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Five Things that Every CPG Brand Needs To Do to Win Online

CPG Brand Success

For years, CPG manufacturers have thought of the e-commerce channel as an opportunity further off in the future. AdAge projects that by 2018, $35 billion of CPG sales will occur online, suggesting that “tomorrow” is quickly approaching.

The rapid growth of online retailer Amazon has been an important accelerator for CPG e-commerce. Amazon programs like Prime and Subscribe & Save are the enablers needed to make buying lower-priced, regularly purchased items online (such as shampoo or skin care products) feasible for consumers. Amazon’s recently launched PrimePantry service already attracts nearly 400,000 interested shoppers a month.

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With this in mind, there are five things that every CPG brand should be doing as they plan and execute their e-commerce strategy:

Capitalize on brand.com sites

The first step in driving more CPG sales through e-commerce channels is to capitalize on consumer interest in your brand and make consumers aware that the option exists to purchase your products online.

An analysis of all online CPG traffic reveals that, on average, 55% of any website visit in the CPG category occurs on a brand site. However, the majority of content found on brand.com sites is focused on equipping the consumer for a future trip to an offline store, such as researching product information or downloading coupons. Very few CPG brand.com sites encourage consumers to consider or purchase online.

For example, Pepsico’s Frito-Lay, one of the largest food manufacturers, makes little or no mention of the option to purchase its brands on Amazon.com. However, Amazon is one of the top 15 destinations that visitors to fritolay.com go after visiting its site. Building an effective, engaging brand.com property might be the first step in driving improved e-commerce sales.

Invest where consumers spend time

In the offline world, the chances of a consumer being exposed to shopper marketing while thumbing through the Sunday flyers or walking through aisles are extremely high. But in the online world, consumers are much more in control of the brands and associated marketing they are exposed to.

Many brands have invested in dedicated brand-specific sections on Amazon.com, yet in most CPG categories, exposure to that content represents less than 5% of total shopping trips. It is important for brands to be relevant and visible where consumers actually spend their time, rather than what is convenient.

Look beyond Amazon

Amazon is getting the most attention as CPG brands wade into e-commerce – and rightly so: Amazon is responsible for as much as 60-70% of online sales, depending on the packaged goods category.

However, other retailers need help shaping their e-commerce strategies and developing innovative programs too. For example, Target has launched a subscription program in select CPG categories that are intended to mimic Amazon Subscribe and Save. Retailers and brands need to take a step back, understand what is unique about the retailer’s shopper base and how those consumers shop in order to develop a retailer-specific go-to-market strategy.

Measure success with more than just click through

Paid display advertising is one of the largest investments that CPG brands are making online. An analysis of the online behaviors of consumers exposed to a CPG brand’s digital advertising uncovered that there was a 3X lift in visitation to a brand’s product page at an online retailer versus a similar control group.

Brands need to get smarter about what impact their advertising is having on consumer behavior – particularly around increasing active brand shopping and consideration across online retailers.

Identify competitive threats online

The cost of market entry for niche/specialty brands to sell online is often significantly less than through traditional, offline retail channels. In some cases, shoppers are more likely to be exposed to niche brands online. For example, in the pet food and snacks categories, premium/natural brands that are manufactured by niche players represent almost half of the category traffic on Amazon.

Understanding these competitive dynamics in your category is key to developing a winning e-commerce strategy.

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Five Things that Every CPG Brand Needs To Do to Win Online
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Five Things that Every CPG Brand Needs To Do to Win Online
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For years, CPG manufacturers have thought of the e-commerce channel as an opportunity further off in the future. AdAge projects that by 2018, $35 billion of CPG sales will occur online, suggesting that “tomorrow” is quickly approaching.
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Egochi
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Posted on March 26, 2018 in E Commerce, Internet Marketing

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About the Author

Innovation & Creativity is the key to success. Hi, my name is Jobin John, before founding Egochi I worked with Brands like Xbox, American Express, SBC Yahoo. Thumb rule of business is to use hard work with intelligence.
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