Unmasking How CPGs Can Get as Close to Their Customers as Direct-to-Consumer Brands

By Jennifer Pelino, Media Center of Excellence, IRI



“Marketing without data is like driving with your eyes closed.”
– Dan Zarrella, social media scientist and author


Direct-to-consumer (D2C) brands have some major advantages over legacy brands: they can often get to market faster, they can experiment more freely with partnerships and distribution models, and they are rarely seen as commodities. Most importantly, they intimately know their customers. This is because they possess and control their data, getting it directly from the source, which gives them the clearest picture of what, when, where and why their customers buy.

A recent survey of 200 senior brand marketers reinforces the value of first-party data. The top reasons these decision makers cited for using first-party data included:

1.   Improved campaign performance/ROI
2.   Accuracy/data quality
3.   Lends to more precise targeting
4.   Improved measurement and attribution

CPG brands often don’t have an abundance of first-party data given that the retailer typically holds the relationship with the consumer and the data. But what if brands could use second- and third-party data to get the same or even more benefits than D2C brands?

The Case for Purchase-Based Data

Purchase-based data, combined with powerful analytics, enables traditional brands to achieve the same, or even better, levels of personalization as D2C brands. This type of data eliminates the guesswork of consumers, who often fail to remember the details of what and how much they bought. Research has shown that consumers’ claimed purchases are inaccurate as much as 40% of the time.

Purchase-based targeting data picks up the small signals that demographic, contextual and other behavioral data misses. Using the concept of sustainability as an example, it quickly becomes clear via purchase-based research that the concept is multifaceted and highly nuanced – it means very different things to different consumers.

In a consumer survey on sustainability conducted by IRI in April 2019, respondents answered the question, “Please pick the top three things that you most closely associate with the term ‘sustainability.’” Answers included “minimizing negative environmental impact” (42%) and “commitment to renewable resources” (41%) but the research also revealed less obvious, but actionable, opinions, such as “people/organizations working in ways that benefit society at large” (18%) and “reducing poverty” (18%).



Beyond these general results, attitudes shifted based on other attributes, such as income and age. For example, when asked about which product characteristics they associated with sustainability, Gen Z’s tended to focus on “natural” and “organic,” while millennials emphasized “ethically sourced.”

Without purchase-based data, it is impossible to know if what consumers are saying they care about matches what they actually do – that is, what they are buying at the store.  

Confectioner Drives New and Existing Brand Buyers

A real-world example highlights the business case for using purchase-based data over other data sources as the foundation of audience building.

A confectionery manufacturer was running individual social media campaigns across three non-chocolate brands within its portfolio. Historically, its social media campaigns leveraged lifestyle and interest-based audiences due to the wide, distinctive reach between the brands. (An example of one of these types of audiences is “back-to-school,” comprised of households that buy items to be packed with school lunches.)

The manufacturer wanted to understand the impact of using purchase-based data within its audiences but without abandoning its lifestyle-focused strategic approach to targeting. Each of its brands developed a variety of mutually exclusive lifestyle audiences, built from the foundation of past consumer purchases from across the store, that brought in lifestyle attributes that laddered up to contextual and attitudinal behaviors.  For example, instead of just looking at buyers within the confectionery category across the store, a consumer basket was used, targeting “sweet tooths” or heavy purchasers of candy, cookies, frozen/refrigerated desserts, pastries, donuts, pies and cakes. If a consumer is buying chocolate cake, they might be interested in buying chocolate candy too.   

The results were dramatic for the confectionery category, as all three brands achieved an average 2.6% dollar sales lift within four weeks. The manufacturer attributed 50% stronger dollar household sales to the lifestyle audiences built from 100% deterministic purchase data versus the audiences built from non-purchase data. For all three brands, purchase-based lifestyle audiences also drove both new and existing brand buyers to buy the brand, increasing household penetration more efficiently than contextual and interest-based audiences. 

Leveling the Playing Field

Launching and building successful brands requires more than just a lot of data. It requires the right data, ethically sourced, that is based on actual purchase-behavior. With the right partner, CPG brands can access second- and third-party data that behaves more like the first-party data D2C brands natively have.

Being able to level this playing field allows CPG brands to make better decisions faster, deepen customer connections, increase customer lifetime value and achieve a higher return on ad spend – desirable outcomes for any business.

Are you interested in learning more about how to get the benefits of first-party data through your existing second- and third-party data? Contact your IRI representative or email us at




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