How E-Commerce Has Changed for CPG Brands and What it Takes to Succeed

CPG Brands

Over the course of 2020 and early 2021, e-commerce grew at lightning speed out of necessity. Not only did consumers embrace online shopping overnight, but savvy brands and retailers did as well. To put this growth into perspective, as of 2018, global e-commerce sales had not reached the $3 trillion mark. However, it surpassed $4 trillion in 2020 and eMarketer predicts it will exceed $6 trillion by 2024. While these numbers and insight are high-level and generalized, there were specific categories that stood out among others. For example, CPG brands are now the third-largest category of investors in digital ad spend. In this blog post, we share more about how e-commerce has changed for CPG brands. And we also share strategic guidance to help your brand succeed.

The Typical Path To Purchase Has Changed 

As alluded to, the pandemic changed everything for brands, retailers, and consumers alike. Looking back, sales for online grocery delivery doubled at the onset of coronavirus while online shoppers grew from 13% of the US to one-third. This growth all happened within a few weeks and continues to progress. Now, with a full year’s worth of data and analysis, there’s plenty to unpack. 

Arguably one of the most influential developments for CPG brands was the disruption to their shopper’s path to purchase. For an industry that traditionally focused on in-store operations, the shift to online needed to be swift and intentional. 

Pre-pandemic most CPG brands and marketers built strategies around a buying cycle that stood tried and true for years. To summarize, there were three segments listed below alongside their purpose. 

  • Before: Awareness & Purchase Intent 
  • In-Store: Conversion
  • After: Positive Customer Experience, Increase Awareness, Encourage Repurchasing 

Now, the buying cycle for all categories is completely reimagined. And driving conversions and re-conversions is the focus before, during, and after a shopper visits an in-store location.

Consumer Wants And Needs Are A Moving Target 

As if the above wasn’t enough change at once, the average consumer’s wants and needs have also evolved. And, the demand for specific products was almost as unprecedented as the pandemic. What consumers were searching for changed on a weekly if not daily basis as more information about COVID-19 was available.

At the beginning of 2020, pandemic-related ‘essentials’ were in high demand. Some examples of these products include face masks, hand sanitizer, non-perishable food, and toilet paper. But, as the coronavirus and its implications spread, demand for ‘non-essential’ products resurfaced. As a result, unlike many categories, CPG advertisers were able to continue spending and reaching customers. This alone allowed many brands in the industry to stay afloat despite the lack of in-store traffic.

A Strong Omnichannel Presence Is Key 

With such drastic transitions, CPG brands, advertisers, and marketers have had to adapt. As we mentioned, those that survived and thrived during the pandemic fully embraced e-commerce. However, to continue the momentum and remain relevant, currently and in the future, an omnichannel presence is key. 

Prioritizing an omnichannel strategy will make it possible to stay ahead of the changing behavior of customers. Especially since in-store shopping will soon make a comeback and many shoppers will continue to buy online. This means your presence across marketplaces, social media, your D2C website, and in-store should be aligned. 

Doing so is crucial because consumers expect consistency regardless of where they’re shopping. Now, more than ever, customers are engaging with brands online. And, while many conversions are happening online, they’re also taking place in-store.  The chances of in-store conversions are now often influenced by a positive digital experience. With this, the inverse is also true. If a customer has a positive experience when buying in-store, they’re more likely to repurchase when they’re shopping online.

Final Thoughts 

Although the majority of this blog post focused on the CPG industry, on some level it applies to most brands. But, the pressure is on CPG brands as the category’s e-commerce growth is expected to continue. In fact, it’s estimated that 80% of those that shopped online for groceries during the pandemic will continue to do so after the world reopens. 

To ensure our CPG and grocery clients are set up for success, we’ve worked closely with our parent company, Code3, to ensure they can cover all their bases. If you could use the support of a strategic partner for your brand’s media, creative, and commerce efforts, schedule a free consultation. And, as always, we’re here to answer any questions about your brand’s online presence. Finally, if you’re interested in learning more about our clients’ results, check out these additional resources.

Hannah West Dalpiaz

Hannah West Dalpiaz