By Garner Andrews, Senior VP Digital Experience, Epsilon

Partner Perspectives

In this three-part series, we’ve been discussing how Consumer Packaged Goods (CPG) companies can drive growth. In the first two posts, I addressed two trends: selling direct and exploiting new models of selling for local markets. Our final trend is about leveraging digital innovation to create brand experiences.

Trend 3: Create brand experiences, don’t just sell products

By powering the physical product with smart technology, CPG brands can unlock new value throughout the entire product lifecycle, using real-time data to build an Internet of Things (IoT) ecosystem around it — powering applications that transform everything from supply chains to sales; from marketing to customer relationships. CPG companies already use IoT to streamline manufacturing, but some are also using IoT to deliver better customer experiences, whether by incorporating it into their products or by collaborating with other brands who offer IoT products.

McKinsey & Company, a global management firm specializing in CPG, believes that as much as 30%, or $50 billion, of the CPG industry’s sales growth in the next five years will come from online. And The Economist notes: “Now you see CRM methodology in places where it had not been applied before … [makers of packaged goods] can establish direct relationships.”

Using real-time IoT applications and interactive media experiences, CPG product manufacturers can generate new revenues through marketing and service innovations as well as cost savings through smarter supply-chain operations.

Leverage IoT and supply chain data for improved customer experience

To succeed, you need to build a personalized digital relationship with end-consumers. A way to do this is by applying real-time tracking intelligence to make logistics more efficient: You need to be able to query your supply chain in real time to know where your products are, how they are being used, or whether they’ve been tampered with.

An example is cheap sensors on perishable goods that measure temperature and placement and send a warning if the products are not being stored correctly. With sensors on supermarket shelves or the product itself, companies can identify if products are correctly placed, or how they move around the store to find the best placement.

When IoT data is combined with other data such as product, customer, or location data for a better understanding of how products are being used, you pave the way for an improved customer experience. To generate revenue, you need to turn products into a direct channel for e-commerce and use this data to boost the effectiveness of all marketing channels.

It also goes beyond IoT to create these unique experiences with the customer base. Brand loyalty in the CPG industry has always been a challenge, but with great brand experiences you can convert customers into brand advocates. For example, Nestle’s Nespresso brand takes an entirely new approach to brand-building using lifestyle marketing. The company creates an elegant universe that turns coffee drinking into a lifestyle - makes the brand competitive with not just coffee and coffee machine manufacturers, but also with coffee shops. I personally fell hook, line and sinker a few years ago, with one whole cabinet in my kitchen dedicated to their coffee pods. Nespresso’s gain is Starbuck’s loss!

To wrap up this blog series, as Forbes noted in 2017, traditionally CPG has lagged behind other industries in the jump to e-commerce. However, with advancements in supply chain management, mobile technology, and personalization, selling CPG direct-to-consumer (D2C) is now a reality. The CPG trendsetters are creating new models to do just that, but these brands need to ensure they think through how to attack each regional market appropriately as they expand globally. And, last but not least, don’t just focus on the selling, but create engaging brand experiences that turn customers into loyal brand advocates.


Garner Andrews is Senior Vice-President, Digital Experience at Epsilon, a Sitecore Silver Partner. Follow him on LinkedIn.