- Design industry shaping loyalty programs
- Integrate easily and go live quicker
- Deliver hyper-personalized consumer experiences
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By4 Min Read
September 20, 2021
The Consumer Packaged Goods (CPG) sector growth soared by almost 5 times in 2020!
However, forecasts also suggest that this growth may slow down, owing to small business competitors. Is a comprehensive loyalty program, an answer to the shifting consumer preferences?
Enter CPG loyalty. A clear path for CPG manufacturers to improve repeat sales and build a strong relation with distributing retailers and customers. This is a two-part blog series where we will unveil the length and breadth of CPG loyalty where we uncover some CPG customer loyalty strategies and look at some best practices for CPG loyalty programs. Let’s dive into how loyalty programs have in the past and will transform the CPG sector revenue game.
Little did we know that CPG loyalty programs evolved since 18th century from the simple act of American retailers distributing special copper tokens to regular customers! Let’s take a look at the timeline from the past where retailers promoted repeat sales:
While these loyalty programs hooked customers, CPG brands had no structure behind crafting these programs. CPG marketers then did not have enough customer data to make strategic decisions based on customer preferences. They did not even have access to the point of sale at retail stores. While getting third-party data was an alien term, it did not allow them to build a deeper connection with consumers. But now in today’s digital age, e-commerce, and loyalty programs give CPG brands the opportunity to create this direct connection.
Post Covid and global economic slowdown, the first instinctive reaction of consumers was to stock groceries and other essential products. Owing to the huge demand, the average basket size went up but many consumer goods brands went off the shelf quickly. During this time, consumers stepped aside and opted for (a) alternatives to try other new brands or (b) purchase economical substitutes due to the reduction in household income caused by the pandemic. This posed a huge opportunity in incentivizing buyers not to shift their loyalty towards a specific brand through offers, discounts and other freebies.
The global CPG consumer profile report suggests that more than 40% of the consumers are from Gen Z, who chose products based on their personal values and interests. While in 2010, the common trend was to save money and opt for cheaper labels, principled values and views are a priority for consumers today. Therefore, CPG brands need to brace themselves to encounter such radical changes in customer behavior, attitude and engagement through loyalty programs.
CPG loyalty unfolds into two broader categories – While a business-to-business (B2B) loyalty program strengthens the connect with the retailers, a Direct-to-consumer (D2C) loyalty program would give brands an opportunity to directly reward consumer. At Capillary, loyalty experts ensures a brand’s core objective is considered before designing a CPG loyalty program. Let’s take a look at the two brands that leverage CPG loyalty programs using
The pandemic has stunned the world economies, changing customer behavior and undermining traditional CPG marketing strategies. To push past this struggle to revival and win the competition for customer trust, pivoting to a marketing strategy with a robust loyalty program is the best way forward. In the next part of this blog series, we discuss the different challenges in implementing CPG loyalty and how brands can design their rewards programs agilely, paving the way to tackle any major crisis and achieve long-term success.
September 20, 2021 | 4 Min Read
The Consumer Packaged Goods (CPG) sector growth soared by al
June 2, 2023 | 4 Min Read
The market largely perceives loyalty as a promotional stunt
July 2, 2021 | 4 Min Read
Indeed, it has come a long way. In the world of retail, loya