Learn what situations create data silos, and how your CPG brand can overcome them.
September 25, 2023
Nearly all CPG brands face data silos of some kind that fragment information and ideas, leading to a situation where it’s not possible to make the most informed decisions. Gathering data — and knowing how to use it — is crucial to today’s business success; it’s also one of the most difficult things to get right as the number of channels grow and become more fragmented.
Harvard Business Review (HBR) labels data silos “demons,” calling them “isolated islands of data [that] make it prohibitively costly to extract data and put it to other uses.”
Data silos are often spoken of in terms of data being siloed within organizations. But CPG companies find that there is another type of silo: when data they need to drive data-informed decision making are held by an external company.
This is often seen in the form of CPG brands losing data to the retail stores that sell their products. Data or analytics after that point usually only come in the form of second-party data, which often must be purchased from retailers.
The Adobe report, “Achieving Omnichannel Personalization at Scale,” sums up second-party data:
In short, [second-party data] is someone else’s first-party data, and it comes from partners of various types. For example, a consumer packaged goods company may get sales and customer data from its retailer or distributor or vice-versa. Publishers are another common source for second-party data.
Put simply, today’s businesses that don’t control and make relevant use of all the data they collect are at a competitive disadvantage because they lack effective capacity for personalization at scale.
“Customer intimacy at scale seems like an oxymoron,” says a study from Baylor University, “but big data makes it possible. Not only does big data enable a more complete view of the customer, marketing technologies also enable faster response in order to capture opportunities signaled in the data.”
Marketers must move toward personalization, and having consolidated data makes that possible.
“Direct 1:1 customer conversations are the starting point that can give you crucial data to effectively scale your personalization efforts,” Forbes reports.
There is no one-size-fits-all solution for bringing together data silos. Depending on your brand, industry, size and other factors, it may involve multiple third party applications, custom development or some combination of the two.
At Blue Bite, we focus on one factor of ensuring CPG brands have all the data needed to make the best possible business decisions: providing first-party data about product interactions, both before and after the sale — eliminating the need for brands to pay for (or, otherwise, lose) second-party data from retailers.
When you turn your CPG products into smart products by adding engaging, digital consumers experiences to packaging (via connecting technologies like QR or NFC), you access a world of data never before available directly to CPG brands.
This allows you to differentiate your products on today’s crowded shelves by encouraging consumers to scan products to gain the information needed to make a purchase decision.
And this connection doesn’t stop at the retail level. Consumers interact with your products after the sale, as well, giving you the opportunity to establish a long term connection directly with a consumer you otherwise would have never been in touch with.
Use this connection to add value to your products by supplying additional information; for example, product instructions, cleaning instructions and recycling instructions establish touch points throughout the life of the product (in addition to extending your sustainability initiatives by getting consumers involved).
This connection also opens a direct sales channel that empowers consumers to use the Blue Bite experience to reorder products, order related products and more. This channel connects consumers directly to the brand, regardless of where the product was purchased.