CGT21 Sales & Marketing Report-postgate Consumer goods, CG, consumer packaged goods, CPG, brands, CG brands, direct-to-consumer, DTC, D2C, technology, trade promotions, COVID-19, IT, e-commerce, supply chain, e-mail, sales and marketing, marketing, digital marketing, consumer data, data and ana

Whether they termed it a pivot, a progression or an evolution, the pandemic took a bucket of ice water to any CG that hadn’t properly prioritized its digital capabilities and partnerships. But even with a firmer grasp on these new, digital-centric behaviors, CGs should resist the temptation to place consumers in “before” and “after” buckets, Forrester Research warns, as that “after” bucket remains in a state of constant flux. What’s more, consumers tend not to be the best judge of their behavior patterns. Successfully marketing to these new consumers requires a recipe of agility and creativity, and it continues to be an ongoing obstacle for the industry. Indeed, in the CGT snapshot survey, “meeting new consumer demands/expectations” was cited by 31% as one of the top three roadblocks to sales and marketing success. As consumers continuously shift and morph, marketers are leaning into the tech that can unlock a more granular level of understanding.

Shape-Shifting Consumers

What one word would you use to describe the collaboration of marketing efforts between CGs and retailers?

Growing

EVOLVING

CHALLENGING

LOYALTY

COMPLICATED

FRUSTRATING

DYNAMIC

INCONSISTENT

INADEQUATE

MINIMUM

EFFECTIVE

INDIVIDUALIZED

OPPORTUNISTIC

DYSFUNCTIONAL

IN-PROGRESS

RELEVANCE

LOW

PARTNERSHIP

Demand Agility

10 Sales and Marketing Trends Expected to Stick Post-Pandemic

Increasing e-commerce Growing customer acquisition costs Direct-to-consumer First-party data activation Personalization Increasing social commerce Increasing use of AI More virtual meetings/events Tailored consumer marketing Collaboration between departments

10.

Source: CGT Snapshot Survey

Believe there will be long-term changes in their behaviors and preferences

Source: Forrester Research, “The Consumer Behaviors That Will Endure After The Pandemic”

“Consumers notoriously underestimate how much more they will change over time,” notes the research firm. “Because the COVID-19 pandemic has had a longer and broader impact than many people initially expected, consumers are only just realizing that its repercussions will also be vast and long lasting. They often exaggerate how much they've changed in the past and underestimate how much their tastes, preferences and behaviors will continue to change in the future.”

How U.S. Online Adults Think They Will Fare After COVID-19 Cases Subside

Believe they will revert to a pre-pandemic sense of normalcy

16%

75%

Now that the world is shopping online at a historic rate, marketers require deep visibility into consumers to keep pace. This means knowing where they are now and where they’re going — without crossing the line. The only way to attain this is through data and analytics. And while consumer insights is top of mind for CGs and retailers alike, the top three roadblocks to sales and marketing success also have to do with data: working in silos (48%), lack of retailer collaboration (45%), and lack of key or cleansed datasets (38%). In the past, CGs may have used data to see where or why consumers were shopping, but marketers have now become content creators, and storytellers that are tapping into technologies like AI/ML to measure the emotional impact of their brands. For example, Mars recently launched a proprietary tool that tracks eye and mouth movements of consumers so it can determine whether a campaign is resonating, needs editing or should be scrapped altogether.

Content is King

... And Data & Analytics Too

44%

CGs using AI/ML for social media marketing/analytics

61%

CGs list consumer insights as a top area of analysis in 2021; up from 50% in 2020

PepsiCo has also been leaning into data and predictive analytics with its Pepviz insights framework release, calling on its data-sharing retail partners to drive growth for all parties involved. The framework is built on two data sets, termed Store DNA and Consumer DNA, and is designed as an agile and customizable solution. “We're focused on what's most relevant today and looking forward to predictive indicators — as certainly looking backwards in today's environment is not necessarily an indicator of what we would anticipate to happen in the future,” says PepsiCo SVP Kate Garner.

Use of AI/ML for Sales & Marketing

FULL DATA SET

Social Media Marketing/Analytics Digital Marketing E-Commerce/Omnichannel Salesforce Automation Direct to Consumer Revenue Growth Mgmt/Price Mgmt/Optimization Product Information Management Customer Relationship Management Category Management Retail Execution Trade Promotion Management/Optimization Assortment Planning/Optimization Loyalty Marketing Personalization Consumer Experience Management Mobility Digital Asset Management Customer Data Platform

44% 40% 36% 32% 32% 28% 24% 24% 24% 24% 20% 16% 16% 12% 12% 8% 8% 4%

Digital Transformation

Means Doing More with Less

In last year’s CGT Sales and Marketing Report, we reported that CGs were catapulted into digital transformation investments out of necessity as the pandemic forced in-store activities and field sales to temporarily shut down. Marketing budgets (along with real estate and travel) were also slashed, as they often are when any major disruption hits. In fact, according to Gartner’s 2021 CMO Spend Survey, the amount of company revenue allocated to marketing across industries fell from an average of 11% in 2020 to 6.4% in 2021 — a cut of 4.6 percentage points and the lowest turnout in the history of the survey. That said, consumer products sustained the smallest budget decline year-over-year. Not only were CG marketers forced to do more with fewer dollars, but in-store activities and field sales were forced to pivot to digital strategies. In the same Gartner survey, most marketing budgets were spent on pure-play digital channels at 72.2%. And while CGT survey results show that the CMO still owns the sales and marketing budget at 48%, it’s become a cross-functional task when it comes to the actual tech/tool selections process (48%).

Source: CGT, “2021 Retail and Consumer Goods Analytics Study”

Sales & Marketing/ CMO

48%

Who Owns the Sales/Marketing Budget?

Who Owns the Tools/Tech Selection?

45%

Cross-Functional Ownership

IT/CIO

Sales & Marketing/ CMO

IT/CIO

Cross-Functional Ownership

48%

10%

42%

Direct-to-Consumer

Default?

As CGs grow savvier about digital selling, so too do their attempts at DTC thanks to the well-known benefits of forging direct relationships with consumers. While not quite a mandate for all, more legacy CGs continue to explore how DTC makes the most sense for them — which is proving to be a key component for success lest they get distracted by FOMO and lose their value proposition. For Beam Suntory, this took the shape of a limited membership program for its Jim Beam brand that includes a quarterly Barreled & Boxed program initially available only in two regions, as well as an invitation to a virtual tasting event and a VIP tour of the company’s distillery in Clermont, Ky. It’s serving as a practical solution given the complications surrounding selling alcohol directly to consumers. Kellogg Company developed a DTC site for its Cheez-It brand that not only celebrates the brand’s centennial anniversary but also enables it to collect valuable consumer insights and bring product innovations more quickly to market. In addition to forging deeper connections, both companies can drive loyalty thanks to the first-party data collected through these relationships.

Nike’s membership program stands among the prominent success stories of a CG leveraging loyalty data today. With more than 300 million members and growing, the program drives repeat engagement and buying across both digital and physical retail. Buying member growth is outpacing new member growth, and expanding benefits to members has fueled a virtuous cycle that feeds consumer insights to product creation, inventory optimization and more, according to Nike president/CEO John Donohoe.

43%

Respondents currently or planning to invest in DTC in the next two years

Source: CGT Snapshot Survey

Embedded within the digital and DTC acceleration has been the subsequent rapid growth of social commerce. With consumers craving additional connections and having ample time to scroll, more consumer goods companies are investing resources toward social media to both engage and transact. As a result, CGs are getting smarter and more creative with this component of e-commerce, including through the use of social influencers. Brands that previously had shied away from them due to cost concerns are retooling their strategies as they’ve discovered the importance of the channel, Len Schlesinger, Baker Foundation professor at Harvard Business School and former vice chairman/COO of Limited Brands, tells CGT. The rise of the metaverse, meanwhile, is unlocking a new playground for brands like e.l.f. Beauty to experiment and engage new consumers, as the value of immersive digital experiences becomes more tangible. “Everything that can be shoppable is becoming shoppable,” Mike Proulx, Forrester VP, research director of the CMO practice, echoes to CGT. “If we fast-forward well into the future, we anticipate commerce taking a prominent place within the ‘metaverse’ as virtual worlds become interoperable with persistent avatars and currencies.”

Social Media and Future Commerce

Cola-Cola experimented with its first NFTs to mark International Friendship Day.

“There's a myth that social commerce is a buying channel. It's not a buying channel — it's a discovery channel, where buying is now made possible and you close the funnel.”

Surabhi Pokhriyal Worldwide Director, Head of Global Digital Commerce, Colgate-Palmolive

Whirlpool, meanwhile, is growing its global DTC presence in order to better meet the shifting consumer behavior surrounding home appliances, which, until the pandemic, had never been extremely attractive to consumers as a DTC category. “Consumers are going to buy products wherever they decide to buy products — whether that's direct-to-consumer with Whirlpool in our brands around the world, or whether it's through the traditional retail channels. It doesn't matter to us, as long as we’re leveraging our digital presence to differentiate our products and services. And that's really the name of the game.”

Matthew Meier VP of Global Technology Value Streams, Whirlpool Corporation

A Look at

the Tech Landscape

CGT asked about investment plans across 19 different sales and marketing tools for the next two years, as detailed in the full data set. Most notable among up-to-date investments include social media marketing/analytics, digital marketing and DTC — not surprising given the circumstances of last year. Other notable investments still underway include e-commerce/omnichannel, personalization, and trade promotion management/optimization tools. Where are CGs looking for upgrades in the next 12 to 24 months? Customer relationship management, personalization and loyalty marketing are top of mind, but perhaps just as telling are where there are no plans for investment. Many respondents note they don’t have plans to upgrade their salesforce automation or mobility tools (perhaps due to maturity of these investment areas and/or priority shifts from in-store activities), as well as IoT/voice commerce (is it still too new?). Regardless of the reasoning, remaining agile (while still hitting the right KPIs) is the underlying theme among solution investment and strategic pivots.

Sales & Marketing Investments

FULL DATA SET

SOLUTION AREA Product Information Management Assortment Planning/Optimization E-Commerce/Omnichannel Personalization Customer Relationship Management Trade Promotion Management/Optimization Consumer Experience Management Salesforce Automation Revenue Growth Management/Price Management/Optimization Category Management Retail Execution Digital Marketing Social Media Marketing/Analytics Loyalty Marketing Mobility Direct to Consumer Digital Asset Management Cause Marketing IoT/Voice Commerce

Click above to view CGs sales and marketing investments across 19 key business functions, as well as solution upgrade plans for the next 12 to 24 months.

UP-TO-DATE 32% 29% 31% 4% 24% 31% 18% 24% 11% 19% 18% 46% 48% 25% 22% 46% 36% 18% 11%

29% 18% 34% 32% 17% 31% 21% 7% 30% 22% 18% 25% 28% 18% 11% 21% 14% 11% 7%

Started But Not Finished Major Upgrade

11% 21% 14% 29% 34% 24% 25% 17% 22% 26% 25% 14% 10% 18% 26% 11% 25% 21% 18%

Will Start Major Upgrade Within 12 Months

7% 11% 7% 14% 10% 7% 14% 10% 7% 7% 11% 7% 10% 21% 11% 11% 11% 7% 7%

Will Start Major Upgrade Within 24 Months

21% 21% 14% 21% 14% 7% 21% 41% 30% 26% 29% 7% 3% 18% 30% 11% 14% 43% 57%

NO PLANS

Revenue Growth/Target

55%

83%

Top 3 KPIs for Measuring Sales/Marketing Success

45%

Marketing ROI

Profit Margin per Sales Reps/Teams

Key Takeaways

& Survey Demographics

CGT sent out a snapshot survey to its audience of consumer goods manufacturers (90%) and retailers (10%) for the month of August 2021. Packaged goods, food and apparel/footwear/ accessories brands made up the bulk of the consumer goods manufactured, at 86%, with others from the beverages, home goods/small appliances, and OTC pharma verticals. Company size was pretty evenly distributed, with 52% of respondents from companies reporting revenue of $1 billion and up, while 48% hailed from SMBs. Three-quarters of respondents are director level and above, and the top three business functions represented are marketing (21%), IT/technology and customer management/sales (both 17%).

48%

CG CMOs still own the sales and marketing budget; however, it’s a cross-functional task for the actual tech/tool selections process at 48%.

61%

CGs list consumer insights as a top area of analysis in 2021, up from 50% in 2020.

44%

CGs are using AI/ML for social media marketing/ analytics.

roadblocks to sales and marketing success are working in silos (48%), lack of retailer collaboration (45%), and lack of key or cleansed datasets (38%).

43%

CGs are currently or planning to invest in DTC in the next two years.

The top

About the Survey

Revenue Last Fiscal Year

< $100M

24%

21%

28%

24%

$100M to $499M

$500M to $999M

$1B to $4.9B

$5B +

Top 3 Primary Business Functions

Marketing

IT/Technology

Customer Management/Sales

17%

21%