businesses can reduce waste and expenditure in the production process – potentially even exploring on-demand production.

First-party data is a big opportunity for CPG, but it’s not always easy. CPG brands that are selling direct to consumer face an influx of new, sensitive customer data: onboarding the right platform, taking the right steps to secure and manage that data, and integrating it with product data channels is vital to make DTC a success. To find out more about getting ready to take on vast volumes of first-party-data, download Amplifi and Semarchy’s latest guide: Data, unwrapped: the benefits of going Direct to Consumer.

Download the guide - Data, unwrapped: the benefits of going Direct-to-Consumer

Download our latest guide, where we take a look at how CPG brands can grasp this new opportunity with data:

  • Understanding the benefits of going DTC
  • Making sure you’re ready to process the data you collect
  • Utilising the customer data to benefit the wider business
Download Guide