In today’s digital age, consumer packaged goods (CPG) brands face an increasingly complex landscape. With the decline of third-party cookies and heightened privacy regulations, the importance of first-party data has never been more pronounced.

For CPG brands, building an effective first-party data strategy is not just a necessity but a competitive advantage, especially given the difficulty of measuring the impact of brand marketing as the vast majority of end-point sales happen with retailers rather than directly with the brand. One of the biggest challenges CPG brands encounter is knowing who their customers are, what they buy and how they like to be communicated with.

Brands such as Henkel have embraced omnichannel marketing by creating consistent, personalised customer experiences across all channels in real-time. This is only possible by putting in place robust first-party data foundations to deliver world-class experiences.

Understanding First-Party Data

First-party data is information collected directly from your audience. This includes data from your website, mobile apps, social media, and other customer interactions. Unlike third-party data, which is collected from external sources and has limitations due to data protection regulations, first-party data is unique to your brand and offers a more accurate and personalised view of your customers.

The Importance of First-Party Data for CPG Brands

Enhanced Customer Insights: First-party data provides a direct line to your customers’ preferences, behaviours, and needs. This data is invaluable for creating personalised marketing campaigns and improving product offerings, especially for brands with multiple product lines.

Compliance and Trust: With increasing regulations like GDPR and CCPA, relying on first-party data ensures compliance and builds trust with your customers. They are more likely to share their information if they trust that it will be used responsibly.

Cost Efficiency: Collecting and utilising first-party data can be more cost-effective than purchasing third-party data. It also reduces dependency on external data providers such as retailers.

Steps to Building an Effective First-Party Data Strategy

Define Your Objectives

Before diving into data collection, it’s crucial to define what you want to achieve. Are you looking to improve awareness of new products, enhance personalisation, or optimise your marketing spend? Clear objectives will guide your data strategy and ensure that your efforts are aligned with your business goals.

Collect Data at Every Touchpoint

Ensure that you are collecting data at every customer touchpoint: this includes your website, mobile apps, social media, email campaigns, and in-store interactions. The more data you collect, the richer your customer profiles will be. Tailoring campaigns to capture data such as the product lines they prefer and how frequently they purchase your products, leads to a richer understanding of your customers. This could be in the form of incentivised promotions or prize draws for example.

Segment Your Audience

Use the collected data to segment your audience into distinct groups based on demographics, behaviours, and preferences. This segmentation allows for more targeted and effective marketing campaigns. Collecting data about your customers is useless if you aren’t able to act on it or don’t have a plan to do so.

Personalise Customer Experiences

Personalisation is key to engaging customers and building loyalty. Use your first-party data to create personalised experiences across all channels. This could include personalised product recommendations, tailored content, and customised offers to increase product consumption or to incentivise customers to try a new product line.

Coca-Cola have proved the value of building personalised experiences. Using the power of the Adobe Experience Cloud, they achieved a 40% open rate for personalised rewards emails and a 63% uplift in click-through rates of their emails.

Measure and Optimise

Continuously measure the performance of your data strategy. Use analytics to track key metrics such as customer engagement, conversion rates, and ROI. Regularly review and optimise your strategy based on these insights to ensure continuous improvement. If your campaigns aren’t performing as hoped, perhaps more data points on your customers are required to allow for more accurate personalisation and targeting.

Overcoming Challenges

Building a first-party data strategy is not without its challenges. Here are some common obstacles:

Data Privacy Concerns

With increasing scrutiny on data privacy, it’s essential to be transparent about how you collect and use data. Ensure that you have robust privacy policies in place and that you are compliant with all relevant regulations.

Integration Issues

Integrating data from various sources can be challenging. Invest in technology that facilitates seamless integration and ensures that your data is centralised and easily accessible.

Data Silos

Data silos can hinder your ability to get a complete view of your customers. Break down these silos by fostering collaboration between departments and ensuring that data is shared across the organisation. This is especially important in situations where the business has clear lines of separation across different product lines.

Resource Constraints

Building and maintaining a first-party data strategy requires resources. Ensure that you have the necessary budget and personnel to support your efforts. Consider working with a partner that specialises in digital transformation and data projects to augment your capabilities.

The Future of First-Party Data

As third-party cookies face an uncertain future and privacy regulations become more stringent, the reliance on first-party data will only grow. CPG brands that invest in building robust first-party data strategies will be better positioned to understand their customers, deliver personalised experiences, and drive growth.

Building an effective first-party data strategy is a process that requires clear objectives, the right technologies and a commitment to data quality. By overcoming common challenges and continuously optimising their strategy, CPG brands can unlock the full potential of their first-party data and gain a competitive edge in the market.

By following these steps to stay ahead of the industry, CPG brands can not only navigate the complexities of the digital landscape but also thrive in it. If you need support in building your first-party data strategy, we’re here to help. We specialise in digital transformation and data, ensuring that your brand is equipped to succeed in building an effective first-party data strategy.