Making Big Data Real:How CPG Manufacturerscan Turn the Promise of Big Datainto a Powerful Competitive Advantage

By

Kirk W. WheelerExecutive Vice President/GM, Global CPG Practice, Manthan

It’s the CEO shot heard ‘round the enterprise. No doubt you have heard a similar question from a senior executive. He or she reads an article or attends a conference on big data and then grills the team on the company’s big data strategy (or lack thereof).

So, what exactly are YOU doing in big data?If your company is like many in the CPG industry (and this is equally true for other business sectors worldwide), it’s prob-ably struggling right now to figure out what to do with the historic phenom-enon known as big data. There’s no question that big data is the business trend du jour – or even “du century.” Big data is ubiquitous and inescapable (which partly explains why your CEO is all of a sudden obsessed with it). The amount of ink, pixels and code expended on the big data question boggles the mind, and there is no end in sight. We’re not even close to approaching “peak big data” yet, which is both a little scary and exciting, too.

But, even as this megatrend seizes the business world’s fascination (and increasingly its resources), one has to ask if we are even asking the right ques-tion about big data.

I would argue that instead of focusing on “what” your company is doing in big data, the more important question is to ask “why?” Indeed the first critical ques-tion in business almost always revolves around “why” we need to do something, and “why” it matters to our customers, other key stakeholders and the broader marketplace.

When you start to delve into the “why” of a major undertaking like big data, you quickly realize that clearly understanding your goals is absolutely essential, followed closely by having a coherent business strategy.

In other words, when it comes to some-thing as big, complicated and potentially consequential as big data, “ready, fire, aim” just won’t cut it.

What arewe doing in

Big Data?

2Making Big Data Real: How CPG Manufacturers Can Turn thePromise of Big Data into a Powerful Competitive Advantage

To get real value out of big data – and that means turning it into a powerful competi-tive advantage and growth engine for your company – you need to start with a care-fully formulated big data strategy. That seems so self evident, but I am constantly surprised at how many companies lack a well thought out strategy before embark-ing on major business and technology initiatives like big data. Of course, an effective strategy starts with clearly defined goals (the “why” that I mentioned earlier). For today’s CPG industry, I believe “growth” is at the top of the list of goals for a major new big data effort. As you know better than me, in recent years CPG manufacturers have been severely chal-lenged on the growth front.

There are many reasons for this – lagging economic recovery, changing shopper tastes and behaviors, a lack of product innovation – but the reality is that growth is probably the #1 goal for CPG companies around the world. If you don’t grow, you eventually die.

So if identifying incremental growth opportunities is a major goal for your company and brands, then your big data strategy should be built around that objective. Big data is, in fact, a major enabler for analyzing mountains of data to create actionable insights that help activate the shopper. And that leads to growth.

The point here is that big data is about driving value for your company. And that should translate into growth. What big data is not about is technology. Yet, the discussions around big data too often begin at the IT level. The reality is that big data initiatives should start with a clear business strategy grounded on how to strategically use data. The essence of big data is about how massive new data sets (e.g., unstructured social media data) can be analyzed and harnessed in real-time to make better business decisions, faster. Again, the real goal here is to grow the business and win in the marketplace. Having a well defined big data strategy will help CPG manufacturers (and their retail partners) get there.

It Takes aStrategy toDrive Real

Growth

3Making Big Data Real: How CPG Manufacturers Can Turn thePromise of Big Data into a Powerful Competitive Advantage

It might surprise you how few CPG manu-facturers have effectively leveraged big data. In fact, a leading technology analyst firm recently found that less than 10% of the consumer goods companies they surveyed had leveraged big data at all. Partly because of how loosely it has been defined, there is a lot of confusion about what big data actually is and how you can actually use it. More than anything, today’s big data opportunity is being driven by two major trends:

The explosive growth of new types of data, especially “unstructured data” (e.g., social media data)

The velocity of data – and business overall

The rapid emergence of new kinds of data is both a serious challenge and a massive opportunity for CPG companies. This is especially true of so-called “unstructured” data, which are very different from the old POS, internal and distributor datasets that CPG companies relied upon for so long. The data “exhaust” that now emanates from social media alone is probably the biggest reason for having a clearly defined big data strategy. Why, because your shoppers are now hooked on social media and the insights that can be mined from their tweets, posts, likes and shares are invaluable for your business. The essence of big data is effectively harness-ing all kinds of data (like social) and quickly deriving insights that enable CPG

companies to innovate, engage and win in today’s fiercely competitive consumer goods marketplace.

Just as important as the rise of new kinds of data, is the velocity with which that information and resulting insights must be used to have any real value for CPG companies and their brands. Previ-ously, there was a predictable cadence of how and when to use the old struc-tured datasets.

Today, the new data streams are moving markets in real-time as consumers com-ment on your brands (good and bad), compare (and cherry-pick) prices and offers, and share all with their friends and the world. This high velocity business environment requires a new definition for data and a new strategy for leveraging it. Big data was made for that.

Defining your big data strategy is not about “boiling the ocean.” It is about clearly understanding what your busi-ness requirements are for using data (structured and unstructured), and then developing a single “point of truth” about today’s demanding and tech-savvy shopper. Having such a deep and even real-time understanding of the shopper’s behaviors and preferences is the prereq-uisite to activating her buying journey. Ultimately, that drives incremental revenue growth and increases profits.

‘DefiningYour

Big DataStrategy

4Making Big Data Real: How CPG Manufacturers Can Turn thePromise of Big Data into a Powerful Competitive Advantage

As you work your way through the process of defining your goals and strat-egy for big data, it’s important to do so in the context of your real business needs and opportunities. As I noted earlier, you don’t need to “boil the ocean” in defining your big data strategy. In defining your strategy keep in mind that one size does not fit all in big data. The problem is that a lot of CPG companies don’t know where to start in defining their big data strategy, or they end up starting in the wrong place.

Figuring out a big data strategy that will actually drive real results for your com-pany requires a real reckoning of your true needs and resources. What you don’t want to do is let consultants or analysts define your big data strategy for you. No one knows your company’s needs better than you do. You also want to avoid getting sucked into the prevailing big data “spin vortex,” whose main purpose is to get you to buy solutions that you may not actually need or that are not right for your company. All of that said, here are some key ques-tions that CPG manufacturers can ask when framing up a big data strategy:

How do we define big data in the context of our particular CPG busi-ness?

What are the problems we are trying to solve, and opportunities we seek to capitalize on?

As you develop your company’s big data strategy, it’s also important to undertake an honest assessment of the willingness of your organization to change and take action based on the big data driven insights that will be produced. Just one real world example: You might discover that your brand is getting hammered on Facebook, which could translate into serious sales issues in certain markets. The question then becomes, will you be willing to do what is required to act upon this big data-driven intelligence? (Sticking your corporate “head in the sand” is no longer a viable strategy in today’s social media influenced world.)

Succeeding in this rapidly shifting land-scape is not about having big data tell you what you want to hear. It is about being willing to be open and candid about what the data tells you and then acting upon those insights in ways that protect and nurture your brand and move the business forward.

What are some potential big data “use cases” that really matter to our com-pany and will drive the business forward?

What is our roadmap for implementing a big data strategy?

What kind of internal and external resources and budget can we lever-age in driving a successful big data program?

What are the particular success met-rics for our big data initiative?

Framing Upa Big Data

Strategy That Fits Your

ActualBusiness

5Making Big Data Real: How CPG Manufacturers Can Turn thePromise of Big Data into a Powerful Competitive Advantage

To paraphrase one of the most famous lines in modern cinema (Jack Nicholson from “A Few Good Men”): If “you can’t handle the truth,” then you are going to find it especially difficult to make your big data strategy a winner.

The great news is that big data is not just for global players like P&G, Unilever and Nestle. We’ve seen how big data is help-ing to level the playing field for smaller and mid-market CPG manufacturers.

For the first time in history, any CPG orga-nization can leverage mobile and social platforms powered by big data-driven analytics to listen directly to the voice of the shopper (including tech savvy Millen-nial consumers) and strengthen brand loyalty among their target segments. Big data is a powerful, accessible tool that any sized CPG organization can use right now to win the battle for brand prefer-ence, growth and loyalty.

Millennial Shoppers Survey:Predictive Analytics, Data Integration and RetailerCollaboration Are Key Issues for CPG Companies

Recently, Manthan joined with Consumer Goods Technology Magazine to co-sponsor a national survey on how CPG manufacturers are approaching the Millen-nial Generation (typically defined as 18-34 year olds). The survey looked at how CPG companies of all sizes and types are leveraging data and analytics technol-ogy to better engage and serve the 90-million-strong Millennial cohort. The follow-ing are key findings from CGT Magazine’s survey report:

6Making Big Data Real: How CPG Manufacturers Can Turn thePromise of Big Data into a Powerful Competitive Advantage

Three-quarters of survey respondents feel they understand Millennials reasonably well (61 percent) or very well (14 percent), but the majority admit they still have work to do. Ironi-cally, 100% of the companies in the “very well” category are small to mid-sized businesses (SMB), which sounds similar to the dawn of social media when smaller more agile com-panies moved into the space quicker.

There is consensus at 64 percent, however, that it takes more than just delivering on the brand promise, and that issues, like sustainability and social causes, are equally important. Success for some is tied to social media initiatives, where 44 percent feel they lack strong engagement in social channels favored by Millennials. Yet, surprisingly, 42 percent feel they lack the right product or value propo-sition for Millennial shoppers.

Analytics and the ability to mine data for insights about these shoppers has become a major focus, as 64 percent of respondents are starting to mine their knowledge base for predictive analytics and proactive planning.

Still, many are running into challenges collaborating with retailers around data or integrating the various sources of data. Retailer collaboration is a potential stumbling block, as 69 percent of those trying to partner with retailers for Millennial shopper data analytics report that they have limited access and that it is hard to take action.

The biggest discrepancy in the results regarding company size involves analytics capabilities. Integration of data is a struggle for companies with less than $1 billion in annual revenue. Sixty-nine percent of them have POS and limited social data but none of it is integrated, compared to the 67 percent of Tier-1 companies that are working on integration.

Not surprisingly, more than half the companies that cite a need for bigger budgets or more resources to help raise the level of shopper analytics have less than $500 million in revenue.

Click here for the full Millennial Shoppers Survey report from Manthan and CGT Magazine.

7Making Big Data Real: How CPG Manufacturers Can Turn thePromise of Big Data into a Powerful Competitive Advantage

After framing a “why” strategy tailor made for your company’s requirements, resources and cultural constraints (because culture matters in terms of effecting data-driven change), it’s time to consider “how” big data can and should work to drive real results for your com-pany. Big data is by its nature “big,” com-plicated and hard to implement. Today, there is a myriad of technology solutions that are promoted as the “silver bullet” for helping CPG organizations (and other companies) to maximize the big data opportunity. The truth is, there is no tech-nology “silver bullet” for big data. (Again, before you even begin an IT discussion, you need to first develop your big data business strategy and possible use cases.)

What is possible right now is for CPG manufacturers to adopt an analytics-driven solution called Demand Signal Management (DSM), which helps turn big data theories into business-building initia-tives that produce growing results.

What exactly is DSM? It is a cloud-based, fully integrated analytics system that creates a single “point of truth” driving real-time actionable insights across a wide range of business functions. DSM accomplishes this by synthesizing multiple, disparate data sources – includ-ing information from retail customers and distributors, market research, internal data, social media and, crucially, shopper data. DSM gives CPG marketers,

Building a BigData ‘Platform’

That DrivesReal Impact,

Right Now

category managers and supply chain executives a whole new level of clarity on demand signals and brand perception, while also helping to optimize inventory and eliminate waste.

A world-class DSM solution focuses on shopper insights and activation, providing CPG front-line executives with true demand analysis of the numerous datas-ets that are now a fact of life in the digital age. Importantly, the best DSM solutions offer speed to value and ROI, and are easy to use. In today’s high velocity, “do or die” global consumer goods market, CPG companies need to start benefitting from an analytics-driven solution like DSM within weeks, not months or even years. And, the solution must be easy to use for even average business users and acces-sible from any web connected device. If your big data solution takes forever to implement and requires data scientist “white coats” to operate it, then it won’t be much use.

Cloud-based DSM solutions like I’ve described above are both enablers and accelerators of big data strategies. DSM empowers you to start capitalizing on big data quickly, it is remarkably easy to use and fast to implement, and scales to whatever level your company needs. Ultimately, DSM is a “platform” that CPG companies can use right now in imple-menting a big data solution that generates material results (e.g., strong growth).

8Making Big Data Real: How CPG Manufacturers Can Turn thePromise of Big Data into a Powerful Competitive Advantage

The leading technology analyst firm Gartner developed the Hype Cycle, which illustrates how new technologies emerge and gain adoption and widespread application – or not. At this point, big data is probably in Phase 2 of the Hype Cycle, which is outlined below:

No. Phase Description

TechnologyTrigger

A potential technology breakthrough kicks things off. Early proof-of-concept stories and media interest trigger significant publicity. Often no usable products exist and commercial viability is unproven.

1.

Peak of InflatedExpectations

Early publicity produces a number of success stories-often accompanied by scores of failures. Some compa-nies take action; many do not.

2.

Trough of Disillusionment

Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopt-ers.

3.

Slope of Enlightenment

More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious.

4.

Plateau ofProductivity

Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology’s broad market applicability and relevance are clearly paying off.

5.

(Source: Wikipedia)

The Big DataInflection Point:

Seizing YourCompetitive

Advantage

9Making Big Data Real: How CPG Manufacturers Can Turn thePromise of Big Data into a Powerful Competitive Advantage

Certainly there have been some success stories in big data so far. More realistically, there are probably many more instances where companies rushed to adopt some aspect of big data but had nothing substantial to show for their efforts and investment. I don’t think it’s hard to see how big data overall is now headed for Phase 3, where a lot of disillusionment sets in amongst companies (CPG manu-facturers among them) that have not yet seen much value in big data.

That might sound like big data is doomed, but I believe an exact opposite narrative will eventually emerge. Indeed, if done right (which means thoughtfully and strate-gically), your big data experience can jump several phases of the Gartner cycle to where the technology is strategically founded and make a bottom-line impact on business results. And, given the avail-ability of a proven big data operating platform like DSM, and other enabling technologies such as advanced predictive analytics and Hadoop (the open-source software framework that is critical to big data), the time is definitely right for CPG companies to develop and implement a big data strategy.

All of these new technologies have made big data more affordable, accessible and practical for CPG manufacturers, which have helped to bring us to a big data inflection point. The result is an immediate opportunity for CPG organizations to drive a competitive point of difference around how they use and deploy new forms of data, and the velocity with which they do so. Yes, these are exciting times for our industry.

Make no mistake, however, that this big data inflection point won’t last forever. The sooner you develop and launch a strategy that makes big data real across your organization, you can begin driving a clear competitive advantage that will help vault your company to new levels of growth, leadership and profitability.

The question now is: What are you waiting for?

10Making Big Data Real: How CPG Manufacturers Can Turn thePromise of Big Data into a Powerful Competitive Advantage

About the AuthorKirk W. Wheeler manages Manthan’s CPG related business on a global basis. He is responsible for leading the sales, marketing, business development and customer success activities to build and expand Manthan’s global CPG presence. A veteran CPG industry executive with extensive experience in global brands, sales & marketing and big data management, Kirk’s job is to orches-trate Manthan’s global technology, services and human resources to create solutions that help CPG manufacturers grow and win. Prior to joining Manthan, Kirk held senior management posi-tions at global consumer products and technology companies, including the Coca-Cola Com-pany, P&G, Cabela’s and, most recently, IRI.

Manthan serves as the Chief Analytics Officer for global consumer industries. Manthan’s comprehensive portfolio of analytics products and services enable CPG manufacturers and their retail partners to understand and activate the shopper’s journey. Architected with deep industry expertise, Manthan’s solutions combine advanced predictive analyt-ics, actionable insights and unmatched shopper knowledge to help customers identify and drive incremental growth opportunities. Manthan has provided its business-building analytics solutions to over 170 retail and CPG organizations across 21 countries. Visit www.manthan.com

Making Big Data Real: How CPG Manufacturers Can Turn thePromise of Big Data into a Powerful Competitive Advantage