At the beginning of 2020, most of P&G’s products were sold in brick-and-mortar retailers. When COVID-19 struck, they had to go back to the basics: refocusing on website quality, partnerships with e-retailers, and making information available online to sell brands without in-store promotions. In other words, they had to rechannel their path-to-purchase strategies to serve consumers when consumer behavior changed drastically and quickly.
Over the last 18+ months, large and small CPG companies have grappled with these same challenges: the explosion of eCommerce, the rising demand for sustainability, a shift in consumption from makeup toward skincare, and a massive increase in time spent on social media. As the pandemic accelerated the impact of technology and shifted consumer behaviors seemingly overnight, businesses have had to become even more innovative and agile to keep up.
In a space where the only constant is change, we talked to leaders in CPG and marketing experts to understand their most effective techniques for adapting to the ever-changing digital landscape and equipping their marketing talent for success. The top answer? Getting even more customer-centric with deeper and more frequent connections to their consumers.
Let’s break down what this means in three steps:
1. Consumers expect peak digital experiences that call on marketing to transform.
The growth of digital shopping last year was shocking, and it may be slowing down — but not by much. 2020 showed a 25.7% surge in eCommerce sales, and eMarketer predicts 2021 will bring another 16.8% gain, taking the global eCommerce sales pie up to nearly $5 trillion. Alongside this behavioral shift, consumers have experienced widespread emotional trauma that shifted all life priorities. This changing landscape sped up the need for digital transformation in marketing — not only in reaching consumers through digital channels but using technology to understand what they need in this new context.
“It’s easy for brands to sound tone-deaf,” recalls GA instructor Terry Rice, digital marketing expert, business development consultant, and writer for Entrepreneur magazine. Marketers need to “[take] the time to learn about consumer behavior shifts — and take the time to deploy empathy in marketing: we hear you, we understand you, and we’re here to support you.”
The social trends of the last 18 months have challenged marketers to up their game, particularly when it comes to winning over Gen Z. “They stand up for their values, they stand up for diversity and inclusion, and they have a big push in demand on sustainability,” says Philipp Markmann, CMO of L’Oreal and member of our Marketing standards board. In this climate, you have to bring real value beyond the product you make and tell consumers the causes you stand up for.
While this emotional challenge doesn’t fit with the classic business models of maximizing shareholder value (at least in the short run), CPG marketers across the board understand that they can’t fall into the trap of trying to optimize toward a past that no longer exists. Luckily, this is a challenge that cuts right to the heart of marketing principles, and marketers are best-prepared to create the solutions.
“More and more business questions will become behavioral questions and psychological questions because relying on past data to predict future behavior is increasingly unsafe,” emphasizes Rory Sutherland, vice chair at Ogilvy UK. “We vastly need marketers to elevate themselves in status and influence… understanding wants, needs, motivations, and fears have suddenly become 10x more important in 2021 than it was in 2018.”
2. Stay plugged into evolving consumers through innovative digital collaboration.
Shifting alongside consumer behaviors means mobilizing the digital transformation work that brands across the CPG space have been doing. Companies like Shiseido, P&G, and L’Oreal have invested in digital infrastructures to prepare for this future.
While L’Oreal has spent over 10 years building on digital marketing capabilities, COVID-19’s “massive digital stress test” required marketing and commercial teams to be bold and try new things. This required creative thinking and experimentation across teams — what L’Oreal calls a “company collaboration accelerator.”
“In March 2020, every machine learning algorithm you had for optimizing traffic was worthless, Ben Harrell, CMO at Priceline and member of our Marketing standards board, pointed out. “Data from yesterday and today is what matters.” Yet amidst this rapid consumer change, the marketing industry has seen a steep decrease in the cookies and other data streams they once relied on for personalization, meaning marketers need to rebuild the customer journey practically from scratch.
That’s where data literacy comes into play. Marketers need personalized customer data from other in-house teams, which increases the need for tight internal systems and communication of first-party data. This requires not only a shared digital language across marketing, data, and product but a digital literacy about information systems like MarTech. “Then you can start having meaningful conversations with your engineers to say, hey, I want to do XYZ with this consumer segment…can we potentially integrate a third-party service that is API-led?” Ogilvy’s Sutherland illustrates.
This type of collaborative innovation requires marketing to have the vocabulary to work with other teams to help solve complex technical problems, as well as the growth mindset that is so fundamental to digital culture.
In the long run, CPG leaders expect this tight-loop connection with customers to get even faster. Beyond simply protecting user privacy, the democratization of data is giving consumers more ownership of their data, which will ultimately challenge marketers to innovate commercial models directly with the customer based on the value of that data.
Salim Holder, founder and CEO at 4th Ave Market, is working toward making that vision a reality in this decade: “In 2030, we’re integrating our business model with the community we’re trying to deliver value to… and we provide financial incentives for the community.” This might mean discounts in exchange for sharing information and building strategy around the way communities engage with products organically. “As a result, the data that we get will allow us to make all the decisions… and [source] the information and the knowledge from the community that is also there to provide value in itself.”
3. Skills for a dynamic world — and the culture that keeps them fresh.
When it comes to enabling marketing teams to innovate, marketing leaders are unanimous: there is a need for constant learning.
“Instead of looking at ROI, we should be looking at the cost of inaction. If consumers have a pain point, it’s on us to solve customer problems,” Matthew Tumbleson, P&G entrepreneur-in-residence, stresses. “It needs to be an ongoing thing where we are upskilling forever.” When consumers have a good experience elsewhere, it’s on your brand to do it better, or you’ll be creating the conditions for you to lose. This means making sure they have the “hands-on-keyboard skills” — those that they’ve historically outsourced to agencies — in-house. “Even at P&G,” he says, “it requires continual improvement.”
At Shiseido, digital literacy is stressed across teams as the basis of good decision-making. That’s why Roxanne Ong, head of digital transformation at Shiseido, invests time and energy in ensuring that there is a common digital literacy across all employees.
“Marketing has become such a monster, if you will, as a disciplinary approach,” Ong says, so it’s hard to ensure everyone has the baseline skills that often aren’t taught in school or MBA programs. “What GA has done is crystalize the fundamentals a true-blue marketer needs to have on a foundational level before they can move on out to an expert level.” Shiseido used GA’s CM1 assessment to get a baseline check on their teams’ skills to identify gaps. From there, she leads teams to aspire to be a “T-skills employee,” one who possesses skills across the board to go deep in one of their functional fields.
Not only are marketing skills assessments like CM1 good for identifying development areas for teams, Entrepreneur magazine’s Rice points out, “For someone who’s an expert, it’s going to reveal blind spots and opportunities… If you’re an expert, it’s a good way to make sure that you’re aware of what your team’s doing and to make sure you’re up to date with best practices across platforms.”
Ultimately, though, Ong says, “Equally important to skills is culture.” Beyond the specifics of hard skilling, Ong emphasizes the need to invest in digital culture, i.e., take risks, have curiosity, and collaborate — evergreen soft skills. There will always be so much unknown, so you need to create a culture of constant learning to be responsive to consumer changes and build new solutions to problems. “It’s a day-by-day, week-by-week situation. The idea of being data-driven in the digital age cannot be underscored enough: keep your ears on the ground for the data pulses, large and small.”
Beyond curiosity, this takes courage: “Have the courage to try to actually go to a place that’s unknown to you. Understanding the nuance and how to do it well is a whole different story altogether.”