Driving FMCG Success: The Impact of Scaling First-Party Data

Known for its rapid production, distribution, and consumer demand, the fast-moving consumer goods (FMCG) industry is in the midst of a transformative period, largely propelled by the emergence of digital direct-to-consumer (DTC) channels.  

These channels have fundamentally altered the way FMCG brands connect with their customers, granting them access to a wealth of valuable first-party data.  

In this context, an essential question emerges: How can FMCG brands leverage first-party data gathered through DTC channels to their advantage?  

This article explores the pivotal role of scaling first-party data from DTC channels in driving FMCG success, discussing its benefits and providing insights to address this question. 

Harnessing first-party data in DTC channels 

In a DTC context, first-party data refers to the information collected directly from consumers through interaction with a company’s ecommerce website, mobile app, or any other digital touchpoint that makes up a customer journey.  

It includes data such as purchase history, consumer preferences, browsing behavior, and demographic details. This data is a goldmine for FMCG brands, offering insights into consumer habits and trends that have previously been hard to obtain when operating primarily in the realm of physical retail.

Benefits of leveraging first-party data for FMCG brands 

From improved supply chain management to cost efficiency, the benefits of first-party data empower FMCG brands to stand out in a consumer-oriented landscape:

Control over data 

In the FMCG industry, purchasing second or third-party data diminishes control, potentially compromising data quality and relevance to your brand and customers. In contrast, cultivating your first-party data grants precise control over information accuracy.  

Leveraging this high-quality first-party data through a Customer Data Platform (CDP) centralizes customer data, enabling FMCG brands to make data-driven decisions and provide tailored consumer experiences across all channels. 

Personalized product recommendations 

By analyzing consumers' past interactions and preferences, FMCG brands can deliver targeted content and offers, resulting in a more engaging and relevant customer experience. An example of this would be Myvitamins, a health and wellness company that offers a select range of supplements to a segmented audience over 50 years old.   

This personalization enhances the likelihood of conversion and repeat purchases. 

Cost efficiency 

Gathering first-party data eliminates the need for intermediaries, which means you won't have to procure or purchase it from external sources. Unlike second and third-party data, first-party data is the most cost-effective choice, as it is directly sourced from your consumers. 

While collecting first-party data may demand more time and effort for collecting and processing, the investment is typically worthwhile.
  
What’s more, unlike third-party data offering less precise segmentation, first-party data provides individual engagement and granular insights.

Fostered innovation 

Reduced dependence on third-party intermediaries has paved the way for remarkable innovation within the FMCG sector. No longer constrained by the limitations imposed by external partners, FMCG brands now have the autonomy to experiment with creative approaches and new business models, including DTC channels and subscription services.  

With direct access to their customers, FMCG brands can gather immediate feedback, fine-tune their product offerings, and adjust marketing strategies in real time.  

Besides, “DTC gives FMCG businesses a platform where they can test NPD on a smaller scale with relatively low risk”, states Tom Slade, Global Head of D2C Ecommerce at Mondelez. It thus becomes a powerful tool for assessing the potential success of innovation before it’s scaled up across multiple channels.  

Improved supply chain management 

Accurate first-party data can help FMCG brands optimize their supply chains. By understanding demand patterns and preferences, brands can reduce overstocking, minimize waste, and improve logistics efficiency. 

This, in turn, leads to cost efficiencies and greater opportunities to work towards your brand’s sustainability goals, thus aligning with the growing trend of consumer awareness and demand for eco-friendly practices. 

Tools for gathering first-party data

To address these challenges and maximize the benefits of first-party data from DTC channels, you can employ the following tools:

Online vouchers 

Online vouchers are a powerful way to incentivize and gather first-party data from customers. FMCG brands can offer discounts, exclusive deals, or promotional codes in exchange for consumers providing their data.
 
These vouchers can be distributed through various channels, such as email marketing, social media, or on your brand's website. Consumers are more likely to provide their information when they see tangible benefits in the form of cost savings or special offers. 

By tracking the usage of these vouchers, FMCG brands can gain valuable insights into consumer purchasing behavior, preferences, and engagement. 

Smart receipts 

These digital receipts with enhanced features can be sent via email or mobile apps, providing customers with a convenient record of their purchases. For FMCG brands, smart receipts offer an opportunity to collect valuable first-party data.  

Consumers can be prompted to opt-in for these digital receipts by providing their contact information, preferences, and feedback.  

This data can then be used to personalize future marketing efforts, suggest complementary products, and improve the overall customer experience. 

Loyalty programs 

Loyalty programs are structured incentives that encourage customers to repeatedly engage with the brand and provide data willingly. Members of these programs often receive exclusive offers, discounts, or early access to products in exchange for their loyalty. 

For FMCG brands, loyalty schemes allow the collection of first-party data like purchase history, likes, and demographic information. By encouraging customers to sign up for these programs, companies gain insights into individual behaviors and purchasing patterns.  

The obtained data can then be integrated into customer data platforms, allowing FMCG businesses to create tailored marketing campaigns, enhance product offerings, and strengthen customer relationships.   

First-party data's transformative role in FMCG 

In the fast-paced world of FMCG, the strategic use of first-party data is nothing short of a game-changer. With innovative tools like smart receipts, FMCG brands are able to engage consumers, personalize their offerings, and make data-driven decisions that lead to boosted revenue.    

In making this process more efficient, partnering with Ingenuity can enable your FMCG brand to optimize your DTC efforts. Ingenuity's 18 years of expertise in leveraging first-party data to enhance customer experiences, streamline operations, and drive growth for ambitious FMCG brands.

Together, we can unlock the full potential of first-party data, leading to a new era of consumer-centric FMCG excellence. Discover our digital solutions to build a thriving FMCG business that’s easy to scale.