Why CPG Brands Need to Invest in Data Privacy: Q&A With Mark Livingston of Infosys Consulting

“It is estimated that investment on data privacy is likely to increase by 57%. Consumer-Packed Goods (CPG) companies can choose their privacy protection options with consumer interaction services. They must provide customers to opt out and choose to say, ‘Do Not Sell My Personal Information’.”

As the managing partner and global head at Infosys Consulting, Mark Livingston, guides the firm’s overall strategy and direction, and leads a global network of 3,000 consultants. Acting as both visionary and a hands-on leader, Livingston discusses why data privacy is importantOpens a new window for CPG companies and what CPG brands need to know about connecting with their audiences while respecting the data privacy limitsOpens a new window . He shares the new ways retail and CPG brands can use to understand consumer behavior online with the revised California Consumer Privacy Act (CCPA).

In this edition of MarTalk Buzz, Livingston recommends steps that CPG brands can follow to reexamine their annual advertising strategy and protect consumers from behaviors like unlawful discrimination. He also talks about some of the exciting new ways for CPGs and retailers to deliver value to online customers, and drive ecommerce sales in the post-pandemic economy.

Key takeaways on why data privacy is important for CPG brands:

• Develop privacy policies as if they were a marketing tool rather than only a legal disclosure.
• Monitor closely when third party advertising companies are executing their programs.
• Expand risk management around data privacy and security to guard against not just external malicious breaches, but also inadvertent internal breaches and third-party partner breachesOpens a new window .

 

Here’s the edited transcript from our exclusive interview with Mark Livingston of Infosys Consulting:

1. With the revised California Consumer Privacy ActOpens a new window , consumers now have the right to opt out of precise geolocation targeting and the sale of their data through browsers. What CPG companies need to know about connecting with their audiences while respecting their privacy limits?

CPG companies need to invest on data privacy and ensure more rigor than they have today in protecting the consumer data. CPG companies can choose their privacy protection options with consumer interaction services. Companies must provide customers to opt out and choose to say, “Do Not Sell My Personal Information”.

It comes naturally for us, as we emphasize on protecting personally identifiable information (PII) of our employees and clients. It is estimated that investment on data privacy is likely to increase by 57% and for that the solutions need to address the following:

• Consumer disclosure must take place at the point where personal information is collected at all the time.

• Consumers are kept aware of: What categories of information are being collected? How that information will be used (including whether it will be shared or sold to third parties)?

• Mechanisms that allow consumers to exercise their rights to obtain and delete their information, as well as to opt out of the resale of their information.

• CCPA mandate is as much about privacy as it is about building trust with customers.

• Clear unambiguous and pro-active communication to customers is the need of the hour.

• CPG companies can make it easier for customers to understand their rights by updating their privacy notices with text free of legal jargons. The privacy notices should clearly mention what personal information about their customers is collected by the business.

• For example, Peloton’s new privacy notice clearly outlines the range of information it collects about its customers, from age, gender, mobile carrier to information about their heart rate over the course of a class.

• Companies must provide a facility for consumers to easily be able to inform the business that their information should not be collected or sold (opt-out mandate). Multiple ways should be provided to make their selection, catering to digital savvy customers and otherwise. For example, setting up a link on their websites where consumers can opt-out as well as printing a form to mail-in.

• As there are strict timelines to respond to a customer’s request to opt-out (within 15 business days), companies should establish efficient workflows to fulfill these requests. In addition, controls should be established to ensure business, or their third parties do not sell the customer information once they opt-out. These controls should be reviewed and attested periodically.

• CPG companies could try and follow the Facebook model. Facebook has built tools to allow its customers access and delete the information that the company is storing about them. Such self-service models could increase customer transparency while saving cost on customer service teams.

• Businesses need to ensure the customers who opt-out are offered the same level of service as the one who opt-in. This is a key mandate of the CCPA regulation. This could also be a way to build customer loyalty.

 

2. Many CPG companies rely on data and analytics to crack consumer habits, trends, and information to customize their marketing approach and operations. In addition to new legislation, what are the new ways retail and CPG companies can use to understand consumer behavior online?

By leveraging social data at an aggregate level, CPG firms can still create several new insights that were unthinkable just a few years ago. For example, one CPG firm discovered which geography is experiencing ‘out of stocks’ situation by analyzing the Twitter feeds. In a region, the Twitter feeds were showing positive feedback for new promotion but the region experienced decline in revenue. When they examined data, they realized that low revenue was due to the product being out of stock at retail shelf.

Another interesting example is how Unilever is using Artificial Intelligence (AI). Using an AI platform, anyone within Unilever can mine 70,000 consumer research documents and social media data for answers to specific natural language questions. For example, a brand manager might ask, “What hair-care problems concern middle-aged men in India?” People World computers would intuit what is needed, search the vast repository of information on hair loss, dandruff, and similar topics, and instantly deliver a high-level overview.

Learn More: Data Compliance: 6 Expert Tips on Navigating the U.S. Consumer Privacy LandscapeOpens a new window

3. Google Ads recently announcedOpens a new window that marketers will no longer be able to use personal markers like gender or zip code when targeting consumers in areas such as employment or housing. What steps can CPG companies follow to reexamine their annual advertising strategy and protect consumers from behaviors like unlawful discrimination?

Shopper insights have been using this kind of data for targeted advertising, however now this Federal law prohibits practices on targeting users based on categories such as race, religion, ethnicity, beliefs, sexual orientation or personal hardships, getting demographic data is key to the success of a CPG product campaign. CPG companies should take following steps to protect consumer against unlawful discrimination:

• Very strong high-level executive commitment for data privacy, and usage for unlawful discrimination.

• Develop privacy policies as if they were a marketing tool rather than only a legal disclosure.

• Take on the consumer mindset in setting the vision and strategy for what can be advertised and how they are targeted. Especially when third party advertising companies are executing their programs, it is the accountability of the CPG organization to monitor closely.

• Expand risk management around data privacy and security to guard against not just external malicious breaches, but also inadvertent internal breaches and third-party partner breaches. Consumer product companies should not assume that adequate privacy and security precautions are in place with digital marketing vendors. They should be verifying with third party audits.

Learn More: 7 Ways to Be CCPA Compliant and Improve ROI in 2020Opens a new window

4. TV viewing—a prime CPG branding platform—has been disrupted by a surge in streaming and the lack of live sports. How can marketers reinforce their brand positioning by converting these new buyers to “lasting loyals”? Can you share a detailed roadmap of what it takes to marry data from real-time purchases and TV viewership?

For a long time, CPG and other industries have treated each sales channel and advertisement channels in silos. For example, advertise in TV and assess its effectiveness with incremental sales in the target market. Also, at the initial stages of digital revolution, consumer journeys were assumed to be linear.

Another legacy practice is that brand management focuses on brand image and equity, while sales function focuses on increasing revenue through multiple promotions. Leading firms from industry are breaking away from these dated models.

One of our clients merged the marketing and sales function under a chief customer officer to have a unified brand building and revenue into one function. They also started looking at consumer journeys as iterative with starting at one channel and ending at a totally different channel. Consistent with journeys that stretch across multiple channels, consumer outreach (TV advertisements, digital advertisements, and outbound marketing) is also being done in a holistic way with the understanding that each media complements the others and the right mix will work in harmony to drive revenue and brand equity. In our view this is the new model that firms need to use.

Learn More: 3 Tips to Navigate the Risk of CCPA Data Non-ComplianceOpens a new window

5. What are some of the exciting new ways for CPGs and retailers to expand their retailer network, deliver value to online customers, and drive eCommerce sales in the post-pandemic economy?

CPG players have a range of commercial, operational, and strategic areas to cover, while as I mentioned in the previous question media streaming is the new area, the existing areas also have to be re-imagined due to new legal requirements, evolving edge technologies, empowered consumers with various options, and the VVV (Volumes, Velocity and Variety) effects of the data.

Here are few things that I see will be adopted by CPGs for their retail network expansion:

• Re-imagine and accelerate e-commerce and precision marketing with AI & ML models

• Build business continuity and resilience to the disruptions such as COVID-19 and others

• Revisit channel strategy and customer segmentation

• Revise assortment and pricing

• Scan for small businesses for M&A to expand your network and support SMBs

 

6. How can CPG brands continue to transform the shopping experience to make life easier and help customers, whether in-store or online?

Unified customer experience is key for CPGs, as customers are exposed to multiple mobile devices (Mobile, Tablet etc). This is mostly a CTO play in organizations where they continuously improve and enable the organization with edge technologies. Consumers and employees need to be empowered with technological disruptions and adopt AI and ML techniques to realize maximum value of the transformations.

In the next few years, it is very critical that CPGs and Retailers work hand in hand for the customer centric business process transformation:

• Smart Buying -IOT, Blockchain
• Smart Reordering
• Smart Returning
• Smart Delivery to the doors
• Smart Stores for fast pace customers
• Smart IN and OUT experiences

 

7. What does 2020 have in store for the CPG digital marketing industry?

Historically, CPG firm’s engagement with consumers was via consumer panels and consumer surveys. Recently, it has been via anonymous digital advertisements.

CPG firms now will have to accelerate direct engagement with consumers.

• Several are leveraging Influencer marketing aggressively. Here is a good example. Knorr brand launched its “Love at First Taste” campaign, which was inspired by research showing that most people are attracted to others who like the same flavors they do. So, Knorr found singles with shared tastes, set them up on food-based blind dates, and filmed the results. Then it released the video on social media and engaged with people who had been identified as “food influencers.” In the first three weeks, the video received 100 million views.

• Location based deals and direct to consumer marketing: Mobile devices are more widespread than before, and consumer is looking for consumer products within his reach.

 

• Recently, customers, especially those belonging to younger generations, like Gen ZOpens a new window have again begun to prefer physical stores over online shopping. Customers also seem more interested in products they can evaluate in person before they purchase. The personal is becoming more important in advertising and retail once again, and the result may be a pivot back towards brick-and-mortar stores or more augmented reality experience online.

Because of this trend, retailers like Amazon are leveraging Internet of Things (IoT) technology to create cashier-less and line-less stores, which CPG as an industry will need to respond to likely by investing in market research technology like machine vision and by working with these new retailers to understand how these stores will change retail.

• For example, Amazon expects to eventually track purchase patterns and build profiles of individual customers based on their online and in-store shopping habits. CPG companies may be able to take advantage of these profiles and leverage digital ad space that changes based on the preferences and needs of the shoppers’ inside.

About Mark LivingstonOpens a new window

Mark Livingston joined Infosys in December 2018 to lead its global consulting business. He guides the firm’s overall strategy and direction, leads a global network of 3,000 highly-talented consultants, works hands-on with clients that are some of the biggest and most well-known brands in the world, and drives the organization’s growth agenda and transformation into an innovative digital services leader.

About InfosysOpens a new window

Infosys is a global leader in next-generation digital services and consulting. They enable clients in 46 countries to navigate their digital transformation. With nearly four decades of experience in managing the systems and workings of global enterprises, they expertly steer clients through their digital journey. Their always-on learning agenda drives continuous improvement through building and transferring digital skills, expertise, and ideas from an innovation ecosystem.

About MarTalk Buzz:

MarTalk Buzz is an interview series where marketing leaders and marketing technology companies that are making a difference, connect with us and share their stories. Join us as we talk to them about their product journeys, insights on the categories they serve, what works for them, and some bonus pro-tips.

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