Digital Commerce in the Supermarket Aisle
Strategies for CPG Brands
Without a doubt digital technologies have changed and will continue to change the way consumers are shopping for CPG products in the supermarket. At the intersection of overlapping technologies like mobile devices and applications, social networks, cloud computing, and analytics, is e-commerce and more broadly digital commerce. Much – perhaps, too much – has been written on the impact of digital technology on the consumer and the retail landscape.
We and others have written about the “smarter shopper”, “changed consumer” and “rewired consumer all with messages about what the future may hold. Similarly, a lot has been said about the growth of ecommerce retail, direct-to-consumer store fronts, and technology-enhanced in-store experience.
Why e-commerce for CPG now?
1. While CPG digital commerce is small today, there is a tremendous growth potential.
-The online shoppers we surveyed expect their online purchase to increase 67 percent in the next year.
2. Digital commerce has the potential to drive incremental sales for CPG companies.
-30 percent of consumers describe their CPG e-commerce purchases as primarily or completely new or incremental, that is, not a shift in sales from mass merchandisers and grocery stores.
3. The indifferent consumer: A large population for untapped market potential for e-commerce.
-This group plus those who dislike shopping are most likely to consider ecommerce for CPG products as they don’t get a lot out of the physical in-store shopping experience.
4. Digital commerce enablers improving, while impediments eroding.
-Shipping, pricing/ promotions, dominate the impediments, enablers, and influencers for consumers purchasing online.
5. Digital commerce is for all generations.
-Purchasing products online is not just for tech-savvy Millennials and time-starved Gen X’ers with careers and growing families. Baby Boomers also expect to increase their purchases.
6. Fundamental advantages to CPG companies due to digital commerce that are not available in traditional physical channels.
-There are more assets associated with digital commerce to leverage than probably thought by most CPG executives.
However, the time has come to shift from exploratory conversations on what the future may hold to acting on the fundamental transformative opportunities that exist for CPG companies along the entire path to purchase.
CPG companies have seen shifts of market share move to digital commerce – often in unexpected grocery and mass merchandiser categories. Digital commerce in the supermarket aisle is no longer the proverbial years away. It is here today.
The viewpoints presented in this report are the culmination of a thorough look at both consumer market research and the CPG executive perspective. This report takes a close look at the behavior of online shoppers as well as the digital commerce strategies of CPG companies. It also discusses the capabilities that could help companies deal with the challenges typically encountered in the digital realm that could make the difference for e-commerce success.
“I save money. Often times, online prices are just better than brick-and-mortar retailers. Also, if I buy enough, I can get free shipping. This saves me the time, effort, and gas that would be required to drive to a physical store.”
– Consumer Survey Respondent
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