Grocery eCommerce is exploding, with eMarketer estimating US food and beverage sales growing from 18.2 percent to $19.89 billion. By 2021, the figure is projected to reach $38.16 billion. But this growth isn’t happening in a vacuum. Entrepreneurs and investors are pushing the industry, and consumers are pulling the industry, towards the disruptive change necessary to sustain this level of growth. CPG brands that cling to old marketing techniques run the risk of being left behind. We need to consider that marketing tactics that work in the physical world will often not work in digital. But even more challenging is the fact that online tactics that work well in other industries may also find dead ends in CPG. So how do brands avoid these eCommerce pitfalls and find a clear path to success? Here are a few strategies to consider: Don’t Engage…Enable This next sentence is likely to send shockwaves through many of today’s marketers: Engagement is a bad idea when it comes to CPG. Consumer engagement can be a brilliant strategy in high consideration product categories (think cars, TVs, lawnmowers, etc.) because these decisions are made over time, during which consumers tend to follow a definable funnel. But CPG buyers are making purchase decisions on what they consider low-risk products. They are not looking for engagement to make them more comfortable, nor do they generally need a contest, survey or game to make them feel more connected to the brand. They simply want to make the purchase and get on with their lives. Our behavioral research shows that every click/choice a customer must make to buy a CPG product online causes 80 percent of them to abandon the process. CPG consumers purchase on impulse, and a successful brand will focus their efforts on enabling that intent. That means eliminating complicated paths to purchase and streamlining websites so consumers can easily add products into carts. How many clicks should there be from initial interest to purchase? How about one? Understand the Digital CPG Mindset In a CPG world, it’s understandable to think that price matters, but in reality it takes up very little of the consumers’ digital decision-making space. We have found that less than 2 percent of CPG shoppers compare product pricing, even when simple comparison tools are available. It’s sensitivity to friction that more often impedes the purchasing process, not price sensitivity. Another surprising area of friction lies in choice. An overwhelming array of product options including size, color, flavor, scent, etc. can delay or derail the quick buying decision because there are too many options to consider. Albert Einstein and many other thought leaders wore the same clothing every day to cut down on the number of decisions in their day. To that same effect, CPG consumers have the same mentality, even if it’s only at a subconscious level. We have found that limiting choice to three or fewer options can quadruple the number of consumers who choose to buy, compared to having four or more options. We also discovered that digital ads offering a single size option for the product drive 13 times more sales than those having multiple options. Meet Consumers’ Needs Of course, even if the buying process is simple, you still have to inspire consumers to act. We’ve seen great examples of CPG brands innovating to meet new consumer needs and connect with consumers’ deeper values in ways that drive purchase decisions. Brands are using SmartLabels, powered by data from companies like Label Insight to make nutritional, ingredient and packaging information transparent to consumers. Through the innovative Loop program, brands and retailers are partnering to fill the desire for more sustainable packaging … without compromise. Where consumers lose interest in clunky recycling or in too-weak packaging (I’m looking at you, water-bottle-that-won’t-stand-up), Loop will succeed by providing sustainability through upgraded, beautiful packaging that can be reused. As with innovation on the path to purchase, success depends on meeting consumers’ existing needs in innovative ways, not expecting them to change to meet brand needs. Payoff Is Worth it CPG eCommerce should be embraced as a way to build sales while making consumers’ lives easier and more fun. Play around with reimagining online carts as places to help build shopping lists, enable consideration for products to make life better, and to make repeat purchases easier. Think of ways to surprise and delight the consumer by saving them time and decision weight. As an industry, we have to break the habitual patterns that result in mediocre results, by expecting shoppers to do things that shoppers do not naturally do (or want to do). CPG companies that tailor their paths to purchase to the nuances of how consumers want to shop, while continuing to be creative with their products and marketing, can enjoy record growth in the years to come. This article originally appeared on CPGMatters.com.
Advertising Fundamentals for a Collapsed Consumer Journey Today’s Retail Problem With online grocery sales projected to grow 20% from 2021 to 2022 and 75% of consumers now buying CPG products online, marketers must lean into new tactics to increase attention and purchase intent. RESEARCH