At the start of a new business year, major brands all over the world are concerned about how to increase their company’s market share without necessarily going overboard in accruable costs.
This is especially true in the FMCG space with a stiff competition where most companies make use of technology to beat longstanding challenges and build on emerging opportunities in an evolving marketplace. Advancements in technology and the Internet of Things have made a transformative impact across the supply chain process — from assessing market demand using digital analytical forecasting to an integrated operations planning strategy. Furthermore, zero stock-outs at retailers and making new products quickly available are critical for FMCG companies.
Even with the proliferation of information technologies, FMCGs still face key challenges in the form of visibility of data and tracking of efficiencies in the entire value chain as well as the ability of brands to determine what consumers want. Not for a lack of trying on the part of brands, but most consumers can’t always describe or explain in clear terms what they want.
So where do we go from here?
Asking questions consumers can answer
Oftentimes, the purpose of most consumer surveys is directed at making predictions from a set of data. As good as it is, proper research is expected to ask around how consumers could recall the use of a particular brand and not predictive questions. So, it should be no surprise that our ability to forecast brand-related behavior often misses the mark given that brands are in a hurry to act on a set of data.
Data collection and analysis are the key steps of consumer research. To ensure accurate and unbiased results, brands should leverage an array of qualitative and quantitative research methods, alongside tools for interpreting the obtained input.
So, what does Consumer Research offer Brands?
With consumer insights, companies can map their customer journey and identify any gaps where there might be some, as well as find what works best, and what can be improved for a better user experience and customer journey, from awareness to purchase and advocacy.
Wayfair, a multi-billion-dollar online home goods retailer conducted consumer research and analyzed their data, and realized they needed to improve their overall customer experience. So, they built an app that lets users take pictures of items they see and like giving the information needed so Wayfair can offer recommendations
Not only did this research allow the business to improve customer experience, but the app now also provides the company with new insights into customers’ styles and needs. As a result, Wayfair saw a 50% increase in customer retention the year the app came out.
The limits of behavioral data
Behavioral data has its own drawbacks. Like other forms of data, it can be inaccurate. More importantly, it is largely unable to reveal people’s needs and motivations. For instance, if a product is seeing a decline in sales, secondary data can show you the rate of decline, but it cannot tell you why this is happening. Without asking people directly, it is hard to diagnose the problem and find a solution.
This isn’t to say that behavioral data is worthless, but that relying on it exclusively can lead you in the wrong direction.
Still asking how to grow in the new year!
As brands roll out different products this year, one thing to keep in mind to acquire and retain existing customers is that most meaningful learnings about our customers come from getting up close and asking them about their perception of their products.