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Blog > May 2017 > Prioritizing CPG E-Commerce Strategies to Win Big
5/10/2017 11:39:18 AM
By Sam Gagliardi

 

 

It’s no surprise that the ease and access of the internet have radically changed how consumers interact with brands. What may be surprising, though, is that e-commerce sites are behaving more and more like search engines. Today, 71 percent of all product searches begin on retail sites, and an astounding 55 percent of those begin on Amazon. I think it’s safe to say that we are in the midst of a major consumer buying revolution.

Consider the facts:

  • This year alone, digital action will influence 77 percent of all retail sales
  • 76 percent of all shopping trips already begin online
  • 50 percent of CPG category market growth will be online by 2018

In 2016, e-commerce led the way for category dollar growth within CPG, in both edible and non-edible verticals. On average, non-edible categories experienced 24 percent year-over-year (YOY) dollar growth through e-commerce channels, versus a mere 1 percent growth in brick and mortar. For edible categories, average YOY dollar growth was 19 percent; brick-and-mortar sales actually decreased by 2 percent.

Brands can no longer disregard e-commerce as just a channel. Digital disruption and mastering e-commerce are the new order for long-term, sustainable CPG growth, and companies must build, drive and earn a robust e-commerce presence in order to positively affect their bottom line.  

Looking to sharpen their competitive edge, large retailers have been investing heavily in the e-commerce landscape through a variety of initiatives including investing in e-commerce capabilities, acquiring or partnering with other companies to build up their e-commerce potential, and improving the ease-of-purchase experience online to “lock in” shoppers. Target Corp. has invested $1.8 billion in the omnichannel experience, and earlier this year, Whole Foods Market Inc. invested in the delivery startup Instacart, signing a multi-year deal. Eager to gain shopper loyalty, Walmart, Target and Home Depot have all prioritized improving the online shopping experience for consumers.    

Shoppers are the ones driving this e-commerce evolution, as they continue to become more comfortable with the concept and experience of shopping online, and are growing their e-baskets while they develop their own online shopping habits.  

As retailers continue to battle it out for shopper loyalty and bigger e-baskets, best-in-class brands are executing on winning strategies, proactively developing seamless touch points with shoppers all throughout their path to purchase. Together, these factors will determine the winners and losers in the e-commerce marketplace. Which do you think you will be?

Want to talk about assessing and improving your e-commerce strategy? Contact me at Sam.Gagliardi@IRIworldwide.com.