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CPG brand marketing: Building a brand identity that fosters loyalty

The CPG industry has seen a number of dramatic shifts over the past decade, with the digitization of many aspects of daily life and the rise of high-quality, private label brands.
COVID-19 has ushered in a new era of global-scale disruption, sudden changes in consumer habits, increased business expense, and the potential for catastrophic loss for some.

On the other hand, a number of brands have recognized new opportunities to rise above the competition by taking advantage of online marketplaces and expansions of core offerings, innovating how they do business, and increasing customer touchpoints. Proximity, availability, and safety concerns have spurred trials of new brands, creating opportunities for new habit creation.

Challenging times like this are a good gauge of consumer loyalty. When times get tough, a loyal consumer base can find comfort in CPG brands that truly take care of them. Moving forward, brands will need to listen to the customer in order to earn and maintain loyalty. Understanding what challenges consumers face and tailoring marketing messages around the “new normal” gives brands a chance to increase loyalty in great strides, building deeper and stronger relationships. 

Companies that are able to invest in CPG brand marketing—remaining engaged and personalized, while providing a better shopping experience with multiple layers of value—will weather the storm and emerge even stronger.

Has the COVID-19 Pandemic Affected CPG Brand Choice?

When sweeping lockdowns started across the country in mid-March, enormous changes in consumer behavior were observed that benefited many CPG brands. Whether these shifts were just a flash in the pan or will become more permanent trends has yet to be seen.

Here’s what we’ve learned so far:

Availability trumps loyalty in choice of CPG brand.

Shopkick conducted a survey of 24,400 American consumers from March 16-18 to gain insights into changing consumer behavior at the start of the COVID-19 crisis. Essential CPG items like food, water, toiletries, cleaning supplies, medicine, medical items, and paper supplies were purchased to help people “feel safer.”

Despite fears, 76% of consumers were not turning to online shopping, but rather, were taking additional precautions for in-store shopping such as wearing a mask, using sanitizing wipes on the cart, or switching to credit instead of cash. Availability, then, became a driving factor. Eighty-five percent of shoppers said brand names mattered less than availability. The survey revealed that 69% of consumers would purchase a different brand if their usual brand wasn’t available.

When faced with out-of-stock items, another survey found that consumers may discover new brands that will not only suffice, but may become household favorites for 30 to 45% of newcomers.

Established CPG brands see even stronger pandemic sales. 

In May 2020, an NCSolutions Loyalty survey of 51 million households spanning more than 50 CPG brands found that “consumers gravitated toward the products they know best.” During the home-confined buying phase, CPG sales increased by 34% compared to normal times.

CPG brands that had high levels of brand equity and consumer trust before the pandemic, and who continued to advertise, enjoyed greater loyalty and market share. As consumers searched for comfort and familiarity, nostalgic brands experienced a dramatic upswell in growth “which might extend the life of their brand for 20 years,” according to consultants.

Consumption of goods like Procter & Gamble’s Tide detergent and Charmin toilet tissue increased by 20%. Kraft Mac & Cheese sales were up 27% in April, along with other Kraft Heinz brands like Oscar Mayer, Capri Sun, and Philadelphia Cream Cheese. The company went from a 2.2% drop in the fourth quarter to a 6% market reversal as consumers stocked up their pantries with core staples.

Some shoppers say they’re buying Chef Boyardee “for the first time in 20 years.” Campbell’s soup sales soared 35% and General Mills breakfast cereal purchases increased 29% in late March and 37% in April. Deep in the pandemic, Americans were buying 51% more frozen waffles, pancakes, and French toast from Kellogg’s. 

Generic and store-brand labels surge in certain categories. 

Survata found that consumers were more likely to buy name-brand cereal and snacks (58%), frozen foods (57%), and beverages like soda or coffee (54%). On the other hand, consumers were more likely to give lesser-known names a chance for personal care goods like toothpaste or shampoo (49%), OTC medications (50%), and alcohol (72%).

Consumers are not only re-evaluating brands, but prices, sourcing, and trustworthiness. 

Consumers have grown in selectivity and are taking several factors into consideration before making purchases. According to the Survata study, 39% of shoppers consider price to be a “big influencing factor” on their behavior; 64% cited product availability as a “big influence,” with 72% saying they’re more aware of product availability compared to before the pandemic; 40% of shoppers noted “trust in brand” as the biggest factor driving their purchasing decisions; 20% of shoppers are looking at where the product comes from, whether the region has been highly impacted by COVID-19 or not.

CPG Brand Marketing and Building Loyalty Post-Coronavirus

Historically, successful CPG brands have done the following to remain powerhouses post-crises: 

  • Stay top-of-mind. Stay fresh in the mind of consumers through mobile video, ads, and lookbooks. Use this opportunity to make people laugh when they need it most. For instance, Doritos pitched using their bags as a way to measure six feet of social distancing space. Skittles ran a “pick your quarantine house” ad, while M&Ms provided virtual hugs. Taco Bell has been a prominent advertiser during these uncertain times, with a following that has grown to 1.9 million. 
  • CPG brand marketing Exude comfort. Offering added convenience and protection services can provide a safety net of reassurance during uncertain times. Look for ways to make returns easier. Allow curbside pickup if you haven’t already. Look into mobile pay as a way of moving towards a cashless society. 
  • Think big. During times of home quarantine, there has been unprecedented demand for snack foods. Brands like Triscuit, Oreo, Lay’s, and Ritz have responded by offering a simplified portfolio and bigger pack formats. 
  • Make it simple. More consumers are cooking and eating at home. In 2018, the average household cooked about 4 weekly dinners at home, compared to six post-coronavirus. More than half of those surveyed (57%) are trying to make simple meals with fewer ingredients. For food CPG brands, sharing basic recipes (with corresponding bundle discounts) and aligning with meal kit offerings can provide greater value for consumers. 
  • Prioritize shelf space strategy. Direct store distribution agents who ensure supermarket shelves are adequately stocked and positioned can give brands a huge advantage in the pandemic. You can’t afford to let your items run out midday. 
  • Focus on new markets. Imagine new places to sell your products and new ways to use them as well. For instance, Oreo realized that their demographic in China wasn’t snacking on the cookies so much as they were using the Oreo crumbs in their baking. Once they switched their communication to “cooking with Oreo,” they saw a huge lift in sales. 
  • Encourage impulse buys. Full basket shopping is a hot trend. Shoppers are encouraged to splurge on a few more unplanned items to reach the free shipping threshold. 
  • Get techy. Shopkick research also shows 46% of shoppers are using rewards apps to make their money stretch further when times are tough. Brands could take advantage of this cost-cutting trend by offering marketing campaigns tailored to popular items. Shopkick allows brands to connect with larger audiences than they would be able to otherwise. Through the rewarding mobile shopping app, brands can deliver incentives without relying on discounts and enhance the customer shopping experience. A CPG brand marketing strategy designed around a shopping app can help build awareness and cultivate long-term loyalty. With mobile advertising that reaches shoppers wherever they are, brands make their products both physically and mentally present. 

In this time of uncertainty, recent findings highlight the potential for capturing greater market share, improving brand reputation, and achieving unprecedented loyalty by improving CPG brand marketing efforts.

Looking for new channels to boost brand awareness and foster brand loyalty? Consider adding Shopkick to your CPG brand marketing mix. Read our success stories or contact Shopkick to learn how to become one of our partners and start driving greater loyalty.

Image courtesy of eldar nurkovic

 

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