What is CPG Loyalty?

March 22, 2023
5 mins read

Let’s Unpack It

CPG stands for Consumer Packaged Goods and includes things you use on a frequent basis, or a few times a week, like detergents, frozen or ready-to-make food, toothpaste, soap, cookies, notebooks, etc. While these items may seem trivial to the average consumer, as of 2021, the global CPG industry is worth approximately $1.2 trillion. This is a significant increase from previous years, highlighting the growth and importance of the industry. 

An interesting fact about CPGs is that despite the COVID-19 pandemic causing significant changes in consumer behavior and supply chain disruptions, the CPG industry experienced a surge in demand. This surge in demand was due to factors such as panic buying, increased consumption of packaged goods due to more time spent at home, and a shift in consumer priorities towards health and wellness products. In fact, according to NielsenIQ, CPG sales increased by 10.3% in 2020, marking the highest growth rate in over a decade. This highlights the resilience of the CPG industry and the importance of adaptability and innovation in responding to changing consumer needs and behaviors.

CPGs, DGs, and FMCGs: The Basics

Okay, for those of you new to CPGs, we’ll do a quick overview. As mentioned above, this is ​​merchandise that customers use up and replace on a frequent basis. Examples of CPGs include food, beverages, household cleaners, toiletries, and cosmetics. 

Fast-Moving Consumer Goods

There are also fast-moving consumer goods (FMCG) which are sometimes put into the same category as CPGs when speaking broadly. You can think of FMCG as a subset of CPG. FMCGs, however, include cheaper products that sell quickly such as milk, gum, fruit and vegetables, soda, beer, and common drugs like aspirin. This group of products sell faster than most and are used almost every day. It also commonly includes those snacks by the checkout counter that inevitably make it into your basket and are lovingly known as “impulse buys” (I’m looking at you, peanut M&Ms)!

Durable Goods

Just to make sure we cover all the basics, it’s worth noting CPG’s counterpart, durable goods. Durable goods receive extended use and are replaced infrequently. These are things like a new car, appliances, furniture, computers, televisions, and jewelry.  There is more consideration, research, and comparison shopping, also known as “try before you buy.” 

Consumer Packaged Goods

Now let’s go back to CPGs. With CPGs typically being low cost to consumers to switch brands, it’s no surprise that the market for CPGs is highly competitive (Coke vs Pepsi, anyone?) Consumers switch from one CPG brand to another based on price, availability, brand and many other factors. So in other words, loyalty is fleeting.

So how do brands win in this chaotic popularity contest? Our advice is that marketers need to stop focusing on loyalty and start thinking about relevance.

This is where CPG marketing comes into play, and more specifically, loyalty programs. 

Leveraging Customer Receipt Data

54% of customers will stop shopping with a brand if it doesn’t provide engaging content or relevant coupons. (Fundera

Point-of-sale data is your key to success. As discussed in our CPG Receipt and FMCG Receipt Data Extraction article, CPG receipts and FMCG receipts can be used to create a picture of a customer’s buying habits, brand preferences and other key information. A product company or an agency supporting them can use these details to customize promotions to engage the customer in further purchases.

All this data must be gathered and compiled in a precise and timely way to be useful. Speed and accuracy are key. For example, with speed and accuracy, a coupon or personalized promotion can be sent to a mobile device or printed on a receipt at the pump in time to impact purchase behavior.

Successful CPG Loyalty Program Examples

The Coca-Cola fanbase is every CPG marketer’s dream. These are the lifetime customers that are loyal to a brand no matter what. Want a taste of the unwavering devotion?  Check out this dedicated page for Coca-Cola’s fandom

Loyalty Means Repeat-Purchase Customers

But how do CPG brands reach this type of status? How do you create an emotional bond between your brand and your consumers? It’s all about personalization – know your customers, their preferences, and their buyer behaviors. This is the key to repeat-purchase customers. This insight is the foundation for every successful CPG loyalty program. 

Customer loyalty for CPG enables organizations to collect point-of-sale data from receipts at scale to fuel value-based digital advertising campaigns that increase customer engagement and drive better results. 

B2B and B2C Loyalty Programs

CPG loyalty unfolds into two broader categories – While a business-to-business (B2B) loyalty program strengthens the connection with the retailers, a Direct-to-consumer (D2C) loyalty program gives brands an opportunity to directly reward consumers.

Some examples of successful direct-to-consumer CPG loyalty programs include:

Pepsico Tasty Rewards is an all-in-one rewards program that includes twice-monthly access to mailed or digital coupons, entries in sweepstakes, and exclusive recipes using the products. It includes Pepsi, Mountain Dew and Pure Leaf beverage brands as well as Frito-Lay snack brands ranging from Lay’s to Quaker and Smartfood. 

Coca-Cola Sip and Scan this rewards app lets customers scan Coke products on Coke.com as well. Rewards can be donated to your child’s school or other Coke-approved charities like Boys and Girls Clubs, the USO, and Special Olympics. Some rewards also give customers a chance to win prizes, like partner gift cards, experiences, and perks. 

Lancome cosmetics brand has a three-tier reward program that includes free shipping at certain price points, a rewards catalog, birthday gift, anniversary gift, and early access to sales and other events. Membership also includes a complimentary Shoprunner membership, which advertises free 2-day shipping on favorite websites. 

So now you know that successful CPG Loyalty programs require point-of-sale data that can be used to create promotions and incentives that drive engagement and more importantly, loyalty. 

Taking CPG Loyalty to the Next Level

Loyalty marketers need to work smarter not harder – use technology and data to make your resources more efficient and your marketing programs more effective. The area most crucial to successful CPG loyalty programs is the receipt and cross-basket sku-level data. Without it, you’re running programs much like shooting arrows in the dark. You’re hoping for a bullseye but you’re just wasting darts without knowing if you’re getting closer to your target.

If you want to get receipt data in real-time, check out Veryfi’s CPG solutions for brand marketing. If you want to see how our technology works, you can learn more about our real-time data extraction from receipts here. Ready to see how Veryfi can help grow your CPG loyalty program? Schedule a complimentary demo with someone from our Veryfi team.