The New Mating Rituals of Consumer Goods Companies and the Buyers They Want to Attract

Peacock with full feathersWIPRO VOICE: There was a time when brand recognition was a consumer product’s best friend. A pretty package and eye-level shelf placement, coupled with some targeted print campaigns or clever TV ads, and you had it made. Whether you sold fashion or food, golf clubs or barbeque grills, the right combination of product, price, promotion and in-store placement moved merchandise.

While all of those things are still important, they’re just not enough anymore.

The way that people buy products has fundamentally changed. Your product might catch their eyes; your name might ring a bell; but they’re not taking you home until they get to know you a little better. Love at first sight is less important than the deeper, mental connection.

“Today, customers are buying value—consumer goods that not only give them the most for their money, but make them feel good about their purchase,” explained Vivek Venugopalan, chief technologist, Retail, Consumer Goods, Transportation and Government, Wipro Technologies. “The economic downturn made buyers more focused on how to get the most for their dollar, and the rise of mobility has fueled information access. These two trends have converged to produce a more informed, more inquisitive consumer.”

In other words, people aren’t buying on just looks alone. They now have a relationship with the brands they buy before they make a commitment. That need has ushered in some significant trends in the consumer goods market.

Searching for “Product Right”

Today’s more informed consumer is using mobile technology to research products before they buy—not just searching for the best price but zoning in on exactly the product they want.

This type of due diligence is occurring whether the individual wants the purest organic milk, the fastest car engine or cosmetics manufactured without animal testing.

Retailers quickly recognized this trend and have enhanced their own search capabilities. Now, consumer goods manufacturers want to be a part of that journey.

“For a consumer goods company, the question is, ‘how can I make my product more relevant,’ ‘how can I stand out in the world of the cyber search,'” Venugopalan said. “Instead of simply pushing out pure product promotion, consumer goods manufacturers want to push out data that helps differentiate their products and their corporate personalities—the type of data today’s customers require to make an informed buying decision.”

Consumer goods companies are spending more time on providing compelling product photography along with more meaningful product descriptions to retailers. Food products offer more insight into what they contain; clothing and furniture detail fabric, manufacturing process and other pertinent information. The goal here is not necessarily more data but more meaningful data with less fluff.

“The second part of this trend is the ‘sponsored search,’ in which consumer goods companies incent retailers to make their product the first search result in a specific category on their website,” Venugopalan said. “In exchange, these companies offer products at reduced margins or provide other types of incentives.”

Creating the “Store within a Store”

In the traditional retail world, consumer goods manufacturers have long-recognized the value of product placement. These companies spend time and money on where and how their products were positioned in the store, paying premiums for end-caps or specified shelf space and providing detailed planograms to ensure the product was shown in the most consumer friendly, appealing way.

“Although in-store placement is still critical, consumer goods companies also want to create that same type of preferred placement on their retailers’ websites. They want to find a way to capture attention and drive sales online, like they did in store,” Venugopalan explained. “That need has lead to the online ‘store within a store’ concept.”

Basically, the online store within a store is a separate section of the retailer’s website that, when accessed, not only displays that manufacturer’s products but mimics the look and feel of that company’s specific brand. It’s important to note that this is not simply a link to an existing product site but a micro-site specifically designed for this purpose.

“Electronics manufacturers are the early adopters of this concept, but the trend is rapidly growing,” Venugopalan said. “It’s an opportunity to give consumers a different perspective of their brand. It also enables companies to interact with individuals who wouldn’t otherwise find the brand online.”

Taking the Relationship to the Next Level

But, today’s savvy consumers want to know more than product detail. They want to feel good about the brands they’re buying—specifically, the companies behind them.

“To stay relevant, consumer goods companies have to find new ways to educate people on how things are manufactured, how they treat their own employees and ways in which they exhibit social responsibility,” Venugopalan said. “And, they have to communicate these attributes as skillfully as they market their products.”

This trend is evident in all types of media, from TV ads featuring concerned health care product presidents to QR codes that detail sustainability programs to environmental impact reports on product manufacturer websites. To prove their commitment to the customers they serve, some consumer goods companies are creating mobile applications that, instead of offering discounts, provide information that deepens the consumer relationship by helping them find answers, solve problems or extend the benefit of the products they purchased.

For example, a dental product manufacturer created an app that teaches children about proper oral hygiene. Pharmaceutical companies are creating apps that show buyers how to improve heart health, lose weight or start an exercise program. A major health care product manufacturer has created an augmented reality application that can be launched by anyone (hopefully a kid) wearing one of its children’s bandages. The app displays an animated “show” designed to take the child’s mind off the cut or scrape—and hopefully, stop the crying.

These are the extra touches that will become the product differentiators going forward.

Applying Analytics to Gain Customer Insight

While consumer goods companies are working hard to get their brand personalities in front of the prospective customer, they’re also using analytics to find out more about the people who buy their products. Instead of harnessing point-of-sale information only, they’re gathering data from any touch point and incenting consumers to “tell them more” through loyalty programs, promotions or discount programs.

“Today, companies are using analytics to not only better understand the consumer but to watch changes in buying patterns, so they can more quickly respond to the trends,” Venugopalan said. “This also enables manufacturers to come out with the right product assortment. For the fashion industry, which typically works in six-month cycles, analytics ensures they’re producing the right items in the right amounts for market demand.”

Since manufacturers share risk with retailers for items that don’t sell, this ability to predict demand becomes particularly important.

“Analytics also enable consumer goods providers to become a real asset to “mom and pop” stores that don’t have the data access of large retailers. Using analytics, companies can tell their smaller retailers the specific assortment they need—and it works like magic,” Venugopalan said. “The retailer sells more and the consumer goods company builds loyalty. With analytics, everyone benefits.”

Going Local with Promotional Campaigns

Venugopalan also sees a shift in the way manufacturers are handling promotions.

“In the past, consumer goods companies built a unified platform for multi-country campaign management,” he said. “Now, many of these platforms include tools for customization at the local level.”

For example, an online coupon promotion designed for smartphone users may work flawlessly in the United States, but in India, where many people use feature phones instead of smartphones, a text promotion might be a more effective way to reach the target audience.

“The campaign and the analytics used to measure the campaign’s success are the same, but the method of interacting with the consumer changes from country to country, based on the way each segment uses technology,” Venugopalan said.

Making a Long-Term Commitment

Clearly, the way consumers shop and make buying decisions has dramatically changed, forcing a fundamental shift toward digital transformation. To thrive, consumer goods companies are using new technology to both become more valuable to their retailers and connect their customers with their brands in a multitude of ways.

And, from all indications, it’s a match made in heaven.

1 Comment on "The New Mating Rituals of Consumer Goods Companies and the Buyers They Want to Attract"

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  1. Lynn Fleck says:

    Valuable info about our changing retail environment.

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