4 Digital Analytics Trends for CPG & FMCG Companies to Watch in 2021

Estimated Reading Time: 17 minutes

Unless you’ve been living in a cave for the last 10 months, you likely understand the tremendous impact that the COVID-19 pandemic has had on the world. While the impact of this is obviously the greatest on the “people” side of things, businesses in most industries were also significantly impacted by this global terror.

Organizations in the Consumer Packaged Goods (CPG) and Fast-Moving Consumer Goods (FMCG) industries were no different, experiencing significant financial and operational impacts from the COVID-19 crisis. In the Spring of 2020, news outlets everywhere were littered with stories about people stocking up on toilet paper, bottled water, and even chicken or beef products – panic buying in anticipation of long-term lockdowns. These buying surges produced short-term revenue spikes for the CPG manufacturers of these products, but with the tradeoff of some global supply shortages for some key consumer staple items.

Once the lockdowns started occurring, the COVID-19 situation directly impacted CPG organizations again. Many individuals became unable or unwilling to venture outside of their homes to do traditional day-to-day tasks like grocery shopping. These people shifted their buying habits and started turning more and more to online eCommerce outlets (such as Amazon) for their shopping. In many cases, this interrupted the sell-through rates and predictable revenue that CPG organizations would normally obtain from their most reliable vendors (grocery stores and convenience stores).

While thankfully we have entered the new year, unfortunately, COVID-19 is still something that we’re having to deal with. As a result, the reduction of foot traffic to physical retail outlets is forcing CPG organizations to re-think strategies that will make their products more accessible to customers who are used to in-store purchases. Inevitably, this shift in strategy is forcing them to re-evaluate the value of their digital assets as key touchpoints for their brands. As a result, they’re having to consider (some for the first time) how to establish holistic digital analytics strategies to help them measure the value and effectiveness of these digital assets on their customer’s purchase journey.

To that end, I believe there are four digital analytics trends that will be paramount for CPG organizations to pay attention to in 2021.

1. The Rise of Direct-to-Consumer (D2C) Technologies

Historically, the vast majority of CPG products have been sold in brick-and-mortar stores. In fact, despite the heavy proliferation of online shopping over the past few decades – recent studies have shown that up to 90% of CPG/FMCG products are still purchased in-person at grocery or convenience stores, rather than online. There are some “non-traditional” CPG staples that have bucked this trend (such as cosmetics or supplements), but many common consumer staples such as food, toilet paper, or laundry detergent still have issues that make it difficult for them to be sold online and shipped directly to the consumer. Massive online retailers like Amazon.com have made this process easier (especially for non-perishables), but many CPG organizations have been slow to transition to any new platform that could potentially harm the long-standing relationships that they have with physical retailers.

All that being said, the COVID-19 pandemic has changed the game for CPG organizations when it comes to eCommerce. As an article by Boston Consulting Group from July states – “By 2022, e-commerce’s share of individual grocery categories is expected to be as much as three times higher than pre-COVID-19 levels and two times higher than forecasts before the pandemic”.  

The fact is, many CPG companies are now getting a first-hand view of the impact of sales and revenue when consumers can’t regularly and reliably venture out to a retail location to pick up their products. As a result, many companies have ramped up their research, development, or investment in two different types of D2C technologies.

The first is standard on-site purchasing platforms – what most people commonly think of when they hear the term “eCommerce”.  These platforms allow consumers to scroll through available products, add items to their cart, and place orders for those products right on the manufacturer’s website. CPG organizations have been slow to adopt these technologies on their own websites over the years, due to the logistical issues that come with trying to fulfill and ship large/heavy products (like laundry detergent) or ultra-perishables (such as raw meat or seafood). However, with the shifting landscape that has been partially brought on by the COVID-19 pandemic – many global CPG companies are now beginning to launch their own eCommerce stores for some of their smaller, higher-margin products.

Not all CPG organizations are ready to make that jump, however. For those companies that aren’t, there’s another type of direct-to-consumer option that is quickly rising in popularity – the “Where to Buy” or “Buy Now” plug-in. These platforms allow an organization to place a “widget” on their website which can provide information in real-time about where a user can purchase a specific product online (through retailers such as Amazon, Wal-Mart, or Target) or even in-store (down to an individual physical location). Once a user interacts with one of these widgets, they can click a link to navigate directly to the retailer website in order to place an order for that specific product to be shipped to them or picked-up in-store.

While these plug-ins have technically been around for many years now – the COVID pandemic has only increased the popularity of their adoption within many CPG organizations. For those organizations making an initial deployment of these technologies (or ramping up usage of the technologies on their websites), there will be significant implications for their digital analytics strategies as well. Both of these platforms have numerous consumer touchpoints that will need to be strategically tracked in order to maximize the insights that organizations can get about their consumer’s online purchasing behaviors and product preferences.

Some of these touchpoints will be very obvious. Metrics like “number of transactions”, “total transaction revenue”, or “quantity of product sold” give organizations the key transactional eCommerce information they need to assess which products are most popular in an online-focused world. However, online D2C platforms offer other (less obvious) opportunities for tracking that can help discerning organizations get even deeper insights into their customer’s online mindset, that would not otherwise be available if the consumer was shopping in-store.  For instance, many “Where to Buy” platforms offer consumers the ability to filter product options by quantity and/or variant. When tracked properly, this data can provide CPG brands with key information about the different product options which online consumers are most excited about, allowing them to create targeted marketing campaigns that are laser-focused on those specific product variants.

It’s important to note that in most cases, these platforms will only have a “basic” out-of-the-box analytics tracking set up when they’re initially implemented, focusing on metrics like “add to carts” and other transactional information. From my experience working with dozens of CPG organizations around the world, however, I can assure you that these D2C platform developers are more than willing to implement additional event tracking for companies as long as their event tracking specifications are clear and straightforward. As a result, I would recommend working with your internal analytics teams/partners to develop a robust tracking strategy for your D2C implementations – detailing the D2C KPIs for your site(s) and the precise user activities that must be tracked for you to get those insights.

2. The Need for “Opt-In” User Identification

Over the past few years, the tracking of granular user behaviors across all industries has been becoming more and more difficult due to local/regional privacy regulations like GDPR. The CPG/FMCG industry has been especially hard hit by this reduction in tracking, however, because many CPG brands have historically not offered compelling reasons for people to “opt-in” to being tracked or giving their information away. As mentioned earlier, traditional D2C eCommerce has been non-existent on most CPG websites, with the majority of consumer goods still being sold in physical retail stores. With a few exceptions, most CPG brands have historically used their websites to only provide information about their products and not as a “digital hub” where users can download coupons or request samples.

As a result of this shift, CPG/FMCG organizations have already been getting more creative about how they can entice users to be tracked or give up their information. Many brands have begun offering “low friction” opt-ins such as brand email newsletters, which require only the user’s email address but give the organization permission to regularly connect with those users directly through their email inbox. Other brands have gotten even more robust – offering members-only portals, loyalty programs, and special offers – which they hope will entice users to sign up for an online account.

The purchasing shift brought about by COVID, however, has now made it more important than ever for CPG organizations to use their digital assets to reach and connect with their customers.  As a result, I look for these brands to continue building-out the functionality of their websites in 2021, in order to move these assets from informational resources to true customer loyalty portals.

As with the eCommerce discussion above, the implementation of additional on-site technologies and functionalities means that there are even more opportunities to track digital analytics data about the usage patterns and activities of website users. To ensure that they’re maximizing the insights they’re able to gain from these new touchpoints, analytics and media stakeholders should work together to develop a holistic tracking strategy for these platforms that gives each team the information they need to make critical decisions about their customer’s online journey.

Additionally, analytics stakeholders should ensure that user activity data from the organization’s website(s) can be integrated with data from other platforms where the organization collects/stores data about their customers. For example, most medium-to-large organizations will also have tools like a Customer Relationship Management (CRM) platform or a Customer Data Platform (CDP) that they’re using to consolidate data about their customers. Ensuring that digital data collected by your analytics platform (such as Google Analytics) can also be integrated together with the data in these platforms is paramount to getting a full 360-degree view of those customers.

Finally, organizations with access to data science teams can take this strategy to the next level, combining holistic customer profiles with online purchase metrics in order to forecast Customer Lifetime Value (CLV), or create powerful scoring models that can be used for the generation of targeted remarketing or lookalike audiences.

3. Personalizing the Online Experience

For years, CPG/FMCG brands have relied on a combination of impactful marketing, attention-grabbing packaging, and prime “shelf space” to attract the attention (and wallets) of their target consumers in grocery and convenience stores. As consumer purchasing power shifts to more and more online – organizations will need to take a more personalized approach to their consumers in order to stay top-of-mind. To help them do that, many organizations are working to personalize their online user touchpoints to continuously engage those users with high-impact messaging that will resonate with them on an individual level.

To achieve this personalization from a digital marketing standpoint, more and more organizations are beginning to adopt enterprise-level tools like Google’s Campaign Manager 360, Display & Video 360, or Search Ads 360 in order to programmatically deploy powerful search and display advertising to different targeted audiences of current and potential customers. When utilized in conjunction with a connected enterprise-level analytics tool (such as Google Analytics 360), these powerful media platforms can create hyper-focused campaigns that can be targeted to audiences of users based on the actual activities that they completed on a brand website. As a result, CPG brands are able to (for instance) showcase specific campaign creatives to users who have shown a primary interest in a product’s organic ingredients but a completely different creative to users who have primarily shown an interest in getting coupons or specific offers for that product.

Personalization isn’t just limited to digital marketing/media, however. Many CPG/FMCG organizations have begun utilizing experimentation tools like Google Optimize 360 to show different versions of their site content to users based on that user’s individual online activity. Looking at the example from earlier, this means that a brand can create a version of their product pages that prominently showcases the healthy, organic makeup of their products (which would be shown to users that have proven to be health-conscious) but create a completely different version of their product pages featuring high-visibility messaging about coupons or special offers for those products (which would be shown to users that are more interested in saving money).

Deploying multiple, personalized versions of their online content will ideally allow these brands to maximize the conversion rates of all their website audiences, by customizing each user’s experience rather than offering them a one-size-fits-all approach. When a tool like Google Optimize 360 is integrated with a connected analytics platform (like Google Analytics 360) the organization will be able to clearly understand the impact that each content style has on conversion rates, allowing them to continuously iterate and optimize that content to maximize lift.

4. Adoption of Google Analytics 4 (GA4)

If you regularly read the content that our team at InfoTrust produces, then you know that Google Analytics 4 (GA4) is the future of Google Analytics. With its powerful new event-based data collection model – GA4 will be a huge step forward for organizations to increase the actionable insights that they can get from their Google Analytics data.

However, for all the benefits that GA4 will provide, there’s no doubt that there will be a significant “change curve” to overcome in order to get GA4 rolled-out. For starters, new GA4 properties will have to be created/configured, since the current-day (Universal Analytics) GA properties are completely different from the new GA4 ones. Additionally, existing GA tracking tags (both basic activities and more advanced event tracking) will need to be modified and/or completely re-deployed in order to track activity in the new GA4 properties. Finally, since GA4 properties use a different data collection model than current day (Universal Analytics) GA properties do, reporting and dashboards within GA4 look much different than the ones that stakeholders have been utilizing for many years.

Make no mistake; these challenges will exist for any organization that is looking to start working with GA4 in the future. As I wrote in our book “Crawl, Walk, Run”, however – CPG and FMCG organizations will, unfortunately, have it harder than most organizations when it comes to their own GA4 adoption.

The reason for this is simple. Most global CPG/FMCG organizations have dozens (if not hundreds) of brands with localized versions across dozens of countries around the world. This means that there are simply more websites that these organizations are tracking data on. In turn, this corresponds to more GA4 properties that need to be set-up and configured, more GA4 tagging that will need to be replicated across their entire website portfolio, and more brand/market/region stakeholders that will need to be educated on the new GA4 reporting and insights features.

Luckily, the existing Universal Analytics properties aren’t going anywhere – so organizations will have a considerable runway to fully migrate their organization over to the new GA4 landscape. With that said, however, InfoTrust recommends beginning to consider the impact of GA4 today, in order to lengthen the change curve and reduce organizational friction as much as possible.

Here are some quick tips that can help as you’re starting to consider these awesome new properties for your organization:

  1. Set up new GA4 properties now for each asset that you already have an existing Universal Analytics property for.
  2. Start exploring the GA4 configuration options to understand how they are similar/different from the ones in Universal Analytics properties.
  3. Begin dual-tagging each asset where you’re already collecting Universal Analytics data today. This will allow you to begin collecting “historical” GA4 data for your websites in these new properties so that you (and other organizational stakeholders) can begin getting comfortable with the new event-based data model.
  4. Begin training organizational analytics stakeholders on the new GA4 properties and the similarities/differences from Universal Analytics properties. This will help these stakeholders understand that while the insights that are coming from these new GA4 properties may look different than the ones they’re used to seeing; they can still provide significant business value for the organization.

While the most immediate impact from the past year is obviously the terrible loss that this awful pandemic has caused, the unique experience that all of us have gone through together will have ripple-effects across all facets of our lives for many years to come. Though these effects won’t just change how often we wash our hands, how close we get to other people in social environments, or whether or not we continue wearing face masks in public. They’ll also change the ways that businesses in most industries interact with us as customers.

CPG & FMCG organizations are no different in this regard. Many of the trends that I noted above are things that were already becoming more important for global CPG brands before 2020. However, the velocity of their adoption became exponentially more accelerated as people began looking for alternatives for their weekly grocery run that didn’t require them to visit a physical store location. Thankfully, most of these trends are ones that will ultimately enhance and improve the end-user experience; offering them greater purchasing options and more personalized experiences that will maximize the value of their purchasing process.

All my best to you and yours in 2021!

Want to learn more about digital analytics?

Reach out to our experienced consulting team today.


Originally Published: January 26, 2021

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November 29, 2023
Originally published on January 26, 2021

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