All You Need To Know About Data Privacy

Posted on February 24, 2022 by Aditi Aggarwal

It is believed that the universe is made of atoms but given the digital wave orbiting our planet; one can vouch that the universe is made of data.

An integral asset, an uncompromised entity – Data Privacy would now garner more eyeballs than ever. As we dive deeper into the complexities revolved around it, let’s first understand data privacy in its entirety. Simply put, just like you rent lockers in banks to secure your valuables, data privacy allows you to lock your personal data. Data privacy enables you to protect your data by focusing on how to manage, store and share it with third parties thereby aligning with the laws and regulations of different countries and governing bodies.

What Makes Data Protection So Crucial

Needless to say that being part of a social community where sharing data is a common practice, safeguarding data gains utmost importance. While the responsible use of data can be a game-changer in driving brands, businesses, countries even. Its misuse, however, could lead to irreparable consequences and permanent damage to a brand’s goodwill. Data breaching, as is called, can hamper the secured information of an organization, government, and individual; by putting it for the wrong use. We all know that Data is sensitive yet 36 billion records were exposed owing to data breaches in just the first half of 2020. This has enabled many brands and platforms to consume data and ensure data security and privacy remain the utmost priority for the consumer.

Going by the last two years’ facts and figures, when the digital footprint of mankind increased to its maximum, data is spreading far and wide. On an average day, we are exposed to so many adverts, e-mailers, and direct messages that we have lost count of the exact number. Data has become the quintessential commodity in every brand’s strategy. In fact, Capillary’s last webinar on the data-driven approach to customer engagement would have you center on one key question – We all know that data is the answer. But are customers willing to share it? If yes, how much data should ideally be shared? Before we proceed, here are some startling facts from the webinar to keep you hooked:

These statistics definitely echo people’s sentiments. There is no right answer to how much data we should share as that boils down to everyone’s own discretion. In a marketing arena where the customer is the king, their right to understand how their data is being utilized gains precedence. Given the norms, organizations now need to culturally change their pre-defined marketing practices and marketers must ensure transparency as part of their data strategies. But for marketers, there is definitely more to dive into when it comes to how to protect the data that enables strategic business decisions to drive brand revenue growth and overall goodwill. Thus, a marketer’s role in data privacy is more crucial because if they falter, they risk the brand image.

Data Privacy: A Look at the Global Picture

The above timeline illustrates the dire need to guard data – personal or professional with authentic norms. No wonder, it’s important for every individual, brand, organization to be compliant in this aspect. In fact, organizations that stay compliant with data protection have a competitive advantage over other players in the industry. For instance, when Apple Inc. stated that privacy is a human right, their customer advocacy swelled up. With the right set of data protection strategies in place, companies can gain the trust and advocacy of their customers, stakeholders, and clients.

Our Approach: Data Privacy at Capillary

At Capillary, our teams deal with innumerable large data sets for different clients. Data sets that are managed, distilled, and secured to derive high consumer engagement for our brands. For us, data security measures remain intact from day one. Data at rest is encrypted with state-of-the-art 128-256 bit keys. To credibly action our data protection strategy, we have a dedicated team headed by the Chief Information Security Officer (CISO) that consistently looks at the security element of the data. All production infrastructure is architected to sit within isolated Virtual Private Clouds (separate for computing, and storage). We adhere to a neat approach entailed below that allows us to be transparent to our clients.

1. Auditing

Capillary’s Information Security Management Forum (ISMF) performs Internal IS Audits on a periodic basis. Extensive audit logs are maintained for Capillary’s systems to investigate any suspected breaches, etc. assessing security controls, server provisioning, disaster recovery, and business continuity. Besides this, we also conduct consistent Audit Trails of all system actions that are readily available.

2. Client Assessment

At Capillary, we believe in customer transparency when any security vulnerabilities are discovered or reported. We use industry-standard bug bounty programs like SafeHats to engage with security researchers in a collaborative way. We have successfully undergone security assessments conducted by our clients including some of the leading global names across different industries.

3. Platforms

Our platforms are well-secured and follow the below practices to ensure data protection at all levels.

Data Processing & Transfers: All the data transfers between client stores and warehouses and the cloud use secure FTP connections. When data is being transferred it can be in an encrypted format, if required. Larger data sets using raw files/flat files are transferred through a secured Capillary application.
Role-based access control: The access control team provides the required level of access to the data for specific employees and clients. Access is immediately revoked when an employee’s record is terminated in Capillary’s HR system within 30 days.
Reports: All client reports and dashboards are password encrypted and no raw data is sent with these reports. All members and Capillary employees have restricted access to the engagement they belong to. The access grants are reviewed every 90 days, and explicit pre-approval is required, failing which, access to the resource is revoked.

4. People

Two-factor authentication is used at all access points, including access to the development, pre-production, and production environments using dedicated VPN tunnels.

Capillary access and administration of logical security rely on user IDs, passwords, and secure LDAP to authenticate users to services, resources, and devices as well as to authorize the appropriate level of access for the user.
Capillary Security has established a password policy with required configurations and expiration intervals.

Our Certifications: Data Security at Capillary

We are certified by the ISO, PCI, compliant with SOC2, and GDPR compliant. This clearly highlights that with Capillary Technologies’ platform, there will be no security breaches and cyber-attacks as the architecture is strongly held. All this is to ensure clients’ data is guarded every time for their services.

And a case study about our data protection measures…

Capillary prides itself in following the data protection policies for all its clients to protect their consumer data. Our data security measures are widely known. In fact, Trend Micro, the multinational cyber security software company also elaborated on how Capillary Technologies optimizes security and visibility for its cloud platforms. You could read the detailed case study here.

6 Indisputable Factors Influencing A CPG Brand’s D2C Journey

Posted on February 17, 2022 by Keerthana Tiwari

The explosion of data and digitization has curiously made the shopping aisle longer, unlocking several new avenues for CPG brands to innovate with their products and marketing strategies. Most of all, it has opened up gates to a whole new frontier – direct-to-consumer or D2C – an exciting opportunity to sell products directly to consumers and receive access to more customer data.

In our recent webinar on CPG in 2022: Outlook, Trends and Strategies, with guest speakers – Sucharita Kodali (VP, Principal Analyst, Forrester) and Lance Patrick (Global Price and Promotion Analytics Leader, General Mills) along with Justin Richie (Capillary Technologies’ Chief Data Officer), some of CPG’s lesser-known factors that are involved in building D2C strategies are revealed. With D2C becoming an essential route to a brand’s long-term survival, here are 6 features that must be considered while building these digital and data-rich strategies.

1) Align your teams on the D2C ‘mark’

The first step to gear up for D2C strategies is ensuring that the entire CPG brand’s organizational structure is aligned to support them. The various teams need to ally to help bring about this revolution in the brand’s roadmap. This includes building a single view of their data, applying the right technology to set up the D2C channel, and ensuring the brand is meticulously publicizing its digital channel directly to its consumers.

As rightly pointed out by Sucharita, “One of the single biggest assets that is essential to driving D2C success, is promoting that you have a website on your existing packaging. If people don’t know that you’re open for sale, who’s going to come to your website?” Eventually, effective collaboration and scalable technology will enable building agility into its strategy.

2) All sales are not the same!

The typical perspective of a brand is that it doesn’t matter where a sale comes from. On the contrary, once D2C channels are established, it becomes essential to track where sales come from, with D2C becoming more prioritized and profitable. Not only will this channel become a higher margin one, but will help the brand receive direct transactional data that will help understand the biggest brand advocates, their preferences and to test new products with them, leading to a more intimate relationship with customers.

3) Picking the right D2C channel for your brand

Developing a mobile app may be a good approach to drive engagement, but the brand must ensure a holistic approach before venturing into this digital platform. A brand’s presence across varied social platforms is equally important to leverage this medium by pairing the mobile app with captivating promotions across social media channels. On the other hand, it is also critical for the brand to optimize content for the mobile version of their D2C website, as a majority of the online shopping traffic comes from mobile devices.

While conversion is still lower on mobile compared to desktops, a seamless mobile commerce experience that is strong in every touchpoint can push customers to make purchases within a few clicks. This channel is very well suited for social media promotions, pairing them up with ads that take customers directly to a specific product page.

4) Discovering the opportunity in demand

In the last two years, work, school, leisure, and housing have all evolved, permanently altering the needs and purchase behavior of customers. In this scenario, data plays a major role in helping brands understand the demand patterns and act ahead of time.

Lance Patrick highlighted this need to leverage data as he stated, “No industry is going back to 2019. 2022, 2023 and beyond will be the different phases of the new normal.” He further added that understanding customers can help brands work ahead and adjust to those demands faster. Brands can ‘test and learn’ through data analysis even before they can ‘test and measure’. These consumer hypotheses will enable brands to drive the demand side for your benefit.

5) It all comes down to zero (party data)

Zero-party data or the data that is proactively shared by customers is the most valuable information that can be leveraged to attract a brand’s best customers. While respondents of a survey and focus groups have helped brands historically collect similar data, in the present era, customers are willing to share insights and feedback on products and are looking forward to new products from brands. This gives retailers access to a whole new set of data points that they have not pursued before, empowering them to set a clear roadmap for their products and processes.

To collect this high-value data, structural loyalty can be used as a strategic weapon. While signing up for the loyalty program, customers are agreeing to share their preferences and brands can further incentivize them for deeper insights. This enriched data in turn can help provide personalization to the customer journey.

6) AI and machine learning to interpret data

The large influx of all these sources of data may be daunting, but using smart tools powered by AI and machine learning can help interpret the data and take the next best steps accordingly. “The 2 things that clearly stood out in AI and ML are Segmentation and Personalization,” said Justin Richie, describing that intelligent tools can guide the CPG brand by:

Introducing in-depth personalization for product recommendations beyond personalizing offers and promotions
Analyzing customer segments and where they stand in the customer lifecycle. This will help the brand deploy various marketing tactics, right from seamlessly onboarding customers, engaging with new customers by introducing them to the brand’s products, and so on.

Tune in to our full webinar to learn directly from the experts on how to construct powerful D2C strategies.

Welcoming D2R (Direct-to-Retailer) – A Major CPG Disruptor

Posted on February 10, 2022 by Anupama Basu

While the D2R (direct-to-retailer) model was a formidable force even prior to COVID-19, it surreptitiously became a superpower for the consumer packaged goods (CPG) industry during lockdowns. With the surge in demand for essentials, the CPG supply chain underwent rapid transformation underscoring the importance of hyperlocal convenience store pick-ups to ease ecommerce fulfillment challenges. Thus, strengthening the long-term ties between CPG manufacturers and retailers through loyalty channels has never been more crucial. But what does this post-pandemic D2R model entail, and how does it benefit leading CPG brands? Let’s decode this further.

To understand D2R, we first need to look at the traditional supply chain model. Traditionally, in the case of CPG brands, the products are first sent by the manufacturer to the wholesaler and the distributor before reaching the retailer and, then, finally the consumer. These multiple middlemen who intervene in the distribution process, hinder brands from interacting directly with their two key sales drivers – local retailers and end-consumers.

Direct-to-Retailer (D2R): The new-age pathway in CPG

This painstaking networking and distribution process has been revolutionized by digitization to create a value-driven model in CPG, leading to the new-age D2R (direct-to-retailer) and D2C (direct-to-consumer) pathways. While D2C has been adopted at a wide scale through online commerce, retailers and their hyperlocal convenience stores too play a crucial role in mitigating fulfillment obstacles. There was a lot of demand sensing an immediate action required from retailers during lockdowns, as in the case of the CPG industry – it didn’t make sense to sell all fast-moving goods online. The retailers’ role became especially indispensable. This is primarily for two reasons.

Firstly, all low-cost basic necessities continue to be relevant at stores where they can be picked up easily – with effective product mixing and differentiation – and without a minimum order payment or delivery cost.
Secondly, retailers can also act as pick-up points for online deliveries that could not have been facilitated otherwise such as the buy-online-pick-up-in-store (BOPIS) option. This means a faster go-to-market retail strategy for leading players at higher profits.

D2R is essentially the pathway that allows for a direct licensing contract between brand owners and retailers – eliminating middlemen who squeeze margins.

Once a D2R agreement is effective, the retailer becomes the seller of the licensed merchandise. Products often also get manufactured and then sold directly by the retailer, who becomes responsible for their in-store marketing, while paying a royalty to the brand owner. Businesses and retailers are, thus, coming together to foster healthy growth for both parties. While businesses benefit from the increased margin, private-label push reduced product development/delivery time, retailers ultimately reap increased profits by building their own enterprises in collaboration. This is precisely where the role of building loyalty programs to reward retailers for their own growth as well as the licensor’s penetration becomes crucial. But, first, let’s look at the D2R model more closely within the purview of CPG brands.

D2R model and its multiple advantages for CPG brands

Direct-to-retailer deals allow for long-term associations that prevent CPG products from going out of stores with the highest footfall. In the wake of massive supply chain disruptions, while enterprises are struggling to meet their D2C fulfillment goals, established CPG businesses innovated heavily through existing D2R relationships.

Tracking changing consumer preferences through retailers’ massive POS data repositories has led CPG brands to benefit greatly. They can install a variety of new software within the retailers’ payment tracking modules to further incentivize purchases while gathering relevant insights on customer preferences.
Licensing to retailers directly also drove other lucrative benefits for Unilever, Nestle, and Mondelez, who gathered customer intelligence from local stores to launch relevant new product lines for post-COVID high-growth categories – health and home care.

These CPG giants wanted to offer new products or improve the formulation of existing ones during the pandemic. But, without retailers, gathering customer intelligence for product innovation is tricky for fast-moving brands since they are primary storehouses for varied data points. For CPGs, the growing need for new and advanced health and wellness-related products after the pandemic meant collaborating with retailers to gather effective customer expertise that determined their course. Establishing the right relationships with the right retailers proved crucial to get access to retailers’ inside intelligence as well as have proactive conceptual discussions for the new launches.

If a direct-to-retail property is underperforming, retailers will generally try changing the product in some way (the design or material, for example) before taking it off the shelf. If it is forced to remove it then the chances are it will look for other properties from existing partners. Once a retailer partnership is formed, it generates incremental value for long periods and is self-sustaining with the right set of rewards in place.

Successful D2R Strategies Need Partner Reward Programs

The enduring benefits of D2R are clear in the CPG industry, and so the reliance on retailers will remain despite D2C growth. To ensure the long-term relationships between CPG brands and the convenience stores, there needs to be sufficient incentivization through digital communication channels. Most licensors believe that retailers may not be committed to them beyond the initial push-off phase where they are merely establishing new product lines. This fear can be eliminated effectively and seamlessly through D2R loyalty programs that not only reward retailers but establish consistent relationship-building between the owners and licensees.

A loyalty channel activation can not only enable rewards for retailers but also provide CPGs with the relevant customer insights needed. Brands can then anticipate, quantify and predict future purchase trends.

A singular retailer communication and rewards portal, that shares updates on the CPG owner’s performance, new launches, and other relevant moves, facilitate trust building to encourage further collaboration. It also becomes the loyalty channel that provides the brand owner with the relevant customer insights it needs from retailers. Brands can then anticipate, quantify and predict future purchase trends. PepsiCo did this to effectively engage with 40,000 convenience stores at once while incorporating a customizable loyalty program into its proprietary retailer platform. Such programs include gamified retailer surveys, partner rewards, perks, tokens, and much more. To learn more about efficient ways of launching D2R rewards for your CPG brands, get in touch with our experts at Capillary Technologies.

Crypto Rewards: The Next Frontier of Loyalty Programs

Posted on February 4, 2022 by Anupama Basu

In the age of the metaverse, while crypto is the new currency, the blockchain technology that governs it is witnessing rapid and wide-scale adoption across services. Its enduring potential arises from its maximum-transparency promise for varied types of transactions. Blockchain is, thus, probably here to stay as a permanent solution to myriad cyber security breaches – growing tenfold during the pandemic alongside e-commerce. And while these developments are closely interlinked with immersive social experiences (vis-a-vis Web 3.0), together, they alter customer interactions forever. Brands that wish to retain their most loyal buyers will, then, not only make crypto wallets scalable but also incorporate crypto rewards: the next frontier of loyalty programs. Some leading ones are already doing so, but let’s get to that later.

Understanding How Crypto Rewards Work

Crypto rewards in loyalty programs are nothing but crypto cash-backs. They are part of loyalty programs that promise to deliver rewards in cryptocurrencies instead of real currency. In contrast to traditional loyalty programs, customers can now avail their benefits across multiple services and goods at once. This is essential because crypto loyalty rewards are designed around the same overarching principle of decentralization that governs cryptocurrencies. They integrate very easily with existing loyalty programs across multiple stakeholders like brands, sellers, managers, and system administrators through smart contracts that bring them all as partners on a secular blockchain-rewards network. Instead of spending millions on running multiple kinds of loyalty programs, brands that choose to partner and onboard themselves for crypto rewards will benefit from cost-saving as well as the unprecedented scale of crypto cash-backs. And what’s more, is that a self-executing code is all it takes to activate these rewards through social media or digital wallets.

The larger efficacy of blockchain does not warrant a complete overhaul of existing loyalty programs, but a seamless integration of crypto rewards within them.

What is needed is a mindset shift in this new age approach to loyalty programs altogether.

Breaking Down Crypto Rewards Further

Meet Roman. Roman just signed up to buy tickets for a concert in the O2 Arena in London through his credit card. He gets crypto loyalty tokens transferred from both his credit card company as well as the entertainment booking site that offered the concert tickets.

Now, Roman checks into a major hotel in London and uses his accumulated credit card tokens to upgrade to a better suite. He has a fantastic experience and leaves a great review for the hotel, and uses his entertainment tokens to hire a limousine for the concert.

At the concert, he meets Sheila with whom he trades some of his entertainment tokens for new hotel points which he uses to extend his stay in London. With this exchange of loyalty tokens, all parties involved benefit while the varied services gain more loyalty for future trading to continue.

These earned crypto tokens no longer reside on separate applications of diverse programs offered by the credit card, hotel, or entertainment company, but instead are equitably gathered at one place due to blockchain.

Understanding a Blockchain-Based Rewards Ecosystem

Regulated transactions are set to become a thing of the past with the secure premise offered by blockchain applications. So far, while Bitcoin is its most widely trusted cryptocurrency, there are several others like Ethereum that have gained unimaginable impetus through NFTs (non-fungible tokens). But while blockchain’s best use is to maintain the records of digital transactions between sellers and buyers in the most secure manner, it actually serves a more special purpose from a rewards point of view. Without middlemen involved, all brands who subscribe to the crypto rewards ecosystem benefit almost equally from high customer loyalty, while the customers enjoy reaping benefits as per their changing needs. This transforms the customer experience altogether by offering crypto-cashback across multiple vendors at once. They will all profit equally from eliminating costs that go into running different sets of loyalty programs across categories. By granting customers full access to multiple reward programs through a singular wallet, crypto rewards will emerge as the most sought means to maintain loyalty in the near future.

Through simple digital signatures on reward applications of digital wallets – multiple brands can sign up for this ecosystem.

Popular Brands Adapting to Crypto Rewards

A lot of leading brands have globally already adapted to crypto reward programs. And most of their customers are first-time crypto users, who are learning to adapt to the model themselves. The loyalty ecosystem is being transformed by this new dimension, even with market volatility. These are exciting times from trading and speculation perspectives, and here are a few cases of companies that have successfully adapted to crypto rewards:

1. Singapore Airlines first launched KrisPay – an extension of their KrisFlyer program. A digital miles wallet was designed to allow customers to easily convert KrisFlyer air miles into KrisPay miles to spend on purchases at partner outlets through point-of-sale transactions. Members could convert their earned KrisPay loyalty tokens easily across partners.

Next, they launched its personalized and interest-based rewards extension through the app Kris+. It claims to have over 150 partners that are spread across 650 retail outlets today. Its UI enabled reward offers to be customized as per the most recent interests of its customers, thereby making their experience more fulfilling across partners.
In the airlines’ industry, these trends have caught up with leading competitors like Emirates which launched its Emirates Skywards Reward program as well as Russian Airlines S7 recorded tokens worth over a million by July 2020 through its own blockchain-driven crypto rewards.

2. Chanticleer Holdings is an investor in several small burger chains across America. They announced a major blockchain architecture partnership that enabled a loyalty program that allows a special cryptocurrency token called Mobivity Merit to be earned at any burger shop within the ecosystem which was then exchangeable across multiple partner brands. They encouraged higher sales for secure crypto value and more loyalty.

3. American Express launched a blockchain program with online wholesale retailer Boxed. They enabled a private system for Boxed to transfer customer information which merchants on Boxed can utilize to fulfill crypto rewards. Essentially, when a consumer makes a purchase on Boxed, the blockchain stores the data about the transaction without disclosing the card holder’s personal information. The details of the transaction trigger the creation of a smart contract which then awards points in a backend loyalty system.

The world of branded crypto rewards is only getting bigger with a host of SaaS companies adapting newer ways to enrich them. It is only a matter of time before they become the most incentivized means for the growth of loyalty programs at large.