The consumer packaged goods (CPG) industry is a tough one. Highly competitive, crowded, and frequently driven by price. Now producers are being put under even greater pressure, as consumers increasingly only want to buy from brands that they feel align with their own values.
With people becoming more aware of what they are putting into their bodies the focus on health issues is intensifying, coupled with sustainability and inclusivity being taken more seriously (particularly by millennials and Gen Z). This means that brands that want to retain, or even gain, a share of the market need to be seen visibly contributing to these causes.
Consumers are increasingly holding brands to account, wanting more information than can be delivered on a label or billboard. Businesses must now be able to show that their products have been sourced, produced, even transported, in a safe and sustainable way – along every step of the supply chain.
These demands for data are too important to ignore, with 99% of consumers saying that transparency is important in fresh food products, and 75% of consumers stating they would switch to brands offering more complete information1.
With the addition of regulators requiring enhanced transparency and accuracy around Environmental Social and Governance (ESG), it’s more important than ever that companies seek to establish a reputation of trust.
It’s no longer enough to simply state that a product is Fairtrade/organic/non-GMO. Consumers want to see the proof of this. They want evidence that a brand is treating its workers fairly and behaving in an ethical and safe manner – and this expectation extends across the entire supply chain. As younger generations gain more buying power this demand for rich information will increase, and brands need to adapt to this market now.
So far, gaining this full visibility across the whole supply chain has been difficult, with data being disparate and inconsistent across suppliers. However, with the ability to mass serialise products, digitally print unique identities onto goods on a mass scale is becoming more affordable. Coupled with the computing power and cloud capacity to share, process and store these massive amounts of data from each product, true end to end visibility is within reach.
This stands to revolutionise the CPG industry – enabling consumers and businesses to access all the information around a product’s life cycle by simply scanning a code – delivering true end to end visibility for the first time. It also provides businesses with both the challenge and opportunity of finally being able to meet customer expectations of transparency. Consumers will expect it, and it will be up to businesses to ensure they deliver it – or risk losing market share to those that do. Done successfully, this provides a chance to build trust, even generate loyalty, across a customer base that can be engaged with both pre and post purchase on an ongoing basis.
Maximising engagement to build trust
Up until now opportunities to directly engage with consumers across the CPG market have been limited due to the lack of product registrations in this arena. Product digital identity stands to change all that, as consumers are able to scan a code pre-purchase – giving a line of communication to potential purchasers, and further opportunities to engage post purchase – all with the aim of encouraging repeat or further purchases from the same brand.
Of course, this all depends on the consumer liking what they see when they access that information. As the market matures there is no doubt that there will be an increasing expectation of richer data and superior levels of transparency and authenticity.
Changing the game on product recalls
The benefits of this new technology go beyond meeting consumer demands for information on how a product is produced. It will also make a significant difference to the tricky area of product recalls.
No matter how focused a company is on safety, recalls are commonplace. How this is managed can have a significant impact on a brand’s reputation and the trust its customers place in it. In the CPG arena recalls are frequently done via in-store posters, social media, and email. There is very little opportunity for direct-to-consumer engagement, purely because the nature of the market means that product registration is rare (for example, a consumer would not register a bottle of shampoo, or a tin of beans).
As well as enabling companies to maximise both pre and post purchase engagement, it will also provide a direct channel to issue safety alerts should the need arise. Managing crisis points in this way will go even further in protecting, if not building, that all important consumer trust.
Plan now for the consumer of the future
There is no doubt in my mind that product digital identities are the future. In addition to meeting the ever-growing demands for data from the consumer, it also plays into the ESG movement by providing information on product life cycle, highlighting opportunities to enhance sustainability.
Businesses must start to plan now for the consumer of the future and consider how they will meet customer expectations but also maximise the potential opportunities and establish themselves as a trusted brand. This means:
– Starting to gather information across the entire product and consumer journey
– Unifying data from supplier, internal, and consumer facing applications around a unique and cloud enabled product identity
– Enabling each point of contact with the product to read and write contextually relevant data
– Let customers know. Highlighting the fact that they are fully transparent, and that consumers can easily access the product life cycle and a full suite of information about its origins
– The industry as a whole must work together to fully embed this new technology so that everyone can benefit.
It is essential that businesses start taking these steps sooner rather than later and use the plentiful opportunities that end to end visibility and product digital identities offer in order to build a reputation as a trusted brand – ensuring that they are the ones that consumers are switching to, not from.
Interested in hearing leading global brands discuss subjects like this in person? Find out more about Digital Marketing World Forum (#DMWF) Europe, London, North America, and Singapore.