CPG brands must avoid blanket approach on mobile: report
Mobile is driving the need for consumer packaged goods brands to have a deeper understanding of different consumer groups, as some are clamoring to engage directly while others are open to the possibility if approached correctly, according to a new report from IBM Business Value.
With mobile driving the desire of consumers to interact with consumer packaged goods brands directly and making it easier to enable such direct interactions, these marketers must recognize that not all mobile consumers are created equal, according to a new report from IBM Business Values.
The report, Brand enthusiasm: More than loyalty, reveals that a group of consumers called Brand Enthusiasts are also mobile leaders and more likely to look for new brands on their phones while shopping in a store. Winning over these consumers is critical for CPG brands? future success but they also need to understand how to reach other consumers on mobile.
?From a CPG standpoint, traditionally the mobile and digital channels have been viewed as primarily as a sales mechanism,? said Julia Davidson, global consumer products lead at IBM Institute for Business Value. ?And what we found is it is not just about sales, it is about engagement.
?That mobile channels are opening up the doors to establish that direct relationship,? she said.
?Marketers really need to understand the consumers and how they differ. You can?t really have a one-size-fits-all strategy, even from a mobile standpoint. So understanding those consumers and then catering to those consumers in a relevant way.?
A key takeaway from the report is that in the next two years, all consumers plan to dramatically increase the use of alternative distribution models such as buy online, ship to home; buy online, pick up in store, and auto-replenishment.
The charge will be lead by Brand Enthusiasts, but other consumer groups will increase their use as well.
The results show that buy online, ship to home will grow 42 percent in the next two years, buy online, pick up in store 178 percent and auto-replenishment 382 percent.
The direct approach
CPG brands have typically relied on third-party data to understand consumers. However, the growth in mobile increases the need for them to have more direct knowledge of their consumers.
On the one hand, mobile has empowered consumers with access to information about the products they are interested anywhere and anytime.
At the same time, mobile boasts capabilities such as location, push notifications, augmented reality and more that equip marketers with ways to meaningfully engage consumers.
The IBM report pinpoints three different types of consumers, each of which should be targeted differently on mobile.
Brand Enthusiasts are mobile leaders, with 72 percent having Internet access via their phone and 63 percent saying they often look up information on their phone about products when shopping in a store, almost 10 times more than the other consumer groups.
These consumers are critical for marketers because they exist in every geography and shop across all categories.
They are interested in connecting directly with brands online, seek innovation and are willing to share personal data with businesses they know.
These consumers also have the potential to bring along more ambivalent consumers as the influence of digital channels continues to grow.
Interestingly, the mobile behaviors displayed by brand enthusiasts are even stronger in growth markets such as China and Russia.
CPG brands that embrace Brand Enthusiasts faster than the competitive will be at advantage. This means experimenting with new systems of engagement, involving them directly in discovery and development, adopting a two-way dialog and leverage the insights they are willing to share.
?We believe that our study show, that particularly for this group called Brand Enthusiasts, it is actually not about the brand on the door, which is the retailer, or even the brand on the floor, which is the product, but it is actually what we are calling the brand on the screen,? Ms. Davidson said.
?The fact that digital channel are really opening up the door, particularly for CPG or brand marketers to reclaim that consumer relationship and obviously mobile is a huge part of that,? she said.
?Our point of view is that marketers need to get on mobile. But they also need to insure to structure their mobile strategy around a really deep understanding of their consumers.?
Brand Ambivalents, many of whom are millennials, represent the largest opportunity but are more selective in how and when they want to engage.
These consumers need to be approached and catered to in contextually relevant ways, something mobile is particularly good at enabling. This could include event-driven communications or need-based exchanges. IBM suggests CPG brand test reach and engagement strategies to delight this group. Also, be prepared to back up any statements with authenticity and action.
Other consumer groups include Product Purists, who are older, traditional market consumers that prefer products that are locally made, as well as Disassociated Shoppers, who are price sensitive, traditional market boomers who want to be left alone.
These consumers are more likely to be swayed closer to when the purchasing decision is being made and, here again, mobile is well suited to deliver this type of engagement. IMB recommends employing mobile promotion tactics so that brands can compete with private labels.
Another possibility would be to develop a mobile app to offer targeted, in-store promotions and timesaving price comparison features to cater to their price-sensitive, utility- focused preferences.
?There are these other consumers groups, that we call the product purists and disassociated shoppers, these shoppers are really looking for more value and utility,? Ms. Davidson.
?The mobile implication there is there is an opportunity to target these consumers at the point of sale,? she said. ?For example, offering them real-time offers or things based on their past purchases in order to deliver that value and utility.
?Ultimately, it means targeting your mobile strategy based on consumer preferences and behaviors.?
Chantal Tode is senior editor on Mobile Marketer, New York