Survivalists & Selectionists: How CPGs Understand Demographic Divides Through Location

Changing consumer habits are rocking the boat for the Consumer Packaged Goods (CPG) industry. In developed markets  including the United States and Great Britain  limited population growth and wage stagnation have diminished revenue opportunities for CPG.  In response  Strategy& reports  CGP brands have started splitting consumers into two key groups:

• Survivalists: consumers  typically millenials and retirees  on a budget and choosing products based on value
• Selectionists: consumers  typically Baby Boomers and Gen X  with disposable incomes and choosing more premium products

For discount chains  like Aldi and Lidl  and top-end companies  like Nespresso and Jo Malone  business is thriving because of this change in consumer behavior  but between these two extremes exists an entire segment of retailers and their respective CPG suppliers are suffering.

For CPG giants caught in a wave of digital disruption  it is simply not enough to win over a new grocery chain or reduce overhead costs. Instead  a consumer-centric business model is needed that uses location data to identify where CPG products fit within survivalists/selectionist socioeconomic divide  and then locates where to supply CPG products to ensure they appear to the right customers at the right time in the right locations.

Data-driven CPG leaders retain a competitive edge in today's consumer-centric market by asking targeted questions such as:

• How will the weather and large events in cities in our region affect soda consumption in 2018 based on 2017 sales data?
• Where and when is there a greater density of tourists in certain locations and how should we find new points of sales to serve them with popular savoury snacks?
• Where should we target online promotions for a new line of Men's grooming products targeted at Millennials with a high disposable income?

These types of questions cannot be answered by past intuition-based strategies for raising brand awareness and loyalty. Many CPG companies do not possess the necessary technologies needed to merge internal and external data in order to answer these questions  but recent examples of companies implementing data-driven practices at various organizational levels suggests changes are in store for the CPG industry.

Here are a few examples of the way location data is transforming different roles within CPG companies.

The Trade Marketing Manager: Product Launch Strategy

For trade marketing managers preparing a product launch  understanding which retailers  wholesalers  and distributors reach certain audiences by location is key to the roll-out's success. In this case  a Trade Marketing Manager needs to analyze which key grocery stores to partner with ahead of launching a new high-end shampoo brand. Using external transaction data (on credit card spending and ATM withdrawals)  demographic data from the CARTO Data Observatory  and points of interest data  it is possible to identify which stores would be best suited to reach their target consumer profile: females aged 25 - 34 with a high disposable income.

The Brand Manager: Point of Sale Planning

Increased competition for household brands from "challenger brands" means that identifying optimal Points of Sale is crucial for a Brand Manager's success. In this case  a Brand Manager is launching a new snack brand and has identified 20 to 29 year olds as their key target segment. In order to identify existing points of sale to flag to Account Managers and pinpoint key areas for them to recruit new ones  they are able to look at Millennial population density  relevant points of interest  and proximity to metro stations to guide their launch strategy.

The Sales Manager: Territory Management

   
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With the sales area of a CPG business typically accounting for 15 to 30% of the workforce  the way that leaders manage their field sales operations - in an industry which is still heavily focused on offline transactions - is extremely important. A growing number of Sales Managers are starting to use their CRM data in a more sophisticated way  prioritizing accounts based on their location  lifetime value  and growth potential. SalesQuest  which integrates with Salesforce and Einstein Analytics  allows sales leaders to drive strategic Territory Management decisions around resource allocation  expansion strategies  and alignment.

 Learn more about boosting field sales productivity with Location intelligence in our upcoming Webinar.  Check it out!

The Operations Manager: Supply Chain Network Design

Only 6% of CPG companies currently have a dedicated e-commerce supply chain team  and only 3% are able to fully track sales by channel  according to this BCG CPG report. A seismic Amazon-driven shift in consumer expectations means that supply chain network design is critical in keeping CPG distributors and their final customers happy. In this example we can see the potential for Operations Managers to use distribution centers  account locations  and routing technology to drive decisions around delivery assignment - drastically reducing mileage and the number of routes used.

When it comes to location  it's time for different departments across CPG companies to roll up their sleeves and understand that Location Intelligence shouldn't be limited to the analytics department. Understanding consumer behavioral data and its location context is critical  and these were just a few examples of the many use cases spread across different CPG verticals.

Want to find out more about the advantages of implementing Location Intelligence solutions across your CPG company? Join us at CARTO Locations.