Insights into selling consumer packaged goods online (CPG). Digital disruptors like Amazon have forced more traditional brick-and-mortar businesses to rise up and adapt in a variety of ways.

Last year alone, CPG online sales in the U.S. totalled $58.6 billion, which accounts for 11% of total CPG retail sales. And, online sales made up 64% of total last year’s growth.

Consumer spending habits have transformed. Not only has the CPG industry shown exceptional growth in the past few years, but the rate of CPG sales growth is expected to continue to increase year over year. 

CPG Industry Trends

The CPG industry may appear to be one of the most accessible verticals to understand given their ubiquitous in daily life, yet there is enormous disruption in the space given growing ecommerce opportunities. We’ve illustrated below some of the top five strategies one can utilise to help move with the motion of the CPG industry.

Omnichannel strategies.

It’s important to present a fully unified experience across every customer touchpoint. A customer spends time with your brand digitally and offline and expects consistency in their experience, no matter where they are.

A fully unified, cross-device customer profile in your customer data platform (CDP) is essential. In addition, all messaging should support an ongoing and consistent conversation with the customer. Omnichannel Marketing is the way forward.

Subscription models

Subscription models enrich and streamline the transaction process for both online retailers and consumers. The increase in consumer demand for CPG product subscriptions can be credited to saving time and money through automation of the purchase process.

On the business side, it allows you to maintain a consistent form of revenue from ecommerce sales, making inventory easier to manage and reducing the cost of sale. However, to attain this model, CPG brands must be prepared to offer an exceptional product and easy end-to-end experience, and to build loyal relationships with their shoppers to keep them aboard.

Personalisation

Personalisation ultimately leverages data to control the conversation and experience of content being delivered to customers throughout their journey, across all digital channels — and even beyond. 

Predictive personalisation software (PPS) now anticipates what each consumer is in the marketing to buy next. The AI software is reported by McKinsey, Forrester, Bain and Statista to make as much as 20 times the ROI than traditional marketing offers, and is an essential “must have” stack element for ecommerce retailers today.

This totally automatic system, requiring zero human input whatsoever, perpetually maintains products offered to each individual consumer based on their own buying tastes and viewing impressions.

4. Branding.

Consistent brand identity is critical in communicating your brand to potential and existing online shoppers. A content strategy with engaging creative assets that seamlessly flex across devices and channels is necessary to the success of your business.

Furthermore, effective branding builds a robust identity for consumers to latch onto, ensuring that your company is represented effectively on an aesthetic level.

Strategies to Initiate CPG Sales Growth Online

Ecommerce opportunities in the CPG industry have ballooned in past years thanks to the rapid growth of retail titans such as Amazon and Walmart. The former’s acquisition of Whole Foods and entry into same-day delivery groceries has become its fastest growing category at a 40%+ clip. With that in mind, here are four notable CPG strategies to help capture in your commerce offering to initiate CPG sales growth online.

1. Offer a subscription model to tap into recurring revenue.

Subscription models can help the purchaser save time and money, and reduce the effort needed to remember to buy these regularly purchased consumer goods.

Most CPG products are purchased in periodic intervals. For example, the average consumer may need a new toothbrush and toothpaste every two months or a box of tissues every month. Committing to a subscription model is very attractive to some consumers, as it can save money on bulk pricing and save time with less frequent check-out. They also get the peace of mind that they’ll receive their consumable goods in a timely manner without complication.

Given that a consumer knows they need these CPGs regardless of circumstance, subscriptions can be leveraged to personalise a direct-to-consumer (DTC) relationship and capture a year’s worth of purchases in one click.

The cyclical nature of CPG sales make subscription models a powerful vehicle for consumer brands’ ecommerce offerings, and most disruptors have already made serious in-ways in conquering the subscription model. For any successful DTC business, taking the thinking out of any routine rooted in tedium will go a long way in conversion and sales.

2. Pick your best brands and double down on content.

CPG companies face the classic conundrum in economics: scarcity. The average CPG company may have dozens of products under their business, but giving each and every brand an equal amount of marketing and promotion can be an unnecessary, budget-bloating expenditure.

Instead, pick a direction to specialise in a few brands, and have them flagship your company. For example, focusing on your strongest brands and establishing a strong digital presence and rich content offering is a no-brainer. These strategies have the most direct impact on consumers and will help maintain relevancy and brand recognition.

However, an alternate — and equally viable — path is to test the market for products that are not widely distributed. Invest in these brands and charter guerilla marketing campaigns that disassociate from your main brand. This can lead to unique, distinguished offerings that capture niches and demographics beyond your current scope.

3. Use your mission to your advantage.

The claim that there’s no such thing as bad publicity is not unfounded — however, while bad publicity may increase brand recognition, it is also likely to plummet sales and hurt your business overall.

A strong brand comes with a strong mission that tailors well to your consumer’s ideals and ethics. You only seek to gain by ensuring your CPGs are sustainable and ethical — with ethical products, you’re much less likely to fall victim to a boycott or other bad press.

4. Build a connection with your customers.

Personalisation plays another key role in providing soft power to your CPG brand. Pet food is a product category that is using compelling personalisation strategies, offering a wide variety of options based on consumer preference.

Personalisation plays another key role in providing soft power to your CPG brand. Pet food is a product category that is using compelling personalisation strategies, offering a wide variety of options based on consumer preference.

By genuinely connecting with your customers, you have a strategic advantage over those brands who do not.  

Executive Summary

All in all, the D2C disruptions in the CPG space are a space by which businesses can enjoy rapid growth and connection with their consumer base. The plethora of services and functions that D2C can accomplish where other mediums lag make it ideal for any expansion in the vertical.