Wholesalers & Distributors

Using customer data to grow a brand

Explore the effects of shopper insights on brand loyalty with John O’Reilly, Senior Vice President for dunnhumby.
Illustration: Shutterstock

With a broad array of market and sales data available today, some suppliers feel they have suf­ficient insight to understand which of their brands are performing well and which may need intervention. To get a true understanding of who is buy­ing certain products—in addition to why, how and when—a far more granular level of data is re­quired.

For instance: Which promotions are driving ROI? Does brand loyalty exist for certain products? Do a brand’s new products have a chance to succeed in the chosen market? Understanding shoppers’ needs are the key to confidently answering these questions and building sustainable growth for any brand.

Are promotions working?

If a brand is running a promotion for one of its products, the brand will hopefully have transaction data showing whether there has been an uptick in like-for-like sales during the period of the promotion. An increase in sales can probably be attributed to a promotional campaign—so far, so good, right?

But, what else can brands find out about that campaign that could help with future marketing activities and investments?

Here are a handful of questions that can help fine-tune future promotions:

  • Who is buying the product on promotion?
  • Are promotions canni­balizing sales from existing shoppers who would have likely purchased anyway at full price?
  • Are there ‘pantry loaders’ who are buying in bulk and bringing their spend forward?
  • Is one shopper buying three products, or are three shoppers buying one prod­uct each?
  • Are new customers only buying products on promotion, or are they becoming repeat shoppers?
  • Is the right discount depth and best promotional tactic/mechanic being used?

By knowing more about who shoppers are and what moti­vates them to buy a product, brands can more effectively steer their promotional spend and avoid waste.

Brand loyalty: Does it really exist?

It costs less to keep customers than it does to find new ones. But generating and then growing brand loyalty with shoppers are two of the biggest challenges for brands in the face of changing consum­er habits and the explosion of buying channels. Many marketers believe that brand loyalty no longer exists and that expensive mass marketing is required to continually acquire and reacquire shoppers to keep brand sales growing.

If brand owners don’t understand their shoppers and where there might be headroom for growth with existing or new products, they will struggle to meet consumer needs and nurture future growth. Industry sales data might tell brands what their market share is, but it won’t give insight into the wants and needs of shoppers. By analyzing available shopper data, brands will be able to answer questions like:

  • Are they only buying one specific brand, or do they also substitute with competitive brands within the same catego­ry?
  • Is one brand underrepresented in certain categories across the portfolio?
  • What events or factors are prompting shoppers’ purchase decisions, such as pack size first, then brand?

In addition, understanding switching, cross-shop­ping and retention behaviors are key KPIs brands can measure from granular shopper insights.

Give new products the best chance of success

New product development (NPD) is viewed as a great way to encourage existing shoppers to buy more of a brand’s prod­ucts and attract new shoppers to a brand, yet the failure rate for NPD is remarkably high. Convincing retail­ers to give up shelf space for a new product can be difficult, and if it doesn’t bring in the expected return on investment for both parties, retail­ers will be quick to de-list it.

In order to create a solid foundation for a new product, brands need to under­stand category dynamics and the likely universe of shoppers who have the highest propensity to purchase the product. Using shopper insights can help determine what proportion of the retailer’s customers you should be targeted with the new product, based on pre­vious purchase behavior and basket mix. It can also help brands determine which shoppers have a history of trying new products, so brands can then engage them with personalized offers and communications. Get­ting an early read of ‘trial and repeat’ behavior can help with targeting. These types of insights and measurements can ensure ongoing success of NPD for the brand and encourage strong partnerships from retailers on future NPD.

Category growth and shopper needs

Brands and retailers can both be win­ners if they work together to grow cat­egories. But to grow a category, it is vital that brands and retailers understand that knowing shoppers’ needs is required to make this happen. Here are a few questions to help uncover shoppers’ needs:

  • What are the gaps in the range?
  • Are there any un-met shopper needs that point to growth opportunities?
  • What is driving loyalty amongst shoppers within particular categories?
  • Did a promotion or new product launch drive overall category growth?
  • What’s the relationship be­tween certain products in the category, and which relationships matter most to shoppers?

Generating and keeping brand loyalty, creating excitement for shoppers in a sustainable way that doesn’t damage a brand (like over promoting), driving growth through innova­tion and increasing brand pene­tration through retail outlets are just a handful of issues that are keeping manufacturers up at night. The great news: Shopper insights can play a key role in solving these issues and giving businesses a competitive edge.

This post is sponsored by dunnhumby