AdAge: CPG Sales Are Hiding In Plain Sight

There’s a seismic shift occurring within CPG, and a growing number of stores are shifting their focus to private label products and “last mile” fulfillment. Retailers and brands that want to remain competitive have to adapt to the changes in the consumer landscape.

Brad Bane discusses how despite a growing economy, consumer packaged goods (CPG) brands are reeling from big shifts in consumer behavior. According to one source, 90 of the top 100 CPG brands lost market share in the past year. Yet, stores that primarily sell CPG products are thriving. While sales among “traditional” CPG retailers (retailers whose sales are tracked via conventional point of sale data) inched up 2.1 percent over the 12-month span ending June 30, “blind spot” channels—including Amazon, convenience stores and private-label-oriented retailers like Aldi, Lidl and Trader Joe’s—saw sales increase by a robust 11.7 percent. There’s a seismic shift occurring within CPG, and a growing number of stores are shifting their focus to private label products and “last mile” fulfillment. Retailers and brands that want to remain competitive have to adapt to the changes in the consumer landscape.

Our Take: Opportunities to increase revenue are everywhere, but with a lens limited to point of sale data and traditional advertising/promotional channels, they’re hiding in plain sight. CPG brands and retailers can capitalize on the massive potential being generated by the changing market—if they know where to look. While online and click-and-collect currently represent a smaller portion of CPG sales, they are growing rapidly, and competitive brands are starting to get the message: omnichannel merchandising and category management are a must.

Forbes: Three Ways To Protect Brand Equity In A Digital Age

The majority of CPG brands today are still trying to get caught up on their short- and long-term e-commerce strategies, ensuring they’re baked into their larger enterprise sales plans. Yet, 73% of shoppers are omnichannel, according to an extensive Harvard Business Review study.

Sandi Gonzales examines how there’s no denying that consumers today expect a streamlined digital shopping experience across various channels. This shift in consumer purchasing behavior is happening faster than expected. In fact, a recent Nielsen report predicted that over 70% of shoppers will be grocery shopping online within the next five to seven years, projecting the online grocery market to grow to over $100 billion by 2024. In the race to establish a presence across multiple channels, consumer packaged goods (CPG) brands are faced with unexpected hurdles, especially when it comes to preserving brand equity on multiple digital platforms. She also highlights three key takeaways to include as part of an omnichannel approach, including creating a consistent brand image and voice across multiple channels, casting a wide not both on and offline, and building a strong and cohesive approach to e-commerce.

Our Take: The physical storefront and retail experience gives consumers an opportunity to connect with the product live. Mall owners and big-box retailers recognize this and are actively courting to expand their presence both online and in stores. As Amazon continues pushing Whole Foods, they aim to buy community, to buy intimacy, and to buy into a channel that not only complements its hallmark distribution, but also helps it crossover into clear consumer and branding trends. Simply put, brick-and-mortar retail is not dying, not even close, but the future of retail is in omnichannel which combines eCommerce with physical retail to bring customers the best of both worlds.

CPC Strategy: 7 CPG Industry Trends and Opportunities For Digital Retailers

merges and acquisitions

In many markets the online model, more accurately the online plus offline model, has the potential to offer better value to shoppers — on price, convenience, and choice.

Greg Swan dives into how online sales made up 90% of the growth in the CPG industry last year, highlighting a fast-growing segment in an otherwise slow-growth industry. Once bolstered by scale, CPG giants have been slow to adapt to shifts in consumer behavior, emerging channels, and the advent of smaller, customer-centric digital brands that are carving out their own share of the $600b+ market. Brands like Dollar Shave Club — whose online sales doubled Gillette’s in just three years — are turning the traditional CPG growth model on its head.

Our Take: As the purchasing of CPGs continues to rise, the method in which they are being purchased is being moved from offline to online more than ever. That being said, brick and mortar is still king by a very large margin when it comes to grocery and fast moving consumer goods. By instituting an omnichannel approach, brands can maximize sales especially by targeting consumers on their mobile devices by geo-targeting and mobile proximity marketing. ShopAdvisor’s capabilities of geomarketing and sales lift analyses have boosted sales for CPG brands and retailers across the country and show just how valuable these marketing strategies are.

 

To learn more about ShopAdvisor’s proximity marketing solutions, click here

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