The Importance of Data for Startup CPGs Looking to Innovate

CPG market research is your competitive advantage.

If you try to target everyone, you end up delighting no one. Regardless of what you’re selling—whether it’s a product or a service—you want people to fall in love with your brand and ultimately be an advocate for it.

You can’t get to that point unless you truly understand your target audience: who they are, their critical needs, and their plans for the future. This takes data insights.

Too often companies develop a great idea they’re convinced will be a hit. They bring it to market without first conducting consumer research or defining their audience. Most of the time, it fails, and the company never knows why.

For startup CPGs looking to break through the competition by accelerating innovation, data analytics are the key.  The best thing any new CPG can do is to go out initially—before you even decide what your brand is, what your brand will look like, and what products or services you will offer—and talk to people to find out their challenges in order to uncover ways your product could solve them better than your competition. 

After all, it’s much easier to fill an existing need in a better way than to try to create a new one.

With CPG data insights, you become an expert matchmaker 

Data lets you know your audience. What are the triggers or entry points to your category? What is the catalyst that gets them interested in your product? CPG research not only informs the way you innovate, it also gives you a blueprint for how and when to connect with your ideal consumer.  

For example, say you’ve created a revolutionary diaper. It’s crucial to understand that the trigger point for diaper consumers is not when a baby is born, but rather when the decision to have a baby is first made or right after the realization that a baby is on the way. That’s when consumers start collecting all they’ll need for the baby, including diapers. They ask for recommendations from friends, seek out reviews and ads, and are at this moment, most primed to be receptive to a new diaper brand. 

Insights like this help you understand the motivations of your audience—what delights them, what worries them, and where your brand fits into it all. The right research helps you, in essence, to fall in love with your target audience and drives you to connect with them in a meaningful way. Only then can you create a product that leads them to fall in love with you.

In this way, data is the ultimate matchmaker. 

CPG Research matters more in today’s evolving marketplace

Consumer data is more important today than it was 10, even five years ago. The way consumers shop, and the way stores approach inventory, has significantly changed. It’s a more fragmented reality, where the variety of in-stock brands is both dwindling and widely variable from retailer to retailer.

Intellex CPG research expert Jandie Lane

At the same time, purchase habits are less predictable. Some consumers still stick with brick-and-mortar experiences, while others shop nearly 100% online. Brand preferences and loyalty are also less stable, with some consumers remaining die-hard loyalists and others looking for the best bargain in today’s inflation-prone economy or cutting out purchases altogether. 

All of this is impacted by a consumer’s age, geographic location, cultural affinities, and psychological patterns. It informs whether someone prioritizes a tactile, in-person experience over a home delivery or online option.  

This is also impacted by where and how a consumer is exposed to a brand or product, and this differs widely across generations. Gen Z is on top of the latest TikTok trend. Baby Boomers are more likely to see a Facebook ad or traditional television ad. 

To break through, emerging brands are turning to social media and pop-up stores to generate buzz and stand out from the competition. But unless you’ve done research to ensure your brand and product are what your audience is looking for, and that where you’re advertising is where they will find you, all the Instagram posts and flash sales in the world won’t help you succeed.

Data gives you the roadmap for where and how to show up to your target market.

Tapping into CPG data sources on a startup budget 

Large CPG companies have equally large research budgets. But that doesn’t mean smaller, emerging CPGs can’t also access meaningful research. 

Begin with qualitative analysis

A cost-effective place to start is qualitative data—literally just talking to people. Go into a store that your target audience frequents and strike up a conversation with a shopper. People are usually very willing to share their opinion. 

Another budget-friendly, yet insightful, data source is social media listening. Monitor what’s being shared about similar brands or products—common complaints, favorite features—to get a better idea about what will resonate with your target consumer. You can even post your own social poll to gather quick-hit consumer intelligence. And, for a small fee, you can run a few social ads to see who clicks and which phrases or triggers generated the most interest.

If you have a bit more money, consider holding focus groups or, even better, traveling to meet with people in their homes. Getting a sense of your target audience in a setting where they can more freely share can uncover insights not readily apparent on social media or during routine shopping trips. 

Progress to quantitative data 

Qualitative information on its own is valuable. But to truly get an accurate account of your target audience, layering it with quantitative measurements is invaluable. You could start by simply evaluating census data. For a slightly larger monetary commitment, you can work with one of the many small research houses that are able to secure good, solid data on a lower budget.

It’s the idea of grassroots efforts combined with additional thoughtful investments, like multi-client or published reports, that typically cost less than $10K. There is also the option to purchase general reports that cover a specific industry at a high level. Those reports might not be specific to your brand or your target, but they do allow you to better understand the consumer base as a whole.

3 ways startup CPGs can embed market research into innovation

For startup CPGs focused on accelerating innovation, Intellex expert consultant Jandie Lane shares her three top tips for ensuring a well-rounded research approach.

1. Embrace influencers. These days, influencers can practically do the research for you. Their brand preferences and product endorsements shape consumer sentiment, and the level to which their followers jump on board can tell you a lot about audience preferences and product need. With this in mind, make sure you’re talking to influencers in your industry, in your product category, and even in your geographic region to understand what they like, how they look at products, and what it takes to convert them (and their fan base) from a user to an evangelist.

2. Include consumers in the innovation process. Invite consumers in your target audience to attend a half-day or full-day workshop and put them through exercises where they interact with a product prototype. It doesn’t have to be a working prototype—a bare bones facsimile will do. The idea is to get consumers thinking about and acting out how they would use, and interact with, your product. This is invaluable in uncovering complications you may have overlooked, finding hidden dangers in its design or functionality, or even discovering new and better ways to use or improve the product.

3. Remember you are not the target. You are not your target audience. Your business partners, your friends, and your family are also not your target audience. Please don’t consider these opinions as research. You, and those close to you, likely share similar thoughts and approaches, but that truly does not reflect the way your target audience will feel about your product. Today, each generation values products differently. They also view the purchase process differently.  And, as a rule, consumers are horrible predictors of their own behavior. It’s more valuable to ask a consumer in your target audience if you can shadow them while shopping in a store or online, and ask them questions along the way, then it is to act based on the inclinations of you and your circle. 

Expert market research services can help optimize your CPG strategy 

As a startup CPG, if you’re having issues with finding relevant research or garnering helpful insights, you can turn to an expert consultant for guidance.

Consultants can help you better understand your options when weighing cost parameters against CPG market research needs, allowing you to stretch your budget for maximum impact. A consultant can also help you discern between high-quality research and low-quality research to ensure only the former is relied upon, and can make sure you understand how to interpret the data insights and apply them in the most appropriate way. Even if you’re embarking on your own internal research & analytics project, a market research consultant can help you formulate survey questions and create data measures in a way that doesn’t taint the results or sway responses.

As a CPG with an emerging brand or product, when it comes to innovation you have a harder hill to climb than your larger competitors. They have a basic research foundation established, one that can be used to improve upon and tweak each product. You are starting from scratch. But that doesn’t mean you don’t have an advantage—newer CPG data and fresher eyes can easily win out over stale research. Use the data you gather today to come out on top tomorrow. 

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