CPG Marketers to Use Buyergraphics in Personalized Promotions

by | 2 minute read

Ear­li­er this week, I high­light­ed an Adver­tis­ing Age arti­cle about the shift in the CPG indus­try as mar­keters move resources from tra­di­tion­al to dig­i­tal ad cam­paigns. Anoth­er study, this one is from Catali­na, sug­gests that a move to gen­er­al dig­i­tal isn’t cost effi­cient for most large food cannedfoodsmar­keters. Catalina’s research shows that mar­keters are bet­ter served by per­son­al­iz­ing their pro­mo­tions based on ‘buy­er­graph­ics’.

Food mar­keters typ­i­cal­ly roll out near­ly 2,000 new prod­ucts or prod­uct exten­sions each year. Of these, few­er than 68% achieve a sales lev­el of more than $7.5 mil­lion. U.S. con­sumers go into the food store know­ing what they will pur­chase. Each shop­per tends to stay with­in a nar­row range of the brands avail­able in any spe­cif­ic cat­e­go­ry, a pat­tern of behav­ior which helps to explain why new prod­ucts often don't suc­ceed.

The fol­low­ing data shows the per­cent­age of the over­all UPCs, prod­uct types, pur­chased in gen­er­al by each con­sumer:

  • Dairy 1.7%
  • Cook­ies, crack­ers, bread 1.2%
  • Frozen 1.0%
  • Snacks and soft drinks 1.0%
  • Cen­ter store, gro­cery 0.9%
  • Cen­ter store, non-food 0.5%
  • HBC 0.2%

In any giv­en year, the typ­i­cal con­sumer pur­chas­es 260 UPCs (or prod­uct types). This reflects 0.7% of the aver­age 35,372 types of items avail­able to them on the gro­cery store shelves.

The Catali­na analy­sis also con­sid­ered the results of a Memo­r­i­al Day cir­cu­lar pro­mo­tion done by a major retail­er. Only 30% of the shop­pers who vis­it­ed the store actu­al­ly pur­chased 1 of the more than 1,100 items being pro­mot­ed. When pur­chase sta­tis­tics are com­bined with a con­sumer ten­den­cy to block out mar­ket­ing mes­sages, ana­lysts say the need for per­son­al­ized pro­mo­tions is clear. As mar­keters get a han­dle on Big Data and use ‘buy­er­graph­ics’ to pro­file indi­vid­ual shop­pers, pro­mot­ing new prod­uct launch­es to the right tar­get audi­ence should become eas­i­er and deliv­er a high­er ROI. The idea behind 'buy­er­graph­ics' is that each shop­per presents a unique pro­file and should be mar­ket­ed to as such.

If you're work­ing with food mar­keters, have you sug­gest­ed per­son­al­ized cam­paigns, maybe through a loy­al­ty pro­gram that ana­lyzes pre­vi­ous pur­chas­ing pat­terns?

Kathy Crosett
Kathy is the Vice Pres­i­dent of Research for Sales­Fu­el. She holds a Mas­ters in Busi­ness Admin­is­tra­tion from the Uni­ver­si­ty of Ver­mont and over­sees a staff of researchers, writ­ers and con­tent providers for Sales­Fu­el. Pre­vi­ous­ly, she was co-owner of sev­er­al small busi­ness­es in the health care ser­vices sec­tor.