As we enter almost a full year of a remote culture, many consumers have turned to filling their shopping carts online with products that they once would simply run down the street for. In addition to shopping online for groceries, consumers are also buying more products based on specific lifestyle and dietary needs, such as organic, vegan or low carb. With the frequency of online shopping and ever-evolving consumer needs, it’s more important than ever for retailers to ensure their products have the right descriptions and associated content for consumers to easily find what they’re looking for if brands want to maintain market share and loyalty in the new year.
To help make sense of these new opportunities, I connected with Todd Morris, CEO of Label Insight, the CPG industry’s leading product attribute metadata solution which helps CPG brands and retailers grow by understanding and addressing the changing needs and product preferences of U.S. consumers through data-driven insights and activation. We discussed product content as consumers are increasingly shopping based on health and wellness needs, why it’s so essential for brands and retailers to improve their online shopping experiences accordingly and key takeaways from Label Insight’s Empty Aisles Report.
Gary Drenik: In Label Insight’s Empty Aisles report, you found that 30 major retailers’ websites failed to surface 92% of qualifying products in their assortment via search filters based on the top 25 product attributes consumers searched for online such as “low sugar” and “keto.” Can you elaborate on what a product attribute is and why they are important?
Todd Morris: When we use the term product attribute, we’re referring to a characteristic of a product tied to a specific consumer need-state. Another way to think about it is as the distinctive qualities that make-up a product’s DNA. Examples include product attributes related to health and wellness need-states, like “low sugar” or “heart healthy”, diet related need-states like “keto”, “paleo” or “Whole 30”, allergy related need-states like “peanut free” or “sesame free” or values related need-states like “cruelty-free”, “clean”, “non-GMO”, or “sustainably grown”. Label Insight has cataloged tens of thousands of product attributes and correlated these attributes with the hundreds of thousands of products that possess them, basically mapping the DNA of almost every product across the entire Consumer Packaged Goods (CPG) ecosystem.
Label Insight’s Empty Aisles report uncovered that the vast majority of products fail to identify and claim the top attributes for which they both qualify and for which consumers are searching. The recent explosion of grocery e-commerce has brought the importance of product attributes more into focus because on a digital shelf, if you do not claim and promote the key attributes for which your product qualifies, you are invisible to consumers. Given there are almost as many U.S. consumers shopping based upon health and wellness need-states (200 million) as there are licensed drivers, we have a large segment of the population that is significantly underserved and billions of dollars being left on the table by retailers and CPG brands.
MORE FOR YOU
Drenik: Given the new reality brought on by the pandemic, consumers have become more cautious toward the products they buy and how they purchase them, so it makes sense they’re relying more on online grocery shopping. In fact, according to a recent Prosper Insights & Analytics consumer survey, over one third of consumers surveyed had engaged in some type of grocery e-commerce activity in the past 30 days including almost 50% of those in the lucrative 25-44 year old segment.
With consumer shopping habits going through some major shifts, the stakes are becoming higher for retailers if they want to keep their customers pleased. While retailers should be more inclined to adjust their e-commerce strategy, Label Insight’s insights revealed it’s not as easy as it looks.
Based on what you’ve seen, what are some of the roadblocks preventing retailers in the grocery, beauty and petcare space from delivering online shopping experiences that meet customer needs? What steps can retailers take to ensure they are enabling customers to find the products that meet their lifestyle and health needs?
Morris: Some of the roadblocks we identified are tied to poor website navigation and search functionality, but the root cause of poor online shopping experiences for consumers shopping based on lifestyle and health needs is incomplete and inaccurate product data flowing into retailer systems. The level of data fidelity and granularity that sufficed in legacy retail models is no longer sufficient as more consumers engage online.
Keto is a great example of the data gap that exists. Keto is the 5th most searched for product attribute by consumers, yet it is currently unclaimed by 98% of the products that qualify as Keto. So, you have 98% of the products that qualify for Keto sitting in a retailer’s product database invisible to the search engines on the retailer’s website that are querying that database based on a consumer’s search for “Keto”. We see this issue across the board with 84% of food products failing to claim at least one of their three most-searched attributes.
Leading retailers have recognized this issue and are working with both national and their own private label brands to close these product attribute data gaps. This comprehensive and granular product metadata is like jet fuel for retail systems and leading retailers are jumping ahead of the market in their ability to differentiate through health and wellness and other needs-based experiences, both online and in-store.
Drenik: Once a brand has identified which attributes their products qualify for, how can retailers help them ensure their products are effectively surfaced in consumers’ online searches?
Morris: We’ve seen leading retailers implement a variety of approaches to improve the consumer experience. Basic approaches include adding faceted search filters to their website or mobile app that reflect the top need-state searches of their customers. More sophisticated approaches include curating online stores (like Walmart has done using our data here or cross-category icon programs (which Target has created using our data here)) that present a full selection of products to shoppers with specific need states or shopping preferences. Once accurate and complete product attribute metadata is maintained in a retailer’s data systems, opportunities for improved, innovative and differentiated consumer experiences are countless.
Drenik: In November, Prosper surveyed over 8,000 people and found that almost 70% are taking specific actions to improve their health related to the attributes of their product choices including limiting caloric, fat and sodium intake, and buying more organic, meatless, gluten-free and non-GMO products.
In Label Insight’s own analysis of consumer dietary needs and how they impact product purchasing decisions, your team saw a similar uptick in the desire to live a healthier lifestyle.
In your survey, you identified the top 25 most prevalent attribute-based search terms consumers searched for when shopping for CPG products online. Of the attributes retailers failed to claim, which surprised you most?
Morris: We were surprised at how poorly some of the top allergy related search terms such as “gluten free” or “lactose free” are currently addressed on many retailer websites. 180 million U.S. consumers consider allergies and intolerances when they shop and getting allergies wrong can have serious consequences. We were also surprised that broader attribute-based top consumer search terms such as “healthy” or “diet” were missed by all of the retailers we audited.
Perhaps more staggering than the absence of search terms from a retailer’s site is the absence of qualifying products that are returned when a search term is present.
Imagine having a peanut allergy, shopping at Whole Foods, searching for “peanut-free”, and being directed to buy peanut butter, peanut butter cookies, and peanuts (as Whole Foods unfortunately does on their site, but Walmart, using our product metadata, delightfully and profitably does better on theirs).
Drenik: It’s alarming to hear that so many of the search terms considered to be a priority by consumers aren’t being accounted for. At Prosper, we also found that non-GMO (rated as an important shopping consideration by over 42% of respondents) and organic products (consumers purchase organic almost 63% of the time) are priorities for consumers when shopping, making these attributes one of the many retailers need to accurately identify on their websites.
How does retailers’ inability to surface the right products impact their customer relationships long-term?
Morris: Customer loyalty is a function of trust. If that trust erodes because customers feel a retailer doesn’t understand their individual needs and preferences, customers will look elsewhere. The increasing adoption of grocery e-commerce exacerbates this issue for retailers as the barriers for consumers to evaluate and try out a new retailer are relatively low. We see leading retailers turn this issue on its head by fully embracing their role as trusted partner for need-state shoppers and building loyalty through retail dietician programs, curated lifestyle sections and need-state driven product innovation in their private label portfolios. And, of course, they’re making investments in their data to ensure a full selection of products are stocked and easily discoverable to meet the unique needs and preferences of their customers.
Drenik: In addition to tips for improving the online shopping experience, your report mentions there are other benefits for retailers in providing better quality product information to customers. Can you walk us through what these benefits are and why they matter for retailers especially as they’re selling more online now?
Morris: One significant benefit is the ability to provide better informed replacements for online shoppers. Choosing replacement products in an out-of-stock situation is typically left to the discretion of a third-party picker working with limited information. If the “gluten-free” rotini a consumer orders online are out-of-stock, it’s likely the replacement will be the next rotini on the store shelf whether it’s gluten-free or not.
Another significant benefit stems from more effective customer segmentation. We see leading retailers creating very granular audience segments based on consumer need-states. These micro-targeted audiences are allowing them to do a much better job monetizing retail media, coupons and other programs, and creating exceptional, personalized experiences for their customers.
Drenik: Thanks, Todd, for your insights on the impact of these product information trends on the customer experience. I’m definitely going to think twice about what I might be missing next time I fill out my online grocery order.
To see how a quality and accurate data set can be applied to target marketing models and time series forecasting Prosper has partnered with AWS to make their data available via the AWS DataExchange. Included in the data are a series of US signals, leading indicators, predictive analytics and advance privacy compliant marketing models for the US and China:
To read my previous Forbes articles on changing consumer behavior, predictive analytics, machine learning, data privacy and more, please click here.