CPG 3.0 Gives Small Brands Big Opportunities to Grow

The closer entrepreneurs can get to their customer, the more value they can bring. Are you ready to opt in?

We are now entering the “age” of smart CPG or deep CPG or perhaps simply CPG 3.0, and the sooner change-the-world entrepreneurs embrace the convergence of technology and CPG, the more likely their chance of success.

Just to put things in perspective, CPG 1.0 involved the birth of CPG — think “Ad Men” — advertising to the masses to get them to buy products at their local retailer, for example. CPG 2.0 marked the beginning of direct to consumer selling and e-commerce, a very disruptive movement that is still developing but whose presence has long been viewed as an established fact. CPG 3.0 is shaping up to be a movement to empower the consumer who can expect even greater personalization, speed, and convenience in return for giving up a bit of their privacy.

This rather simplifies things but it captures the gist. More important is what this latest phase means to the way brands interact with their consumers as well as brick & mortar retail.

Case in point: While direct to consumer has had a disruptive impact on brick & mortar retailers for years, CPG 3.0 could bring a ton of value to progressive retailers that partner with brands which are able to bring consumer insight that enables the brand and retailer, alike, to move faster and with greater agility — connecting the dots, so to speak, between the store the brand and the consumer in their home.

Traditionally, one of the hardest (and most expensive) things to understand has been actual consumer purchase patterns and usage. This is why such information was usually enjoyed by the big players and big research firms. CPG 3.0 has the potential to upset this lock on data. What data are we talking about? Heading the list would be where consumers buy products (we all know they tend to shift where they buy, which is practically impossible to track), how often they buy them, and why they choose a particular channel over other ones.

One example would be this new technology by Selinko that embeds a chip in your supplement bottle that allows consumers to initiate a refill by simply waving their phones over the bottle. A few days later, the refill arrives in the customer’s mailbox. I know of brands that are creating different ways to use this technology — for example allowing customers to interact with brands through recipes or digital coupons with just a wave — of course, the data this collects is very valuable.

Most of us are familiar with the app called Shazam that lets you identify music through a phone’s microphone. Well, a similar app is coming to a home entertainment center near you as you will soon be able to use your phone to scan a product you see on TV or in a movie and the product will pop up on your phone, ready for you to place your order or “learn more”.

If you are a small brand looking to capture consumer interest data and also to capture funding from investors, you can add value to your company by baking CPG 3.0 into your brand today. This adds value for the consumer by allowing the brand to know the consumer in a deeper way so that they may better serve them. I believe this will also disrupt the CPG market in a big way by continuing to challenge the traditional brick and mortar retail model — especially its reliance on traditional ideas of what margin is proper for which product category.

The possibilities and implications seem endless. For example, if a brand is able to share consumer data, it might be able to get better placement, or preferred promotional activity inside a partner retailer’s stores. If the retailer doesn’t carry all the bottle sizes, shoppers can scan the item number and get the size they want delivered to them.

Retailers will get more breathing room with inventory if I am shopping at my favorite store and discover it’s out of the product I want. All I’ll have to do is scan the item number and a home delivery service like Instacart will deliver it to me, maybe even before I get home. Consumers and brands will be able to track a product throughout its entire lifecycle, from factory to warehouse to store to their door.

Seriously, this is going to go in a million different directions — which bodes well for smaller, more nimble brands.

Everybody — Amazon, brands, natural retail, big box stores et al — will be playing in the same sandbox with the consumer in the middle. Small and fast-growing brands have an amazing opportunity right now to potentially take the lead in this game.

So, my advice to small brands is to get in on CPG 3.0 on the ground floor. After all, your size gives you more flexibility and boldness to be a first adopter. Remember: the closer you are to your consumer, the more revenue your company will have and the more value you will have to investors. CPG 3.0 has the potential to level the playing field for smaller players — but first they’ve got to choose to play.

Let me know how you’re maximizing your change-the-world brand’s value for your customers.

Sincerely,

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All credit to my ghostwriting partner, Dave Moore, who is instrumental in getting my thoughts out in a coherent manner & into these blogs. Thanks Dave!

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