CPG brands are facing an unprecedented amount of pressure as the prevalence of private labels, direct-to-consumer brands, and other challengers encroach on market share. More players in the marketplace not only increases the competition for buyer dollars but also risks diluting brand affinity and awareness.
Most CPG brands have traditionally been retail-oriented. Historically, their focus has centered around what’s on the shelf and how to compete in the store. However, in today’s digital landscape many challenger brands are entering the market with an advantage: part of their intrinsic substance may be to disrupt existing business models, drawing on the shortcomings of established CPG brands and creating a new brand whose foundation is built on delivering on an unmet need in the marketplace.
Additionally, many recent challenger brands have the added advantage of emerging directly into the social media feeds of digital natives, tailoring their communications to resonate closely with Gen Z consumers. Contrast this to established brands that are advertising to consumers who aren’t as comfortable keeping up with changing technologies. Bigger players may have a hard time matching the lightning-fast pace that is often part of a challenger brand’s DNA.
So, what’s a traditional CPG brand to do? The answer is to be open to more innovation – including how they approach product research.
Brands no longer need to pack up and travel to specific markets and sit down with a focus group to learn valuable consumer insights about their products. DIY video research tools enable brands to adopt a “fly on the wall” perspective into participants’ unfiltered responses.
Today’s customer has a higher comfort level with appearing on-screen, especially if they or someone they know is holding the camera. Open-ended video captures up to 7x more information than a text box, providing nuanced responses that capture inflection, tone, and freely associated thoughts.
By utilizing video tools in online insight communities, participants generate a wealth of useful data in their own location on their own terms, dropping the customary stiffness that drains time or subtly influences answers in traditional focus groups or in-person interviews.
Video tools also have the added advantage of enabling CPG brands to penetrate a wider swath of locations to conduct research, stretching research budgets further while simultaneously generating insight from previously overlooked markets.
What were formerly separate silos of data have become more intertwined as brands increasingly see the value of comparing original research findings with overarching consumer insights in the category. Market research companies are using secondary research as both a starting place to develop lines of questioning and a backdrop to contextualize their findings. This integration of primary and secondary research results in insights that not only answer a brand’s current business challenge but can uncover white space a brand or product may be able to fill in the future.
Brands have started to recognize the importance of inviting their customers to drive product development. Brands that crowdsource ideas not only determine exactly what their customers want from their products, but also gain extra credit with consumers for listening to their audiences. Established CPG brands are beginning to work more closely with their research partners to tailor research to move beyond thoughts, feelings and reactions into practical product ideation.
CPG brands already pay close attention to conversations in social media circles from actual customers who are using their products. The complaints and praise surfaced through social media listening guide future communications and product development decisions. But not all brands recognize the value of looking at conversational trends surrounding their product as they relate to the category as a whole. Direct-to-consumer brands do this exceptionally well because these brands were usually born out of a specific cultural perception or marketplace need.
Traditional CPG brands benefit from looking outside their own four walls and evaluating the social conversation around their product in context with greater marketplace trends. Understanding where the two intersect will reveal what’s missing from the market – the white space opportunities that can be filled before a challenger steps in to close the gap.
Prediction markets are increasingly used in CPG market research to identify trends in consumer behavior and determine if a specific concept will be successful with consumers. By swapping question wording from “What would you do?” to “What do you think others will do?” respondents have been able to predict shifts in market trends with surprising accuracy. An additional benefit to this methodology is that respondents are tasked with answering only the questions they feel most confident about, thus reducing the number of blanket guesses that could skew results.
As consumers become more accustomed to (and in many cases, expect) the idea that brands want to hear from them, they become more comfortable clearly articulating their responses. Issuing feedback and being part of product co-creation is no longer a foreign idea – for many consumers, it’s a fun way to pass time. Platforms that have gamified market research recognize that respondents who are engaged in survey participation provide more relevant consumer insights. By blending the two languages of games and surveys, marketers are discovering new ways to keep survey participants interested.
CPG brands will always need to conduct research to ensure their products stay relevant. That said, limiting one’s research to traditionally established methods will ultimately leave a lot of valuable information on the table. Innovative new market research tools and perspectives are opening up opportunities for CPG brands to dig even deeper into how they can fill unmet consumer needs.