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How PepsiCo Put Data to Work Connecting to Customers

Developing a strategy to use first-party data helped the food and beverage giant adopt more nuanced understandings of consumers.

Relying on mass distribution and promotions have historically been ways for consumer goods companies to connect with consumers at scale -- PepsiCo sought a more nuanced approach through its data to respond to the market.

The food and beverage giant has evolved its approach to work with its first-party data to build direct, more personalized relationships with its customers, says Shyam Venugopal, senior vice president of global media and commercial capabilities with PepsiCo. “It’s not just the data that you collect,” he says. “Are your decisions bigger and better?”

In general, using data that offers anonymized pictures of the customer base is nothing new. Venugopal says PepsiCo wanted to go beyond using data for broad efforts such as getting products in big box stores or sold through major events. “We started moving towards less demographic and more contextual, psychographic marketing,” he says.

PepsiCo looked at different approaches to leverage data from different resources for more personalized connections with consumers, seeing momentum build over the past three to four years on this front. “This is where we started actively investing and building out a consumer data ecosystem,” Venugopal says.

Initially, those plans comprised a mix of first-party data augmented by external data resources. Taking a closer look at the digital landscape, PepsiCo saw a diverse mix of data sources such as cookies and mobile IDs come into play, he says. At the onset, the company relied heavily on external resources to access and understand data. Moreover, the company’s first-party data came about primarily as byproducts of its promotional programs, which gave it an ad hoc nature rather than a steady stream of information. Reassessing its approach, PepsiCo set out to reduce its reliance on external data, Venugopal says. “That’s where we actively started accelerating how we get more serious about first-party data at PepsiCo.”

These days, PepsiCo makes first-party data core to its operations, he says, exploring all available avenues to create more direct-to-consumer touchpoints. “Across PepsiCo, we are now scaling up a lot of consumer engagement programs,” Venugopal says.

PepsiCo did have to do some heavy lifting to make that first-party data work, he says. That included establishing a cohesive ecosystem and infrastructure to house the data. “We had infrastructure in pockets,” Venugopal says. “It was governed inconsistently.” The company saw a need to establish more standards, as well as a need to bring in analytics and data scientists to mine the data and develop insights. Their efforts needed to be focused on delivering some benefit to operations, Venugopal says. “Collecting data for data’s sake is suboptimal,” he says.

As its plans to work with first-party data more consistently grew, PepsiCo remained keen on seeing results. That meant assessing whether such programs led to improved insights on consumers to drive business impact, Venugopal says, compared with using third-party resources. “By delivering these insights, are we driving better actions?” he asks. “It’s an initiative the entire enterprise should care about, versus a marketing organization or a CRM organization. It’s something all of us need to be motivated by.”

Though PepsiCo seems satisfied with the strides it has made so far with first-party data resources, there is always room for further improvement. “There are some industry bottlenecks in all this,” Venugopal says. For example, the way identity data is presented can often be fragmented. He wants to see a unified, universal approach that would represent a significant industry shift. Venugopal says that could open the door for opportunities to build progressive, privacy-compliant insight data collaborations in the future.

“We haven’t really cracked the notion of a universal identity,” he says. “If most of these existing platforms and walled gardens can put their differences aside and create a privacy-compliant identity ecosystem, I think it will benefit all of us.”

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