Behavioral changes in modern commerce, exemplified by millennial generation shoppers, are forcing consumer packaged goods (CPGs) companies to take a more targeted tack in their efforts to build lasting customer relationships. But crafting brand loyalty through personalization is no mean feat for Clorox and other CPGs companies that are struggling to build engagement in an age where ecommerce is spoiling consumers with convenience.
In a move to rise to the challenge, Clorox has created a ninja team of sales, product and IT leaders to experiment with novel approaches to marketing its products, including Brita water pitchers, Hidden Valley dressings and Burt’s Bees lip balm. Made of sales, marketing and IT leaders this Sense and Respond unit leverages social media, software from the world's leading marketing technology vendors and the internet of things (IoT) to help Clorox burrow more deeply into consumers’ consciousness.
“It’s about giving the right message to the right person at the right time,” says Clorox CMO Eric Reynolds, who works closely with CIO Manjit Singh to support the corporate 2020 Strategy. “That transformation requires an enormous rethinking of data and technology and also in how we approach marketing.”
Minding the consumer gap
"Enormous rethinking" is no overstatement. CPGs companies sell their products to retail powers such as Wal-Mart, Target and Amazon.com, which sell them directly to consumers. This business-to-business-to-consumer model means CPGs don’t see content and data created by those shoppers, which challenges their ability to build brand affinity. And in a world where ecommerce companies are zipping personalized recommendations to consumers' connected devices, traditional TV, radio and print marketing advertising campaigns do little to bridge the gulf between CPGs firms' dozens of brands and their customers.
Millennials and Generation Y shoppers want to order more products online and they don’t want to wait long for them. CPG companies aren’t built for the instant gratification expected in an age where companies are discussing same-day delivery via drone. “When you’re in an environment that is real-time and on-demand, and you want it to speak to you as an individual, that’s a formula challenge for us because our model was built on mass and scale and now we have to get personalized and real-time,” Reynolds says.
CPG' challenges are compounded by the mindset of millennials, which Reynolds says tend to seek brands that share their core values and speak to them as individuals. “That is a small statement and a massive change,” Reynolds says. “You can’t count on your credibility as a large national brand as evidence of trust … you have to work harder to tell people it is a product that meets their needs but comes from company or brand that shares your values."
Clorox' Sense and Respond team is producing specific content based on consumer online activities and interests. It uses several technologies from leading companies such as Facebook, Google, IBM and Oracle to track breadcrumbs consumers leave as they visit a website, watch a video or purchase a product. Although these tools help inform Clorox social media branding and marketing campaigns they also create a lot of data, which is difficult for any CPG with dozens of brands to churn through.
"We collect vast amounts of data and cutting through noise and finding relevant data us getting more and more difficult," Singh says. "And the technology to help you sort through that noise is still evolving." Even so, Clorox views such predictive analytics as essential in helping it glean consumer insights and adapt to them in real time.
Tapping IoT to reach the consumer
While social media can help CPGs cultivate a direct relationship with consumers, Clorox and its competitors must also figure out how to crack the messaging nut, says Charlene Li, founding analyst of the Altimeter Group consultancy. Facebook Messenger, SnapChat, WeChat and other platforms have become increasingly popular among millennials and Generation Y but they remain largely invisible to brands unless a user posts something to social media. "All the more reason why you want to develop a direct relationship with people through social media so they start following you," Li says.
Independent of the Sense and Respond activities, Clorox offered a glimpse of what may be the future of commerce for CPGs companies last year when it rolled out a smart Brita Infinity water pitcher equipped with sensors that senses how much water passes through its filter and automatically reorders a new filter from Amazon.com as needed. Singh says consumers can expect to see additional IoT services from Clorox.
"The beautiful thing about IoT and sensors like the Brita pitcher is that it just orders it for me," Li says. She says the data generated from sensors could help Clorox and other CPGs generate powerful insights. For example, she says that smartphone sensors could eventually enable Clorox and other brands to triangulate exactly who is consuming a product by their proximity to it in a household. "If I could detect who is using a product that begins to change things," Li says.
Reynolds says the company will go wherever it must to serve customers. "The way consumers can find and buy products is going to explode in ways that will be more frictionless," Reynolds says. "Our challenge is to make sure that as shopping behaviors change that we are there."
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