Florence Broderick

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

Territory Management

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.

About the author
Florence Broderick

Flo is the Chief Marketing Officer at CARTO, leading our Demand Generation, Content, Product Marketing and SDR teams to translate the value of Location Intelligence to existing and prospective clients, generating demand for spatial analysis use cases on our platform. Prior to joining CARTO, Flo was Global Head of Marketing and Communications for LUCA, Telefónica's specialist Big Data unit.

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