How to Drive Sales and Consumer Engagement With Spatial Analytics

There’s been an ongoing trend over the last two-plus years: digital natives and companies embracing tech are largely gaining ground, able to keep up with the volatile nature of changing consumer habits. The latest resource to help CGs gain the competitive edge? Spatial analytics. Consumer goods companies are using data to drive informed and profitable market expansions and improved consumer engagement, both leading to an overall increase in sales. Implementing a strategy, however, requires a methodological approach; one that takes into account how to consolidate and centralize data, how to determine use cases, and how to implement capabilities that result in a more agile business. Learn how CG companies like Coca-Cola have implemented a robust data strategy to transform location data analysis and optimize enterprise-wide efforts. In CGT’s latest webinar, uncover how leading brands like Coca-Cola have transformed their business through spatial analytics and machine learning. Discover why advanced location data analysis has become a go-to resource for CPGs seeking more accurate consumer insights, why this is a key industry trend to watch in 2022 and beyond, and, ultimately, what this could mean for retail partners. Lisa Johnston: Hello, welcome to “How to Tap in Today's Key Source of Advanced Consumer Insights.” My name is Lisa Johnston, I'm the senior editor at CGT, and I'm excited to welcome you here today. Today's CPG brands are confronted with a constantly changing landscape thanks to a number of things, including evolving consumer habits and new digital players who are skilled with direct-to-consumer strategies. For consumer goods companies to not only be successful, but also grow and thrive, they need to enhance spatial understanding of consumers and learn how to use these insights to drive market expansion decisions that have an impact on the business. What do we mean by spatial understanding and how can it be a benefit? Those are some of the things we're going to get into today with Jose Luis Palacios, managing director of CPG for Google Cloud, and Jamie Woolley, director of product marketing at CARTO. They’ll share some of the changes occurring across the CPG landscape. As part of this, we'll also explore how some of the most innovative companies are using location data analysis to optimize sales for their brands, including companies such as Coca-Cola and Philip Morris. First, Jose is going to break down some of the key challenges facing the industry today, then Jamie will dig deeper into spatial data. Lastly, we'll all come together for the Q&A. Without further ado, I'd like to welcome Jose. Jose brings a valuable background to this event, leading the go-to-market strategy for the Americas at Google. He works with the solutions teams and business partners to help industry leaders solve critical business problems for the use of AI, machine learning, and data analysis. Before joining Google, Jose served almost 30 years in different leadership roles in the CPG industry around the world, including regional president of North America at P&G, global VP of commercial excellence in the consumer division at Coty, and also VP and general manager of Mexico and Latin America at Coty. Jose, it's great to have you. Let's talk about the state of the CPG industry. What are some of the key challenges you see the sector facing? Something tells me you might mention a little word known as “inflation.” Jose Luis Palacios: Thank you, Lisa. It's a pleasure to be here today, thank you for having me. Inflation is just one of those. This is a fundamental question. If I can summarize the answer in just one word, that word is volatility. Volatility means rapid and unpredicted change that happens, but what is unique about the current times is that volatility is happening all over the value chain of the industry. From the consumers changing preferences — how they engage with brands and value the brands, to the go-to-market. We have learned what is happening with omnichannel, with e-commerce, the new digital and native brands, and the way CPG companies are making products available for consumers. Then to operations, look at raw materials — you've mentioned inflation, meaning the cost of not only acquiring, but producing and delivering these goods that the industry is designed for — from major changes in supply chain, stability in supply chain, and the way we plan demand forecasting. This is a major change in the industry. We used to plan for two or three years, but now the demand may change dramatically in a month given different consequences and circumstances in the market, the cost of materials, labor force, and cost in general. Here, the word digital transformation plays a fundamental role. Digital transformation is about creating those capabilities to become agile. Johnston: Jose, you have a deep CPG background. Given this perspective, we talked about the challenges, but what are some of the key trends and developments in the industry today that are on your radar? What's interesting to you right now? Palacios: The changes are happening across the value chain, but the most important one is the consumer. The consumer is at the center of everything in CPG, so major shifts in consumer trends are compelling CPG firms to rethink significant aspects of the entire business. Consumer preferences are shifting. Some pre-COVID trends, particularly in the beauty industry, such as cruelty-free, sustainable products have accelerated dramatically — good for me, good for the planet. It's becoming more important in the food sector as well where we’ve seen significant increases in search terms like vegan, gluten-free, good for me, and good for others. Consumers are passing from the what to the how. Now, it's not only about learning what is vegan, but looking for vegan recipes — passing from the theory to the execution. Consumers are engaging more with brands. They’re looking for brands that share their vision of the world. A recent study found that 20% of European consumers say they are willing to spend more money on sustainable food. Meanwhile, 96% of Americans see that locally produced food is more nutritious. Food is no longer just fuel, it is becoming a tool for proactive self-care. This dramatically changes the way brands interact with consumers. In this sense, product availability — and we are facing this all across our markets — is still the number one reason why consumers are switching brands. CPGs have to find out new ways of planning, having demand forecasting, and improving supply chains to guarantee that product is available, whatever the consumer wants to buy. The new times require that demand forecasting needs to be very agile, and this is where capabilities like AI and ML play a fundamental role. As I mentioned at the beginning, a plan that was done six months ago, may be completely obsolete today. Finally, operations — realistically, everything that is related to supply chain. The major disruptions we are seeing today will last for a while. Having the capabilities of predicting fluctuations in the demand process and acting accordingly is becoming more and more fundamental. As you can imagine, data and the ability to generate insights out of this data is becoming more important. Data is one of the most precious assets that companies have today. Johnston: It's interesting that consumers are demanding products beyond the shelves. It really comes down to loyalty, finding good until something better comes along. Consumers need to get the items that are available on shelves. Where do you see the need for CPG companies to adapt? You've addressed this a bit already – they need access to more data and better insights, but can you dig into that a bit more? Palacios: That's a great question. The secret to winning volatility is agility. It’s like preparing for a marathon; you need some physical preparation. Having this agility for a company means you need to make interventions across the value chain. Agility goes from being able to learn about what consumers want today, as well to being capable to predict what they will want in the future. This enables you to serve those consumers properly and ensure that operations deliver not only the consumer expectations, but also continue delivering shareholder value – that's why we are in the companies. Digital transformation is a fundamental tool to create these capabilities, and this is where Google partners with the industry. One fundamental pillar – which is one of the key assets of the industry and will continue to have an important role in the P&L of the companies – is data. Data without the capability to generate insights is basically useless. Both things need to be in place, the data and the capability, to generate insights. This is precisely where Google is an expert. Basically, Google brings the best of all of it with nine solutions, more than one billion users, and very unique AI and ML tools that are capable of generating insights using the most diverse and complex data sets across the planet. Today, we're working with key industry leaders on multiple projects, from predicting what the flavors will be preferred by consumers in the future, identifying the latest beauty, personal, or food trends to have the best offering to better serve the consumers, providing learning tools, videos, data intelligence, commerce, supply chain and demand planning tools between multiple orders. Integrating all these capabilities across the value chain of the CPG industry will be a very unique, competitive advantage for the companies that are embracing this digital transformation. Johnston: I have to ask, you spent so many years in the CPG industry. Why did you decide to move to Google? Palacios: I've been asked many times. I've been very fortunate to have a very diverse career in the CPG industry. I had the privilege of leading local, regional, and global teams across eight countries – in Asia, Latin America, the U.S., Canada – I learned so much during this journey and met wonderful people, both in my organization, the market, my customers, and multiple leaders in the industry. There are two things that the most successful leaders all over the world have. One is that they lead with a purpose, and the second one is that they develop their organizations at their businesses to win not only today, but to win tomorrow. When I joined Google, it was in the middle of the pandemic, precisely when all these fast-changing circumstances were happening and affecting the industry. We were all working in the industry to prepare businesses to deal with the current reality, but also to be able to win in the future under the new reality. On the other hand, I have always admired Google. The company's purpose of organizing the word information and making it accessible and useful is fantastic. Once I read the letter created by the founders – which I recommend everybody learn, it's called “The Owner’s Manual” from 2004 when the company went public – they established the purpose and values of the company. I had a very special admiration for the company. So, when I was invited to help my former industry in the digital transformation journey, connecting the industry needs and my experience with those unique capabilities that only Google can offer — honestly it was a very easy decision to make. I'm delighted to be here working with my colleagues, and with Google. Johnston: When you were in the CPG industry, if you'd had better access to spatial data and analytics, how do you think it would've helped you accelerate growth? Palacios: I'm a fundamental believer in how important data is. We were talking about how consumers are changing, but understanding where these consumers buy, how they buy, what they want, how they move, and aligning these needs and preferences to our strategy is fundamental for not only winning today, but winning tomorrow. We know that all the CPG’s trade and marketing are expanding, they are fundamental portions of any CPG P&L. Thinking about a diverse country like the U.S., a consumer in Oklahoma does not necessarily have the same needs, preferences, and consumption patterns as a consumer in New York – the same happens with LA, Miami, Cincinnati, Chicago, etc. As I mentioned before, data is a fundamental asset. Having this knowledge about how consumers behave and special analytics around the consumers, where they buy and how they do it, is a fundamental competitive advantage that any company wants. It's not only about efficiency, but having a special interaction with this consumer will significantly improve not only the satisfaction, but also the return of the investment…basically your options to win. Johnston: Thank you so much for setting the stage so nicely. Now, I'd like to invite Jamie Woolley, director of product marketing at CARTO. We're going to talk more about spatial data and analytics, as well as why CPGs might want to leverage them. Jamie leads global product marketing initiatives for CARTO's cloud-native location intelligence platform, and industry-specific geospatial solutions. He's a seasoned B2B marketer with international experience in the tech data and analytics field. Before CARTO, he led sales and marketing at both Amadeus IT Group and Experian. Jamie, could you tell us a bit about CARTO before we begin? Jamie Woolley: CARTO is a location intelligence platform founded in 2012. We bring together spatial data, analytics and visualization capabilities, and developer tools to allow customers to unlock the power of spatial data to make better decisions. Johnston: Before we jump in, I think it would be helpful for the audience to talk about spatial analytics and give some background. I don't want to assume that everyone is as up-to-speed as others might be. What are spatial analytics and how are they used? Woolley: Spatial analytics is a development from the more traditional GIS world. It’s the discipline of analyzing any data with a spatial or location-based component – that could be analyzing first-party customer data, but it also involves enriching customer data with third-party datasets in order to build a bigger picture of the situation, then applying analytical techniques to predict behaviors in order to drive business decision-making, and optimize resources. Johnston: How are they different from other, perhaps, more common types of data being used right now? Woolley: Spatial analytics always has a challenge because its nature involves a location. The complexity is sometimes being able to treat, process, and analyze that data in an effective way. What we've seen with the developments in cloud analytics is that processing and visualization is much more rapid. Cloud data platforms, such as Google and BigQuery, are able to process these massive datasets and visualize them almost seamlessly enabling users to glean insights and make decisions much more rapidly. However, the data science techniques are very similar. What we've seen is that GIS was traditionally a closed discipline with very technical user groups focused on GIS. However, in the past few years with the explosion of spatial data, this has gotten a much broader appeal – traditional data scientists are bringing a spatial component into their analytical workload data. Johnston: Could you talk a bit about what types of companies are using spatial data and analytics? Woolley: We work across all verticals. Most organization verticals have a need to understand a location in some way. The most common use cases are in retail, CPG, and telecommunications. In retail it helps to understand the customer base and optimize decisions around where to open and repurpose or consolidate stores. From a CPG perspective, the main use case is understanding customers better with improved customer segmentation, and then using that insight to drive route-to-market or market expansion strategies. Telco's use it for network expansion, in terms of where to place that new 5G antenna, and even the public sector with sustainability initiatives, geo-marketing, and so forth. There's a universal requirement to understand, analyze, and base decisions on spatial data. Johnston: Specific to CPG, since our audience is consumer goods technology IT executives, what are the benefits of spatial data analytics for CPGs? Woolley: For CPGs, the main use case is this ability to have a better hold on the customer makeup – the ability to segment customers more effectively and build a bigger, broader picture of who the customer is. Traditionally, CPGs have not had that end relationship with the final consumer, but with spatial data and third-party sources, we can enhance any data that the CPG company has in order to build that bigger picture – this helps CPG organizations in many ways. Firstly, to understand customers and develop products, product launch strategies, marketing campaigns, and better align to customer segments, but also to identify market expansion opportunities. There are organizations that have a very deep understanding of product mix, brands in their portfolio, the customers that consume them, and they use spatial data and analytics to look for optimization or expansion in their distributed network based on spatial insights. Johnston: Now, you’ve worked with companies such as Coca-Cola. Can you share why they enlisted your help and their pain points? Woolley: Coca-Cola initially needed help with a single pain point, which was to try and gather more data to enhance their view of customers. Our relationship with Coca-Cola was purely on a data sale basis, but as we started to work more closely with them, we helped to add a visualization and analytics layer on top of that data so that the centralized data science team was able to glean insights from customers and point-of-sale networks to drive better decisions. In the example of Japan, we helped them to understand the location and performance of their vending machine. As I'm sure you're aware, in Japan there's a huge demand for vending machines. Coca-Cola used CARTO to understand the performance of those vending machines, the locations where they're positioned, and try to optimize that inventory of vending machines. Going back to Jose's comment about agility, there's an interesting use case during COVID. As you can appreciate, in the major cities in Japan during COVID there were quite strict lockdown measures, which affected just about the whole of the population. Coca-Cola was able to react to those lockdown measures, realizing that a lot of vending machines were located in transport hubs – Metro stations, train stations – and obviously there wasn't human footfall or traffic to buy products from the vending machines. They used CARTO and our additional data assets to identify other areas within the city where they could relocate those vending machines, mainly in residential areas, in order to regain some of that lost business due to the lockdown measures. Johnston: What are some best practices you could share with consumer goods companies that need more visibility in collecting and leveraging consumer data? Woolley: The starting point needs to be a commitment to collect consumer data. Traditionally, that relationship with the customers in many cases being with the distributor or the retailer. The starting point to start collecting consumer information, then building the teams and analytical capabilities, the technology to analyze that data to drive better decisions is a great starting point. Usually, there's a need to enhance data as well as third-party sources. We’ve brought together a catalog of 11,000 spatial datasets. Any CPG customer that uses our platform can enrich their own data with a multitude of different information sources, such as demographics, human mobility, and weather. There's a lot of information for most companies in most countries in the world. Then, best practices building a bigger picture of the customer base and using that customer understanding to drive market expansion strategies. Normally, in terms of best practice, we recommend that companies start with a single use case. Focusing on a very specific business problem or business need. Then, because spatial analytics is usually map-based, visual, and interactive, it gains interest within the organization. We see lots of different stakeholders across the business start to see applications of spatial analytics and data for their own business area and it grows from there. One interesting use case is Philip Morris – a slightly different use case in a CPG context – which was based around their initiative to reduce the contamination from cigarette butts. They launched this initiative called “Our World is Not an Ashtray” using CARTO to analyze black spots around the world with high incidents of littering due to cigarette butts. They leverage these insights in order to direct resources to those particular areas to make improvements at the local level, including improved signage, installing ashtrays, and sending actual teams to go and clean up these areas. They've formed a partnership with a mobile application where consumers can take photographs of areas that are contaminated with cigarette waste and upload that to the platform. It’s then displayed in CARTO and Philip Morris can use those insights to optimize how they approach those black spots around the globe. Johnston: Those are great examples of innovative use cases. Do you have any other examples of companies that are being truly innovative in the use of data and analytics to prepare for consumers? Woolley: We've seen some massive changes in consumer behavior – mainly driven by the pandemic – that resulted in almost a reliance on home delivery and instant gratification for certain products and brands. We've been working with a lot of different companies in the quick commerce space, such as Deliveroo in the U.K. ASDA, for example, which is a large grocer in the U.K., has created a new business area – branded pickup lockers. Using CARTO they are able to identify where to deploy these lockers to be proximate to the customer base in order to be used as often as possible. They're even selling that service to third-party brands as well. Gap is another example in the U.S. Gap uses our site selection application to analyze their store network. In the recent months, they've used algorithms to identify where to close, repurpose, or even open new stores across the network. That's purely based on the insights from their own customer information enriched with third-party data sources and analytical models that we apply in that tool. There's lots of different use cases and best practices, but the innovative cases that we're seeing are the ones that are responding rapidly and in an agile manner, to those very quick-changing consumer demands, which is all about speed, proximity, and mobile-first. Johnston: If a CPG who is not on Google Cloud, or using Google Cloud services, what can they do outside of that world with spatial analytics? Woolley: The strategy of CARTO is always to be cloud native on any platform. Our platform is fully cloud native across the main cloud analytics platforms, not just Google BigQuery, but other big players as well – Amazon Redshift, Databricks, Snowflake, etc. We built this platform from scratch to be able to be deployed across any cloud infrastructure. Those options are always there if Google Cloud is not the preferred platform. Johnston: Consumer goods companies talk a lot about putting the consumer at the center of everything. The truth is, many companies face major obstacles in collecting consumer data. Why is this so difficult for so many companies? Woolley: Traditionally, the relationship with the consumer was handled mainly by the retailer or distributor in many cases. The pandemic has accelerated this, so we're all used to using these last-minute, quick delivery services that deliver CPG brands. This generates lots of location-based insights that CPG brands can use to better deliver, better market, or better develop products. Palacios: I agree. There are particularly good cases of companies where the challenge in CPG is that there are less opportunities of direct interaction with the consumer versus retail. CPGs tend to be more data poor on consumer data versus the retailers and other players. We are working with big companies in ensuring that once there is a data strategy, the ways to generate that interaction with the consumer are defined, providing the value to the consumer and then collecting that data. Sometimes there is more data in the CPGs versus what the leaders think, but usually that data is in silos. One of the key approaches is about how we understand where all this data is. Sometimes the brands have data, there are CRM efforts in some places, or there is external data. So how can we work on ensuring that we bring all these silos together and create this database? There are multiple ways of doing that and the companies that are creating these capabilities are going to have a tremendous competitive advantage in the future. Woolley: Bringing together all of the data in one place, if that happens in the cloud, that has so many benefits further down the line – it’s all managed centrally. Tools like CARTO connect natively, so there's no need to move data around. You are always analyzing a single source of truth. That's definitely something to be encouraged. Palacios: Absolutely. The question earlier about not being in Google Cloud, or being in another cloud, etc. – one of the keys to Google's approach is being multi-cloud, being able to collect the data from multiple areas, multiple clouds, multiple systems. Breaking down these silos because the companies have evolved through the time with different systems, different approaches, etc. Our focus is to bring that value together so the insights that you can generate add value. That is where CARTO, for example, and the data that can be collected and interacted with CARTO, is absolutely wonderful. Johnston: Even beyond those, some of these tech challenges stem from a culture shift for many consumer goods companies. Is that true in your experience? Woolley: There's definitely change happening. There's a clear shift in culture with regard to forming that direct-to-consumer relationship and starting to collect data. For example, I'm based in Madrid. One of the main avenues in Madrid is Gran Via. As I was walking down Gran Via, I saw a pop-up store. That pop-up store is an empty retail unit that every week changes brand. Last week it was a soy-based food brand, this week it's Chupa Chups lollipops. What they do is offer free samples in exchange for consumer data, which is an interesting development because the brands are starting to build that direct relationship with the consumer – they're gathering data. They're in a place in Madrid, on this particular avenue, because it's known that the target audience they're trying to reach is transiting through that avenue. Change is happening and I expect that to accelerate as we move through the coming months and years. Palacios: Absolutely, this is a great point. One of the challenges we face is the mentality change – many industry leaders think that you can only collect and have this interaction with the consumer via commerce. Commerce is important, but direct-to-consumer commerce is not necessarily valid for all the CPG industries. We have some beauty brands with high value products where a significant portion of the business is direct-to-consumer, but there are other industries where there isn’t necessarily this interaction. However, there are multiple ways of providing value to consumers and generating interaction with them. Think about recipes, now that we are talking about food. There are multiple ways of generating interaction and ensuring you collect the data these consumers provide you with as you provide value. Then, you generate insights that will help consumers receive better services and values from the industry. Woolley: It's not only the customer or consumer view that we need to take into consideration, it's the customer as well. When I refer to a customer, I mean the distributor or the retailer. Being able to combine the two and identify the ideal customer profile for this brand or category of products. When you can take that insight to identify – from a location basis – where the distributors or retailers are, and who I should be targeting to ensure that I'm reaching that catchment area of products that fit my ideal customer profile. It covers both aspects: the end consumer and the distribution trade chain. Johnston: That's a great thought to leave us with, Jamie. Thank you Jamie and Jose. I'd like to thank our speakers for giving us their time and subject matter expertise. I'd also like to thank CARTO for sponsoring today's webinar. Have a great rest of your day.

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