How CPG Brands Can Drive Omnichannel Growth
What You’ll Learn:
✨ The smartest way to manage out of stocks
✨ New strategies to win on the digital shelf
✨ Data that supports your strategy in the increasingly competitive landscape
Hosted by Rajat Nigam, CEO and Founder, Bungee Tech
Click below to watch the session 👇
A Look at this Complex Industry
There’s so much going on in the CPG industry. It’s so complex.
Total CPG online sales are up $21 billion over the last year and only 14% of consumers still solely shop for consumer products in store. That means your e-commerce and omnichannel strategies need to be solid. Grocery e-commerce has permanently accelerated and will approach 10% penetration this year. And while e-com isn’t a huge channel for food and beverage sales (at 5.5% penetration), the broader market includes major subcategories (pet, health, beauty) where e-commerce is critical.
The online channel moves fast! As you know, it’s complex to manage, update, and optimize your product’s pricing or promotions across various retail sites and channels. It’s not simple to get insights on your availability or out-of-stock risk.
It’s a lot to keep tabs on your products to make sure they’re competitive and up to date.
Plus e-commerce comes with a handful of challenges. I’ve seen companies struggle with:
- A lack of systems/data integration
- Inefficient retailer relationships
- No data / unreliable data
There are solutions to these problems – but first let’s talk about this holiday shopping season…
CPG Seasonal Expectations
One thing we know is that this holiday shopping season won’t be like last years.
I saw new consumer research that brands should be thinking about:
• More than half of American consumers research purchases online more carefully than they used to
• Many shoppers are using coupons, discount codes, and switching to lower priced or discount brands
• 38% of consumers look for deals on groceries and everyday items rather than cut back on big-ticket purchases
I think it’ll be really interesting to see how consumers shop this holiday season. We did get our first glimpse at seasonal spending during Amazon’s Early Access sales in October…
📦 44,000+ Amazon Prime orders placed during the sale (a quarter of orders placed were less than $20)
📦 Amazon’s own brands were key players across big categories like personal electronics and home devices
Given all of the seasonal stats, and looking at the whole picture, there are a few key areas CPGs should focus their efforts:
1 • Plan effective promotions & make sure they’re running
2 • Know you have a healthy inventory across channels and retailers
3 • Optimize pricing and monitor your digital shelf
There’ still more than a month until Christmas. After Thanksgiving, e-commerce sales are expected to soar to $10-$12 billion and the market is expected to keep growing until the end of the year.
E-commerce really offers shoppers an endless aisle… which means more spaces for brands to compete. The question becomes – How do I win the online shopper and beat my competition?
The Digital Shelf
Thanks to the digital shelf, there’s unmatched choice for consumers. Increased consumer choice and increased channels means more competition and more opportunity for your loyal customers to switch to new products, shopping destinations, and channels.
The holy grail for brands is meeting your shoppers in their buying journey… whether in a brick—mortar store or while making a purchase using a mobile application.
The digital shelf is the online equivalent of what you would find at eye level in a physical store. And it is important that your existing potential customers are able to discover your products on the digital shelf and have a delightful experience buying them.
In service of this goal, we believe it’s imperative to understand the end consumer experience of searching a product and making a purchase. And this is not only on Amazon or Walmart, but across all retailer’s digital platforms where you are compete with your competitors.
You need to know:
• How your products show up or don’t show up on the digital shelf that shoppers navigate
• How your competitors influence the purchase decision via targeted ads or promotions
• How user and community feedback like reviews and ratings help or hurt your discovery
• How to identify opportunities to improve content to drive more conversion
In addition to that …
You should monitor your price-pack architecture and distribution against competitors across channels and ensure that your promotions or targeted ads are driving the growth expected.
In the end, we believe it’s a combination of all four loyalty drivers — convenience, price-value, selection and experience — that will lead to conversion.
If you’re not actively monitoring digital shelf, pricing, promotions, then you’re missing a opportunity. A loss of sale today is not just a loss of a single purchase but potentially a loss of subscription – and even worse – a permanent change of long-term consumer preference and behavior.
Monitor Out of Stocks
Of course, product availability is critical. Most brands prioritize their availability but might be reactive vs. proactive.
Out of stocks have proven to be costly… Out of stocks lead to about 42% potential sales loss when in-stock rate drops from 90%+ to <30%. It takes 3-4 days to regain full sales volume after 1 day out of stock and 6-7 days to recover organic placement if you have roughly 2 or more days out of stock.
Again, a loss of sale today because of out of stocks isn’t just a loss of a single purchase… it’s potentially a loss of subscription or a permanent change of long-term consumer preference and behavior.
By the way, we believe you should monitor your competitors out of stocks too and take advantage of the opportunity it presents.
Track your availability so you don’t leave money on the table.
Core Digital Measures
What’s the formula for winning? If you want to win in this space, you need discipline and tons of market data.
We monitor markets across the country – this enables CPG brands to respond to competition and lead their respective segment.
Your secret weapon = the integrated platform we have built for gathering competitive intelligence and creating action driving analytics from it. Drive your growth with core digital measures by monitoring price, promotion, availability, and assortment. This helps you gain distribution, price more competitively, run more effective promotions, and connect with customers.