Responding to customer concerns around data privacy and security, both Google and Apple are implementing the removal of third-party cookies from their Chrome and Safari browsers. Apple’s measures will even extend to the apps it allows on its AppStore, so marketers will not benefit from iPhone users choosing alternative browsers – all will be blocked by the new iOS anti-tracking measures.
Google’s ban comes into play by the end of 2024, and Apple’s before the end of 2023. In short, it looks like the cookie has had its day.
This presents a significant problem to CPG marketers, who have historically relied upon third-party cookies to obtain essential consumer behavioral data. That route to information has always been a challenge for CPG companies since, unlike an e-commerce portal such as Amazon, the average CPG brand does not directly interact with its consumers, relying instead upon third-party distributors and retailers.
While Amazon has access to its customers’ browsing and buying behavior, CPG companies do not have access to information such as customers’ search histories, pricing preferences, and combination purchases.
Given the dearth of third-party data, we have been examining the potential for increasing access to both first-party (behavioral) and zero-party (voluntary) data from CPG customers. We have concluded that by increasing direct communication, companies can provide consumers with added value, get to know their preferences more intimately, and generate additional revenue.
Four Strategies for Direct Dialogue with Customers
Below, we have outlined four methods for talking directly to customers, which can help CPG marketers secure those all-important customer insights.
Strategy 1: Conversational Commerce
Conversational commerce describes the inclusion of chat-based messaging in an online shopping experience. This is offered to customers as a way of providing them with support, personalized recommendations, offers, answers to questions, and other useful chat-based experiences. Companies can integrate with WhatsApp, Facebook, Instagram Messenger, or voice-based services such as Google Assistant.
Customers are used to engaging in live chat on businesses’ websites, so it is a natural extension to offer similar services off platform, especially using a chat medium they are already familiar with. Here are some statistics on live chat used for conversational commerce:
- 68% of WhatsApp users called it the easiest way of communicating with a business. [source: SPECTRM]
- 71% felt their confidence about a business increased after messaging via WhatsApp. [source: SPECTRM]
- 79% of businesses admit that implementing live chat has increased sales and customer loyalty. [source: Kayako]
- 82% of US-based Millennials want to be able to make purchases on chat apps. [source: Clickatell]
It seems that demand may currently outstrip supply in terms of brands providing e-commerce opportunities on live chat apps. This demand is not too surprising. The immediacy and honesty of direct communication that a chat app offers beat the impersonal online shopping experience hands down. Here are some examples:
The mayonnaise giant ran a WhatsCook campaign on WhatsApp, inviting customers to register online and communicate via WhatsApp. Customers were invited to list the ingredients left in their fridge, whereupon a Hellmann’s chef would message back, recommending recipes the customer could cook using those items.
This fun, an interactive campaign was part game and part information service. It won significant customer loyalty, with 13,000 users registering and an average chat interaction lasting 65 minutes. Furthermore, the campaign won an estimated $150K in media coverage.
As one of the world’s largest consumer goods companies, it was inevitable that Unilever would join this lucrative trend. However, in India, it used WhatsApp to promote a public health charity campaign called Help a Child Reach 5, as well as for the more routine purpose of offering advice and consumer information.
Unilever set up a unique number for product support queries, which gained significant uptake, combining the twin aims of efficient customer service and all-important data collection.
Strategy 2: Digitizing CX
Every product has a unique stock-keeping unit, an identifier that can be used to link product use to consumer ID, often via the medium of a bespoke product app.
For instance, Gatorade launched a smart bottle, which linked each product to its GX App. The app allowed users to track their training performance by inputting key data, such as age, weight, rate of hydration, and so forth. This was no lightweight training app, however, with Gatorade having enlisted the likes of Serena Williams, Lionel Messi, and Jayson Tatum to devise training plans.
Of course, with each scan of a product code, Gatorade could also track customer consumption patterns as easily as its users tracked their athletic performances!
Similarly, diaper company Pampers created Smart Diapers, a product line, and app that tracks babies’ sleeping and peeing patterns to inform parents of their well-being.
Both examples show companies cleverly offering real value to their customers who have explicitly shared behavioral data, allowing companies to get to know their consumers better.
QR codes on the packaging are another way to link to proprietary apps and secure first-party data. Pepsi’s #summergram campaign allowed users to scan a QR code to unlock sassy, summer-themed Instagram filters, which Pepsi encouraged users to share by tagging the brand.
In so doing, Pepsi had consumers engage in product marketing while the company gained valuable behavioral and loyalty data.
Research by McKinsey reveals that 71% of consumers now expect personalization from the brands they choose and that 76% of them experience frustration when they do not get it. Designing a unique, satisfying CX via a branded app fulfills a growing need for consumers to connect with their preferred brands, and CPG companies would be wise not to miss out on this trend.
Strategy 3: Loyalty Rewards
Loyalty schemes and rewards are nothing new, having been around since the 18th century. However, in the 21st century, it is now possible to capture a greater quantity of unique data when you sign up a customer for a digital loyalty scheme.
The reason why this proves an eternally successful strategy for connecting with customers is easy to see – people love rewards. The transparency of the received value of a percentage discount, free service, or line of credit means that users are often willing to hand over significant personal data.
Expanded loyalty schemes can involve interactivity beyond the initial handover of data, however. In 2019, Domino’s ran a campaign where it offered customers free pizzas in exchange for uploading images of Domino’s pizzas, competitors’ pizzas, or customers’ self-baked pizzas. From this library of user-submitted photos, powered by AI image recognition software, Domino’s gained valuable insights into consumer preferences and competitor performance.
Although it has recently ended, Kellogg’s Family Rewards offered consumers rewards in response to scans of product receipts, through which it garnered insights into purchase patterns and demographics.
Leveraging its luxury product status, beauty brand Lancôme offers a three-tier loyalty reward program with rose gold, gold, and platinum tiers. These tiers are based on product points earned, with each tier opening an increasingly generous catalog of benefits.
Wondering how popular loyalty schemes are over 200 years after their inception? Here are some figures:
- 90% of brands have some form of customer loyalty program. [source: Zippia]
- In the US, there are more than 3.3 billion loyalty memberships, roughly 10 for every citizen. [source: Accenture / Forbes]
- 52% of consumers will join the loyalty scheme of a favored brand. [source: Yotpo / Forbes]
- 84% of loyalty program members will have made at least one points redemption. [source: Bond / Forbes]
There is no doubt that the loyalty program is here to stay, and innovation within this method of consumer communication has only begun. Developments in AI, machine learning, the metaverse, and augmented reality are continually pushing the boundaries of what is possible.
Strategy 4: E-wallets
E-wallets are virtual wallets that consumers can fill with vouchers or cash value to spend on specific products and services. E-wallets complete the customer journey circle by providing expenditure insights otherwise hidden to CPG brands. Remember that CPG businesses do not usually have access to point-of-sale data, which is jealously guarded by retailers.
By recording a data point from a customer’s redemption on a specific product, the CPG company can identify common product combinations, preferred pricing, and timestamped purchase information. It can analyze trends in this expenditure data and use the resultant information to devise personalized offers and product combinations, thus maximizing revenue.
As with all these strategies, e-wallets can only work when they offer real value and convenience to the consumer.
Companies can offer universal digital coupons, which can be added to e-wallets for redemption either in store or online. They can also take part in multi-retailer coupon schemes, where their product will be discounted at a range of stores. In both cases, data about the specific purchase is sent to both the brand and retailer.
Tea brand Halfday recently leveraged this strategy with success, using an SMS-messaged Venmo voucher to send purchasers to Target stores for an initial free can, achieving a 41% customer retention rate from these digital referrals.
During the COVID-19 pandemic, e-wallet use among consumers grew significantly, as e-wallets provide a quick and contactless method of payment. The 2021 FIS Global Payments Report predicted that by 2024, digital wallet usage would have grown by over 38% from 2020. Over 40% of North American ecommerce transaction volume will occur via e-wallets, the report concludes.
Conversational Commerce is Here to Stay
Getting to know and understand your customers directly is a win-win strategy for consumers and brands. Particularly for the often-opaque sales landscape of CPG products, the four methods outlined above provide unique points of access into first-party data, proving that whatever way the cookie crumbles, customer insights can be obtained at scale.
Evalueserve works with CPG companies to derive such insights and develop strategies to keep that data pipeline flowing. Contact us today to talk about our strategy research and competitive intelligence solutions.