Why Usage Sensing is the Future of CPG Consumer Insights

The results from Home Usage Tests (IHUT), habits and practices, ethnographies, or any consumer research/product testing are only as good as what consumers tell you. Science and our work with CPG brands show that there can be a big gap between stated responses and actual behavior.

Consumer brands still face the fundamental challenge of having to make significant decisions based on limited consumer insights and inaccurate self-reported feedback.

In today’s uncertain economy and environment of shifting consumer demand and usage behavior, it’s even more important to find new sources of accurate insights to fuel innovation, grow sales, boost marketing productivity, and deepen consumer engagement.

The Problems with Traditional Product Research

Traditional methods of conducting consumer or market research have a few fundamental flaws that we see in practice.

Problem #1: Self-reported data ≠ real usage behavior

Consumer product research studies such as in-home usage tests (IHUT), attitudes & usage (A&U), and focus groups depend on consumers to self-report either usage behaviors or their feelings about a product. When consumers are self-reporting how they use your products, such as a bottle of floor cleaner or shampoo, there can be sometimes be a wide gap between between what is reported and what they actually do.

This isn't because consumers are intentionally trying to deceive researchers. It's just human nature. People's observations and perceptions tend to be biased by recency, or lack of recall.

Another aspect is response quantity. If you have a survey that asks a user to write 4 sentences, you rarely get 4 sentences.

Problem #2: Small sample sizes

Most consumer product research studies collect feedback from a very small sample population relative to the overall market size. Testing with larger groups becomes cost prohibitive and slows down market introduction. Using such small samples may yield unreliable insights that aren't statistically significant for a large scale CPG product launch.

Problem #3: One-time, episodic data vs. continuous data

Another problem is that traditional consumer product research methods aren't collecting continuous insights. They are basically a 'snapshot' in time and may miss sharp pivots in consumer's attitudes, shopping preferences and product usage behaviors after the sale.

A big reason for this is that in-home product tests are fairly intrusive. The consumer must agree to a set of instructions and manually log their feedback into a diary or survey tool. The harder it is to submit, the most likely that brands won't get the quantity and quality of insights they seek.

And, these one-time snippets of data don't allow for more research methods such as longitudinal insights for more predictive, trending analysis.

Example: Launching a new CPG container form A leading CPG brand was preparing a launch of a new seasoning mix in a shaker packaging format. The brand team wanted to know how to increase the cross-purchase potential of the new product. The product team assumed a traditional survey-driven method would show how consumers in difference segments use their product. After Adrich's smart consumption platform revealed major differences in product usage across the segments, this product team knew they needed to rethink their plan. Read more

A Better Way: Smart Consumption Tracking

It’s not uncommon that self-reported behavior data is quite different from actual usage data. IHUTs using smart consumption labels often show different usage times, patterns and behaviors from what was self-reported. In one consumer study focused on a detergent bottle, a consumer’s journal entry showed regular uses throughout the IHUT study.

So, how can we bridge the gap in our knowledge of consumer behavior to know what they are really doing with our products and how they are using it? There is a new and better way of conducting market research.

Smart Consumption Tracking

Passive consumer usage tracking works by attaching small connected “smart tags” to consumer product packaging. Through tiny sensors, these IoT enabled smart sensors provide continuous, non-intrusive tracking of where, when, how much the product is being used. It can also track when they container is running out, or about to run out. With opt-in from the consumer, all of this data is securely transmitted to the cloud for business use.

Adrich's smart consumption platform gives brands a lot of options to gain fresh insights about their consumer that were previously impossible or cost-prohibitive, such as:

Continuous, real-time product usage monitoring

Non-intrusive product usage insights.

• WHERE: Geographic location of usage

• WHEN: Time & frequency of usage - First use, every use​, days without use​, days of consecutive use​

• HOW MUCH: Consumption rate of the product

• TEMPERATURE: Product storage

• EMPTY & REFILL: When product runs low and need to be re-ordered

Point-of use consumer engagement

Trigger messages to consumers smartphones, in order to gain additional feedback.

• 2-way communication via app. Initiate personalized, triggered and on-demand communications with consumers via app notification, text or email.

• Personalized, triggered and on-demand communications + product re-ordering.

Replenishment

Real-time monitoring for refillable packaging, consumption-based vs. schedule-based subscription programs

• Product running low​

• Product soon to run low​

• Product refilled​

• Number of refills

• Number of hours, days used

• Target refill volume

Get answers to your most pressing product innovation questions:

• What drives the most consumption? Consumer segment, usage occasion, messaging, or packaging?

• What are the biggest usage occasions?

• Are consumers following product instructions and recommended regimen?

• Why are consumers not using the product?

• Can the initial novelty of the product be sustained? Are they repeating?

• How does the stated (survey responses) behavior compare to the actual behavior

• Distinguish between participants taking part in the study as directed, and those that are not.

With the Adrich smart consumption label attached, a connected product can to track and identify the fact that there was only one usage time-stamp on the day before the IHUT ended, showing an excessive pouring behavior, or dumping of the product, that occurred over several minutes.

Get accurate, real-time insights about who’s using your product, where, when and how much they’re using it, and when they’re running out. Enable "smart" consumption-based reorder / refill / subscription programs. Interact with consumers in real-time, in the best moments, via app notification, email or text.

These insights are driving a new era in market research, innovation, and marketing bringing speed, agility and scale to the existing methodologies.

Consumption Based Product Insights vs. Traditional Methods

Compared to how CPG firms have collected consumer product insights in the past, usage tracking offers several benefits, even when combined with existing methods:

#1: Accuracy

Since smart consumption tracking doesn't rely on self-reported data, it minimizes the various biases that can skew the true picture of what is happening. “We get real-time feedback as the products are being used,” said Kerry Azelton, Associate Research Fellow, The Clorox Company in the same case study mentioned above. “The data we get back is 10 to 100 times more reliable than anything we get in any other tests.”

#2: Less intrusive

Passive consumer usage tracking means that there are fewer demands on consumers in order to take part in a market research study. This non-intrusive method of market research can be set up once, then collect continuous insights for a wider range of use cases.

#3: Larger data set

Get more data and get it in real-time. For instance, the Adrich platform provides over a dozen points of consumption data measurement for deeper insights and ideas for a more robust innovation pipeline or improved messaging. In one example, a manufacturer of fabric softener discovered that some consumers didn’t fully understand the difference between fabric softener and detergent and that some consumers chose to use fabric softener for on-the-go occasions such as a car freshener!

#4: Efficient access to data

Passive usage tracking requires less manual work for insights managers/market research firms due to the automated transmission of usage data right into organized analytics

dashboards. In addition, results can be monitored in real-time. This means that insights professionals can focus more of their time on actually analyzing and thinking about the strategy rather than spending time preparing the data.

The data we get back is 10 to 100 times more reliable than anything we get in any other tests.” -- Kerry Azelton, Associate Research Fellow, The Clorox Company

Ready to Get Started With Smart Consumption Insights?

For brands, real-time usage behavior tracking translates to higher in-market success and better business results, which is the ultimate goal of a consumer insights effort. Through better and more accurate data, brands can prevent launching a product based on the wrong information or identify ways to improve their messaging or existing products to achieve true alignment with the consumers.

At Adrich, we have a vision of products that reorder themselves and connect consumers, homes and brands sustainably. Our goal is to help brands and retailers build better products, deepen consumer engagement and accelerate the adoption of refill consumables.

We are powering new levels of post-purchase consumer insights and smart auto-reordering solutions for the largest brands in the world with patented technology and e-commerce partnerships.

Would you like to see how smart consumption insights can work for your business?

Get in touch for an overview and demo.