Using data to find opportunities, not excuses: GfK shows the way
Surging inflation, increased competition, global recession challenges and shifts in consumer behaviour post COVID-19 are putting increasing pressure on businesses across the ANZ region to remain competitive. At the same time, marketers, sales leaders and customer experience professionals are increasingly time-poor, with mounting pressure to understand consumers more deeply and help service them at speed and scale.
Against this backdrop of volatility, there are many challenges and barriers to success. Or to put it another way: there are many “excuses”. However, recent research from GfK, a global leader in data analytics and consumer behaviour insights, reveals the time is now to be more data-driven and adapt to the speed of change ahead.
Dr. Morten Boyer, Managing Director at GfK Australia and New Zealand, says business decision-makers need to move away from old habits and ways of thinking.
“It’s time to re-think business models and align a more innovative, data-driven strategy with the current rapid shifts in consumer values and market dynamics,” he says.
Insights from the GfK Market Intelligence Point of Sales Retail Tracking reveal that despite the macroeconomic trends and the pessimism they generally cause, the consumer durables market in Australia is actually performing very well. There hasn’t been a drop in demand despite those macroeconomic factors. Furthermore, market value is up over 12% which is incredibly strong and the result of inflation, rising costs, and premiumisation.
“The research reveals that the widespread appetite for premium brands and products has continued despite the looming economic downturn. ‘Premium brands’ have grown by 34% in value versus the prior year, compared to a drop in value for ‘Entry’ brands. This is just one example of the many new pockets of opportunity that have emerged for brands and retailers to explore post-pandemic,” Boyer explains.
“To remain relevant and succeed, they’ll need to use data to unpack consumer behaviours and redraw the lines between traditional customer segments because people have changed their attitudes regarding the products they prefer, what they are willing to spend, and where they buy.”
Are you ready to turn insights into action?
Already, an increasing number of marketers are seeking a more data-driven way to build brand resilience. Nearly 80% of marketing leaders say data, analytics, and insights are very important to winning and retaining customers, according to the new report The High-Velocity Data Marketer based on a survey of 300-plus CMOs worldwide conducted by the CMO Council in partnership with GfK.
Practically every marketer says direct access to customer data provides them with a competitive advantage. However, nearly two-thirds of all marketers are only moderately confident (or worse) in their data, analytics, and insights systems. Meanwhile, the top challenge holding marketers back from unlocking the true potential of their data is the ability to connect data silos and boost accessibility (55%). In the APAC region, only 18% of marketers say they can move quickly from data gathering into action.
According to Dr. Boyer, leveraging data in more innovative ways to ensure actionable and connected insights are made available to their wider teams is critical for building brand resilience in 2023.
“In short, they’ll need to innovate across supply, product, price, and brand positioning. It’s time to review the basics because the status quo will not maximise your performance,” he says. “It’s a lesson learned from previous crises. Those brands that continued to innovate during the 2008 recession had gained an average of +13 points indexed market share by the following year, while those companies that pressed pause on their activities lost five points in the same period (with 2008 performance as a baseline).
“Much the same trend is playing out with the pandemic, where brands that invested more in innovation during 2020 saw a nine-point growth in indexed market share in 2021, and those that didn’t saw a ten-point decrease from the 2020 baseline. That’s why now is the time to recalibrate and react to current challenges.”
Weathering the storm with data as your superpower
Dr. Boyer highlights that, despite these challenges, there are plenty of opportunities for brands and retailers to navigate this tough climate, mitigate the challenges, and sustain market share.
“Far from taking a one-size-fits-all approach, business decision-makers also need to utilise data and insights on an ongoing basis to understand how the market uncertainties are impacting different regions and demographics in subtly different ways,” he adds.
“Underpinning all this must also be a strong and relevant brand positioning that reflects changing consumer priorities both now and heading into 2023. Getting this right will put businesses in a far better position to craft nuanced strategies that reflect the experiences and needs of different shoppers in different areas.”
“Ask yourself how your business moves from Data to Decision. Do you have the right trusted data? Are you extracting the maximum insights and value from it? Do you integrate your various data assets and use them collectively, or do they sit in separate silos and teams? During times of change, the companies with strong data strategies will always have the edge.”