Enhancing business strategies: How (and why) to leverage customer sentiment in retail and CPG

In today’s competitive world of retail and consumer packaged goods (CPG), understanding and adapting to customer sentiments is no longer optional. It’s a must.

Customer sentiment is, however, no longer a mystery. Data has made gathering the collective expression of feelings, opinions, and experiences an accessible commodity.

Not only does sentiment data help businesses understand what customers truly think about them.

It also supports data-driven decision-making. And the benefits of basing strategies on real-world data span innovation, enhanced customer experiences, and naturally, profitability.

A McKinsey Global Institute study has revealed that data-driven organisations are 19x more likely to be profitable, 23x more likely to attract customers, and up to 6x more likely to retain these customers.

Especially in retail and consumer packaged goods. Industries are changing at the speed of light, and keeping your finger on the pulse of your customers’ behaviours becomes increasingly difficult for those non-data-driven businesses.

In this blog, we’ll explore the many benefits of embracing customer sentiment in retail and CPG.

We’ll also look at a practical application of how a business can implement sentiment analysis for a structured approach — taken directly from one of our webinars with our partners, Carto.

But first, what is Sentiment?

“Let’s check out the reviews.”

“The photos look great, the reviews not as much.”

“It’s a little pricey, but the reviews are glowing.”

“Your feedback helps us serve you better. Leave a review!”

“This was a terrible experience. I’ll be writing a negative review.”

Do these expressions ring a bell?

If so, you may be among the 95% of consumers who read a review before choosing accommodations, restaurants or making a purchase.

You’re probably also one of the three in four (74%) consumers who say they’ve recently written a review for a local business.

And finally, if you’ve found yourself opting for one product instead of another based solely on customer feedback, then you’re likely among the 82% majority of buyers who trust reviews more than the messages that come directly from the brand.

All this online content — be it reviews or any other kind of digital trace — is called sentiment data, i.e. information or data that conveys the emotions, opinions, or attitudes expressed by individuals, groups, or communities regarding a particular subject, product, service, event, or topic.

Sentiment data is a treasure trove of information for businesses, fulfilling a long-standing yearning — gaining deep insights into the thoughts and sentiments of both existing and prospective customers.

Yet, surprisingly, many organisations fail to include this kind of data in their decision-making and strategies: which is both a problem, and a pity.

If you understand customers’ desires and expectations, you can tailor your offerings to meet real-world demands and exceed expectations, leading to a more successful and customer-centric business approach.

At the same time, ignoring your customers’ needs and demands can negatively impact business performance, whether that’s because of increasing customer dissatisfaction, misaligned product development and communication, or reputation damage.

As a result, this often ends in loss of competitive edge. After all, why should customers gamble on potential disappointment when they are well-informed about another business that precisely caters to their needs and preferences?

As technology advances, forward-looking businesses embracing the latest tech have the upper hand on those that don’t. Particularly in rapidly-changing industries like retail and CPG.

According to statistics quoted in a Forbes article, e-commerce sales in the US alone reached almost $266 billion from July to September.

And with industry growth comes industry change, as it naturally undergoes changes, often catalysed by technological advancements, economic shifts, or societal trends. With these changes, the needs and desires of consumers evolve in response to new possibilities and experiences.

And the best way to keep up with these changes is to rely on data.

What can I do with sentiment-enriched POIs?

Leveraging customer sentiment in retail and CPG offers a powerful lens into consumer preferences and behaviour.

This analytical approach can be applied to various business domains, enhancing decision-making processes and strategies.

But really, how can sentiment-powered POIs be used in real-world situations within the retail and CPG industry?

Market evaluation and expansion

Sentiment-enriched POIs provide a nuanced understanding of consumer sentiments across diverse markets. Through a detailed analysis of sentiment trends associated with various POIs, businesses can tailor their expansion strategies to align with consumer preferences.

This analytical approach unveils critical insights, enabling companies to identify market gaps and strategically plan their growth initiatives to effectively resonate with potential markets.

When combined with popularity data, businesses can validate sentiment insights with real-time foot traffic metrics, enhancing market targeting and expansion planning.

Site selection of brick-and-mortar stores

Incorporating sentiment-enriched POIs into the site selection process for brick-and-mortar stores revolutionises the conventional approach. By delving into consumer sentiments tied to specific locations, businesses can strategically choose sites that reflect and complement their brand identity.

This meticulous analysis ensures that selected sites resonate positively with the local populace, translating into optimised foot traffic and bolstered sales potential.

Integrating popularity data then allows for optimal site selection by combining sentiment analysis with real foot traffic metrics, ensuring high visibility and store performance.

Qualifying distributors

Efficient distributor qualification is essential for seamless product distribution, and sentiment-enriched POIs offer a refined approach. By analysing sentiment trends within the operational areas of potential distributors, businesses can align their brand with distributors whose values and image harmonise with their own.

Optimising distributor selection based on positive sentiment, in retail and CPG outlooks cultivates fruitful partnerships, promoting successful product distribution and nurturing a symbiotic business relationship.

Outdoor advertising

Integrating sentiment analysis into outdoor advertising strategies elevates their impact and resonance. By meticulously assessing consumer sentiment in specific geographic regions, businesses can craft advertising content and placement strategies that deeply resonate with the target audience.

This alignment with prevalent sentiment amplifies the effectiveness and engagement of outdoor campaigns, resulting in a higher return on advertising investment, while popularity data ensures maximum exposure and impact.

Consumer behaviour analysis

Sentiment-enriched POIs pave the way for a profound understanding of consumer behaviour, transcending simple demographics.

Analysing sentiment patterns associated with various POIs reveals intricate details of consumer preferences, motivations, and evolving trends.

Armed with this comprehensive knowledge, businesses can tailor marketing strategies and refine product offerings, ultimately enhancing overall customer experience based on a robust comprehension of consumer behaviour.

Customer sentiment in retail and CPG practical application: Expanding your coffee business

During our webinar with Carto, Sentiment-Driven Market Expansion: Boosting Retail & FMCG Sales with Points of Interest, we illustrated how  businesses can leverage customer sentiment in retail and CPG, as they expand to new markets.

In this case, we took a coffee supplier looking to expand to new merchants in Rome as an example.

The business already has some information at hand, i.e. which locations already supply their product, and the annual revenue these orders result in.

However, that’s not even close to what the business needs to reach the right distributors for their products.

That’s where Data Appeal, and our data, come in.

In particular, the business would need to leverage two of our proprietary indexes: our Sentiment Score, and Popularity Index, as well as our POI data.

Needless to say, this information is invaluable for businesses.

Through this data for instance, this coffee supplier can gain insights into:

• Locations of all food and beverage suppliers in Rome
• The footfall and sentiment scores for each of these

With access to its internal first-party data, this business already has a clear view of the locations they already serve and the annual revenue generated from their orders. 

However, through the data provided by Data Appeal, this business now possesses data on the geographical distribution, popularity, and sentiment scores of all food and beverage suppliers in Rome. 

In the map above, for instance, the similarity score indicates which stores are most similar to your top-performing existing vendors. The coffee distributor should look for larger and lighter points to optimise their distribution selection process, as they indicate a higher likelihood of success in those areas.

Similarly, by using the map above, this coffee supplier can:

1. Identify and target favourably perceived coffee shops

Utilise sentiment analysis to identify coffee shops in the target city with high positive sentiment scores. These establishments could potentially be interested in adding new coffee products to their offerings.

2. Tailor partnership pitches

Craft partnership proposals specifically for coffee shop owners in areas with positive sentiment, and showcase how you coffee products align with the local preferences and how their inclusion can enhance the coffee shop’s appeal to the community.

3. Offer special wholesale deals

Provide attractive wholesale pricing or introductory offers to coffee shop owners in areas with positive sentiment. Highlight how stocking your products can enhance their customer satisfaction and contribute to the positive sentiment of their establishment.

4. Highlight sustainable and ethical sourcing

Emphasise if your coffee products are sustainably sourced, organic, or align with ethical practices. Many coffee shops resonate with these values, and promoting such aspects can attract environmentally and socially conscious establishments.

5. Demonstrate local community involvement

Showcase any involvement or support you offer to the local community. Coffee shop owners often appreciate suppliers who contribute positively to the community, aligning with the positive sentiment.

6. Optimise competitor analysis and market gap identification

Analyse competitors and sentiment in specific areas to spot market gaps, enabling targeted market entry and differentiation strategies.

These strategies are aimed at engaging coffee shop owners to expand your distribution network and product placement within their establishments, aligning with the sentiment and preferences of the target market.

This wealth of information equips you as a hypothetical coffee distributor to make informed decisions and making entering a new market less intimidating, while:

• Pinpointing the specific merchants to target
• Improving market visibility
• Enhancing brand perception
• Tailoring strategic product placement
• Helping target marketing efforts
• Forging successful partnerships
• Increasing sales
• Boosting customer engagement
• Maintaining a strong competitive edge in the coffee supply market.

For further reading and additional insights on this topic, we recommend reading our collaborative blog post with Carto, Boosting Retail & CPG Sales with Sentiment Analysis.