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Why Usage Sensing is the Future of CPG Consumer Insights

Updated: Nov 28, 2023

Home Usage Tests (IHUT) results, 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 making 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 ≠ true 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 usage behaviors or their feelings about a product. When consumers self-report how they use your products, such as a bottle of floor cleaner or shampoo, there can sometimes be a wide gap between what is reported and what they 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 four sentences, you rarely get four sentences.


Problem #2: Small sample sizes


Most consumer product research studies collect feedback from a tiny 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 a 'snapshot' in time and may miss sharp pivots in consumers' 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 instructions and manually log their feedback into a diary or survey tool. The harder it is to submit, the more likely brands won't get the quantity and quality of insights they seek.


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 common for self-reported behavior data to differ from actual usage data. IHUTs using smart consumption labels often show other 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 doing with our products and how they use them? 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 sensors, these IoT-enabled smart labels provide continuous, non-intrusive tracking of where, when, and how much the product is being used. It can also track when the 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 the product runs low and needs to be re-ordered


Point-of-use consumer engagement

Trigger messages to consumers' smartphones 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 most significant usage occasions?

  • Are consumers following product instructions and recommended regimens?

  • 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 participating in the study as directed and those not.

With the Adrich smart consumption label attached, a connected product can track and identify 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 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 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 fewer demands on consumers to participate in a market research study. This non-intrusive market research method can be set up once and then collect continuous insights for a broader 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 fabric softener manufacturer discovered that some consumers didn’t fully understand the difference between fabric softener and detergent and 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 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. We aim 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?


Contact us for an overview and demo.



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