Revolutionizing Online Shopping: The Latest CPG Ecommerce Trends to Watch
How covid changed the dynamics of online businesses is old news, but what is new is how they react, adapt, and handle online presence and business marketing to reach a bigger and more informed online audience.
The only constant in businesses (and life) is change. As a natural consequence of that fascinating and constant change every year, marketing professionals and business owners see a new trend in the market, some are like shooting starts, and some are here to stay and become part of everyday marketing strategies and tools.
To maintain a competitive edge, paying close attention to the latest trends to observe and adapt our strategies are essential within the marketing business.
Consumer Packaged Goods (CPG) companies have recognized the need to adapt to this trend to stay competitive. Read on to discover the landscape of the most exciting and innovative trends to watch out for in the world of CPG brands.
The Growth of Consumer Packaged Goods Ecommerce
The world of ecommerce has been growing at an unprecedented rate in recent years, and CPG brands are no exception. In 2020, global ecommerce sales topped $4.2 trillion, with CPG ecommerce accounting for a significant portion of that figure.
Several factors have influenced the growth of CPG ecommerce. Firstly, the COVID-19 pandemic accelerated the shift towards online shopping, with more consumers opting for the safety and convenience of buying products online. Secondly, the rise of mobile devices has made it easier for consumers to shop online anytime, anywhere.
Technologies have also been a factor for CPG brands to offer personalized shopping experiences that cater to the unique needs and preferences of individual consumers’ demand to improve and boost their online sales.
To embrace the new technologies in the fast-paced world of ecommerce CPG is reinventing itself. Here are some of the trends to watch out for in the world of the CPG industry.
Latest Trends in CPG Industry Ecommerce
Consumer behavior is the compass of the Consumer Packaged Goods industry. They must hear existing customers and respond to their needs and preferences to improve customer retention rates.
Voice search is rapidly gaining popularity as a convenient way for consumers to search for products online. According to a report 50% of consumers between the ages 25-34 use voice search daily in 2022. CPG brands must optimize their online stores for voice search to ensure they are visible to consumers using this technology.
Optimizing for voice search includes multiple factors, such as using natural language in product descriptions, optimizing for long-tail keywords, and ensuring that product information is up-to-date and accurate.
CPG brands can also leverage voice-enabled devices, for example, Amazon Alexa and Google Home, to provide unique shopping experiences.
Mobile Optimization for CPG Ecommerce
Mobile optimization is critical for CPG brands looking to stay up-to-date with CPG industry trends.
According to a recent study, mobile ecommerce sales are projected to exceed $510 billion in 2023, with about 91% of users purchasing online using their smartphones.
CPG brands need to ensure that their websites and online stores are optimized for mobile devices to provide a seamless shopping experience for consumers and stay competitive in front of online retailers.
For mobile optimization, businesses need care for website speed, user interface design, and mobile-friendly payment options. CPG brands can also benefit from mobile technology to offer unique shopping experiences, such as augmented reality (AR) and virtual reality (VR) product demonstrations.
The Influence of Social Media on CPG Ecommerce
Social media is an essential part of the modern consumer’s shopping experience. According to Forbes.com, 49% of consumers use social media and influencers’ product recommendations before purchasing. CPG brands need to leverage online channels and social media platforms to reach consumers where they spend their time online.
One way CPG brands can benefit from the power of social media is through influencer marketing. By partnering with social media influencers, Consumer Packaged Goods brands can reach a wider audience and tap into the influence of trusted individuals.
Influencer marketing involves many forms and strategies like sponsored posts, product reviews, and brand ambassadorship, to name a few.
Subscription Models in CPG Ecommerce
Subscription models are a popular option in CPG ecommerce. Subscription-based services help CPG brands build customer loyalty and ensure steady revenue.
The subscription model offers multiple options to market your products or services while creating a stronger relationship with your customers by providing a monthly or quarterly product delivery, personalized product recommendations, and exclusive access to promotions and events.
A remarkable example of a successful subscription-based CPG brand is Dollar Shave Club. The company offers a subscription service for razors and other grooming products, with customers receiving monthly deliveries of products tailored to their needs.
The subscription model has helped Dollar Shave Club build brand recognition and achieve rapid growth since its launch in 2011. The food and beverage industry has relied on this model too, due to the short shelf life of some everyday products they offer.
Importance of Customer Reviews in CPG Ecommerce
Customer reviews are a critical factor in the modern consumer’s decision- making process. About 93% of consumers read online reviews for local businesses before purchasing.
CPG brands must encourage and respond to customer reviews to build trust and credibility.
A CPG brand has several alternatives to encourage customers to provide valuable reviews. Some popular tactics include offering incentives in exchange, displaying reviews prominently on product pages, and responding to positive and negative reviews to increase brand loyalty.
A CPG brand can also use customer reviews to improve products and services by gathering consumer feedback and insights.
Future Predictions for CPG Ecommerce
As you know, the world of ecommerce is in constant evolution. And while no one can have complete certainty of the years to come, based on the current trends we can make the following predictions.
Increased Focus on Sustainability
Consumers demand sustainability. They are becoming more conscious of the environmental impact of the CPG industry. To remain relevant, they must respond and adapt by using eco-friendly packaging, offering sustainable products, and reducing carbon emissions in the supply chain.
Continued Growth of Mobile Commerce
Mobile commerce will continue to grow in popularity as more consumers use their mobile devices to shop online, browse and research to find the best shopping alternatives for their budgets and preferences. CPG companies must optimize and offer unique mobile experiences to stay competitive and relevant in the CPG industry.
Rise of Social Commerce
Social commerce, or the ability to buy products directly through social media platforms, will become more prevalent in the CPG industry and online sales.
CPG brands must leverage social commerce and digital marketing to reach the average consumer.
Why Ecommerce For the CPG Industry?
For a start, the CPG industry can help reduce distribution costs while improving customer engagement and revenue. Another added value for companies is that ecommerce helps gather valuable customer data about consumer behavior and market trends to help optimize product offerings and marketing strategies to develop strong brand recognition through digital channels.
Adapting to the latest trends in ecommerce CPG brands can unlock new opportunities to provide an enhanced customer experience for online shoppers and drive growth and revenue to position in the CPG market.
What Are the Challenges of the CPG Industry?
The challenges for CPG manufacturers are numerous, including profit margins, consumer preferences, completion, supply chain disruptions, industry pressure, and the need to grow a strong digital presence to adapt to the evolving sector.
Other challenges include optimizing their cost of production to adapt to their new reality, investing in the optimization of their logistics and distribution channels, and crafting marketing strategies to fulfill the demands of different consumer segments.
Are CPG Companies Profitable?
The game is all about evolution and adaptation. Though the CPG market has traditionally sustained high-profit margins, the sector is not immune to financial challenges and struggles.
The rising competition, profit margins, and the pressure to adapt to newer technologies and distribution channels can have direct consequences on the profitability of CPG products.
Considering all the factors that have influenced the sector and the future trends, CPG companies that adapt to the latest trends will maintain their overall profitability in the years to come.
The Bottom Line
The world of CPG ecommerce is a living and evolving ecosystem where CPG brands must stay up-to-date with and in tune with the practices of the most successful companies to remain relevant and competitive.
Brick-and-mortar stores and ecommerce stores must listen and respond to consumer demand and implement personalized experiences, optimize for mobile devices, and embrace technologies like voice search to stay ahead of the curve and provide a seamless shopping experience for consumers.
With the future predictions of increased focus on sustainability and continuous growth of mobile ecommerce, the CPG brands need to invest heavily in innovating, optimizing, and adapting to the changing landscape of ecommerce to succeed in the long run.