Nestle desires to be nearer to its customers. considerably nearer
By 2025, Nestle SA hopes to increase its online sales from 13% of total revenue in 2020 to 25%. Reaching the target will necessitate increasing spending on digital marketing—from 47% in 2020 to 70% by 2025—and forging deeper relationships with customers by doubling the number of first-party consumer data records it has—from 205 million in 2020 to 400 million in 2025.
In a Nov. 17 virtual investor day seminar, the company presented its goals and strategies. Using its penetration in households as a competitive advantage, it will first increase the volume of first-party consumer data records it has by gathering customer data at scale.
Global Chief Marketing Officer Aude Gandon stated during the presentation that “direct access to consumers at scale requires more first-party data, collected across our category ecosystems through key digital properties that have such authority to drive traffic.” We use the data from the customer journey in each category ecosystem to make experiences that are more memorable and to find new business opportunities for our brands and any partners we bring in, which benefits everyone.
For instance, many Nestle recipe websites in the culinary area receive more than 200 million hits per month. Using this asset, we hope to increase sales of our culinary brands and establish a link with our recently invested direct-to-consumer enterprises.
As the use of third-party cookies declines, Ms. Gandon stressed the importance of first-party data.
Nestle intends to leverage its first-party data to uncover growth possibilities and place its products at the optimal time and location by evaluating the data. Artificial intelligence can be used to associate the proper content with the right audience once audiences and individuals have been identified. This allows for the delivery of tailored experiences and information.
Over the next few years, Ms. Gandon stated, “we are looking at scaling and monetizing this data ecosystem by moving from simply reaching them to really engaging and serving them.”
Furthermore, according to Ms. Gandon, Nestle monitors 500,000 product evaluations each month, meets with 200,000 customers each week, and examines millions of customer interactions.
“We have built predictive analytical models to help enhance sales outcomes and consumer lifetime worth, and surface this in real time to recognize early trend and innovation opportunities,” the spokesperson stated. “We possess sophisticated information technology capabilities to use this type of information strategically.”
Nestle gave the example of how it is utilizing predictive analytics to find new product opportunities, spot possible out-of-stock situations, and provide store-level personalized recommendations on assortment optimization, pricing, and promotion as ways to better serve US retailers with the data.
The company claims that data collection and real-time analysis will also influence research and development.
Bernard Meunier, head of Nestle’s strategic business units of marketing and sales, said, “In the last few years, we have created multiple R&D accelerators to embrace a test-and-learn mindset and accelerate our speed to market for our innovative new concepts.” “This test-and-learn approach is a crucial enabler since it enables us to make faster, more informed go-to-market decisions and promptly validate our ideas with consumers.
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With the newest technology at their disposal, our interdisciplinary teams can quickly develop experiences and solutions that can be quickly tested and validated with customers. We refer to it as rapid-fire trial and error.
The launch of the Wunda brand of pea protein milk in Europe in May 2021 was given as an illustration of the procedure.
“A direct-to-consumer website was set up in four weeks to test the product concept and branding with consumers online,” Mr. Meunier stated. “After receiving positive feedback online, the product is currently being released throughout Europe.”
Attending the virtual conference, securities analysts inquired about the expenses associated with Nestle’s digital transformation and the source of funding for the investment. The chief financial officer, Francois-Xavier Roger, discussed the company’s payment arrangements for the investments, but management declined to provide exact pricing details.
“We have been producing these resources in the last few years by combining the acceleration of our organic growth with disciplined control over our structural cost base,” he stated. “We anticipate operating under a similar model in the future, investing a larger portion of the freed-up resources in growth platforms with a particular emphasis on digitalization and sustainability.”