Most people still associate consumer packaged goods, or CPG, with items sold on the shelves of grocery, drug, and discount stores – but the category is actually much broader.
CPG refers to the kinds of packaged products that people consume and need to replenish, like coffee, dog food, and soap. Historically, limited space on store shelves drove much of the competitiveness in the market. More recently, CPG digital marketing has offered companies the chance to grow beyond the limitations of physical space and sometimes, even to capture a larger share of that. Find out more about e-commerce digital marketing trends for CPGs and how this information can help inform your marketing.
CPG Digital Marketing Trends and Consumer Preferences
Most people still buy their packaged products in local stores. At the same time, online demand has been growing every year, as demonstrated by these consumer products marketing trends from IRI, an online sales insight service:
- Online CGP sales grew by over 34 percent in 2018 alone.
- Online revenue accounted for 11 percent of total consumer packed goods sales.
- Even more interesting, internet sales of consumer packaged goods made up 64 percent to the total market growth for both offline and online revenue.
Which Platforms Sell the Most Consumer Packaged Goods?
Besides sales numbers, it’s also informative to see what sorts of platforms most of these sales came from. According to IRI, over half of the sales came from internet-only retailers. Some of the largest examples include such online grocery stores as FreshDirect and Peapod. CGP digital marketing from the websites of mostly brick-and-mortar stores produced about one-quarter of the sales. Companies that directly sell their own products have a smaller but rapidly growing share.
How is DTC Marketing Impacting Sales and Growth?
Because of the loss of many retail outlets, manufacturers have recently struggled even more for a share of physical store space. To make up for this loss, they have increasingly bypassed traditional retailers in order to connect directly with consumers. According to the Shopify blog, direct-to-consumer, or DTC marketing, has accounted for 40 percent of sales growth in the market.
Direct marketing has done more than help established CPG manufacturers offset slowdowns in their traditional selling channels. It’s also launched such purely DTC marketing brands as Dollar Shave Club and The Honest Company. In some cases, new brands have begun their lives online, found success, and then made their way into retail stores. For example, Deliciou is an Australian company that markets their packaged seasoning blends online but has also recently found shelf space inside such large U.S. retailers as Whole Foods.
What CPGs Do Shoppers Buy the Most?
What kinds of packaged products do people buy online the most? In general, people most commonly turn to the internet to order non-food items. More specifically, vitamin supplements, pet supplies and food, and skin care products, and coffee have enjoyed brisk online sales. Also, shoppers have increasingly begun to turn to online retailers for more sensitive purchases. As an example, the demand for adult incontinence products boomed by 84 percent in the past year. Consumers turn to internet ordering and delivery options for convenience in sometimes, for privacy.
What Drives Consumers to Choose Online CPG Retailers?
An IRI consumer survey asked online shoppers what options they looked for in e-ecommerce stores. They survey takers could select more than one option. The survey found:
- Free delivery motivated over half of respondents to purchase online.
- Almost half said that if the delivery isn’t free, it should be reasonably fast.
- Four out of ten of these online shoppers also liked in-store pickup options.
- About one-third of the survey takers would consider subscription services that automatically sent supplies periodically, typically at a discount over just ordering one time.
- According to the survey, online shoppers also want to find online retailers who will offer them good deals. Over half plan to search for discounts and coupons and use various sites to compare prices.
Using CPG Marketing Trends to Inform Your Marketing Strategy
Right now, online sales of CGP make up a relatively small but rapidly growing share of the overall market. They can help producers offset increased competition for retail store space through online sales. In some cases, e-commerce marketing can even help new brands get established by making online sales and even getting enough brand recognition to earn coveted slots at brick-and-mortar stores. Now that you understand the benefits of selling CPG online, you can explore ways to get consumers to buy products online that they still may be used to picking up at the grocery store.
SEM Marketing for Consumer Packaged Products
Just as it’s important to leverage good product placement in stores, you can use search engine marketing to put your brands directly in front of customers. Both for paid and organic SEM marketing for consumer goods, you need to make certain that you rise to the top for the sorts of terms that searchers are likely to use for products like yours.
For instance, shoppers might not know to look for your brand of hypoallergenic soap or organic, fair-trade coffee, but instead, they may search for those terms or specific problems your product might solve. To optimize your web pages, make certain you research the kinds of search terms consumers might try. Use those terms to optimize your headings, descriptions, and content. In addition, you should try to build your e-commerce shop’s authority by encouraging high-quality incoming links from other relevant websites. For example, you might seek reviews on blogs, issue press releases, or get listed in high-quality directories.
Besides organic search, CPG manufacturers have spent millions of dollars on paid search marketing, according to Search Engine Land. One standard tactic consists of promoting useful content related to their brands. For instance, a packaged food manufacturer might create simple recipes that feature their products. Colgate found success by producing oral health information that related to diabetes. If you find that the direct keywords for your product are too difficult to ranks for in either paid or organic search, you might consider researching some relevant topics that are still interesting to people who might buy your products.
SMM Marketing for Consumer Products
Today’s consumers often learn about products from social media. Social sites can also help you express your brand personality and connect with consumers in a way that helps them identify with your brand. Gartner found that almost nine out of ten companies focus upon delivering a memorable customer service. In a market like consumer packaged goods, when products may seem like interchangeable commodities at first glance, your social presence can provide the key to helping your brand stand out.
SMM marketing also lets you target specific demographics that reflect your buyer persona. For instance, mothers drive a good share of consumer packaged good spending. Moms also login to Facebook about 10 times a day and make up a large part of the audience for Instagram, Pinterest, and other social sites. If you want to target mothers or many other groups, social media marketing can offer you the right audience. If you use the social site’s advertising platform, it will give you the ability to tune your e-commerce digital targeting very well.
For social sites, experiment with a variety of advertising formats and posts. Videos and graphics tend to capture attention, but you may also want to use text sometimes for testimonials, ingredients, or other useful content. Try to showcase your brand’s personality, and certainly, respond to customers when they post questions or comments about your products, ads, or posts.
Even though you should focus heavily on your call to action, you should try to provide plenty of content that will interest customers in a way that doesn’t always seem like selling. Social sites provide a good platform to spotlight your company’s commitment to worthy causes, how your products solve problems, and even your customers. If you’re selling ketchup, dishwashing soap, or lotion, you need to make certain people remember your brand positively, and your social media can help you do that.
Consider Multiple Channels
Customers tend to research online, if they eventually purchase at an e-commerce site or at a local store. Some manufacturers worried about cannibalizing offline sales when they first considered online sales. Many have found that instead of hurting brick-and-mortar revenue, the additional exposure has actually improved demand and even helped them leverage better visibility on physical shelves, besides providing additional revenue through internet purchases. Some companies began purely online and eventually made their way into stores because of their brand recognition.
A recent BrandShop survey found that today’s over 80 percent of consumers expect to have the option to shop when they visit a brand’s website. About the same percentage of survey takers said they’d shop at their favorite brand’s site if they could. For many products, they also like to take advantage of convenient options to have consumables delivered on a monthly schedule.
If you’re going to promote your company and your business website, you might as well give customers the option to purchase there instead of forcing them to find a retailer or distributor. This also lets you take more control over your customer’s experience and also, gather more data on their shopping behavior.
Why Embrace E-Commerce for Consumer Packaged Goods?
With consumer packaged goods, e-commerce is where the growth lies. The exposure, brand differentiation, and extra sales you make online can even help you compete for better placement offline. You’re also not at the mercy of retailers for shelf space and perhaps as important, control of the customer experience and consumer information.