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Nestle SA wants its online sales to go from 13% of revenues in 2020 to 25% in 2025. Achieving the goal will require greater investment in digital marketing, taking spend from 47% in 2020 to 70% by 2025, and creating more meaningful connections with consumers by doubling its first-party consumer data records from 205 million in 2020 to 400 million in 2025.

During a virtual investor day seminar on Nov. 17, the company outlined how it plans to meet its goals. First, it will grow its first-party consumer data records by using its penetration in households as a competitive advantage to collect consumer data at scale.

“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,” said Aude Gandon, global chief marketing officer, during the presentation. “In each category ecosystem, we leverage the data across the consumer journey to create more impactful experiences and identify new business opportunities for our brands and any partner we bring in this ecosystem, bringing growth for all concerned.

“For example, in the culinary category, some Nestle recipe websites reach a monthly traffic of above 200 million visits already. We’re using this asset to drive more sales of our culinary brands or connect it with our direct-to-consumer businesses that we have recently invested in.”

Ms. Gandon emphasized first-party data will be critical in the future as the use of third-party cookies fades.

Using its first-party data, Nestle plans to get its products in the right place at the right time by analyzing the data to identify growth opportunities. Once identified, audiences and individuals may be targeted with personalized content and experiences using artificial intelligence to associate the right content to the right audience.

“We are looking at scaling and monetizing this data ecosystem over the next few years by moving from simply reaching consumers to really engaging and serving them,” Ms. Gandon said.

Additionally, Ms. Gandon said Nestle speaks with 200,000 consumers weekly, monitors 500,000 product reviews monthly, and analyzes millions of consumer interactions.

“We have developed advanced data science capabilities to use these data sources strategically, build predictive analytical models to help improve sales outcomes and consumer lifetime value, and surface this in real time to identify early trend and innovation opportunities,” she said.

As an example, Nestle said it is using the data to better serve retailers in the US by using predictive analytics to identify potential opportunities for new products, detect possible out of stock issues, and propose store-level personalized recommendations on pricing, promotion and assortment optimization.

The data gathering and real-time analysis also will flow through to research and development, according to the company.

“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,” said Bernard Meunier, head of strategic business units of marketing and sales for Nestle. “This test-and-learn methodology is a critical enabler as it allows us to quickly validate our ideas with consumers and make faster, smarter go-to-market decisions.

“Our multidisciplinary teams are equipped with the latest technology to create products and experiences that can test and validate them with consumers all in record time. It’s what we call fast-paced trial and error.”

The May 2021 introduction in Europe of the Wunda brand of pea protein milk was cited as an example of the process.

“The product concept and branding were tested first with consumers online with a direct-to-consumer website set up in four weeks,” Mr. Meunier said. “Following successful reactions gathered online, the product is now rolling out across Europe.”

Securities analysts participating in the virtual seminar wanted to know the costs involved with Nestle’s digital transformation and where the resources to invest will come from. Management declined to give specifics on costs, but Francois-Xavier Roger, chief financial officer, did address how the company plans to pay for the investments.

“We have been generating such resources over recent years through a combination of disciplined control of our structural cost base and the acceleration of our organic growth,” he said. “We expect to follow a similar model going forward, with more of the freed-up resources being used to invest behind growth platform with a key focus on digitalization and sustainability.”

Source: Nestle wants to get closer to consumers … much closer | 2021-11-18 | Food Business News