Table of contents
According to a recent study by Profitero and Kantar Consulting, 76% of brands are looking to accelerate their e-commerce investments in 2019. This environment of heightened competition has given rise to an urgent need for assorted differentiation strategies that can create a successful return on investment.
Look Internally
To be successful in the digital channel, CPG brands need to look internally at how organizations are set up and the collective skill of their labor forces. Even if the greatest e-commerce growth strategies are considered, not addressing these critical internal variables will result in throttled performance. In an analog retail world that is slower, organizations can be set up with siloed business functions and survive. With e-commerce, a lack of speed kills, so teams must have seamless collaboration across functions.
Until recently, CPG brands typically left e-commerce teams under-resourced with existing staff. This proved to be no longer sustainable, and investments are now being funneled into adding dedicated specialists to accelerate online growth. Not only do your e-commerce teams need to be organized for success, they need to have the right mix of analytical skills and a culture of continuous testing that is required to execute winning online strategies. This need for the “right” mix of people has many CPG brands increasing e-commerce head counts yearly at a staggering pace.
Alternatively, if you are struggling to keep up with adding enough e-commerce resources internally, an increasingly popular strategy is to lean on digital agencies to fill gaps in the short term. Though it’s not ideal, it does help keep up with the aspects of the digital shelf that need to be managed in real-time.
Functional Packaging
The CPG industry is currently dealing with a significant transition away from a world in which packages primarily sit on physical store shelves waiting to entice potential buyers to one in which packages sit on warehouse shelves waiting to be picked, packed, and shipped to customers. Though this new reality provides inherent challenges, embracing the opportunities that come from overcoming those challenges can unlock an immense amount of diverse benefits. These opportunities include increasing brand equity by re-designing packages to be more sustainable and increasing profitability long-term by optimizing functionality.
One of the most lauded recent examples of a CPG brand tackling the e-commerce packaging challenge and unlocking benefits is the new Tide Eco-Box. Not only does the Tide Eco-Box serve as its own shipping container, but it uses 60 percent less plastic than the comparable bottle version that is on physical retail shelves. Additionally, the new box is four pounds lighter because of a 30% decrease in water volume that makes the product more concentrated, so as not to sacrifice the total available uses in each container.
Optimize the Digital Shelf
One of the biggest challenges with the digital shelf is overcoming its boundless assortment. On a physical shelf, you might be competing with a dozen or two substitutes. Alternatively, on the digital shelf, the number of competing products could be in the hundreds or even thousands. Though there is no denying the proliferation of digitally-native startup brands online, a CPG brand’s main focus should instead be on optimizing listings for search. According to CPC Strategy’s 2018 Amazon Shopper Behavior Study, 70 percent of shoppers never click past the first page of search results on Amazon. Moreover, the top three search results receive 64 percent of the clicks.
Those statistics highlight the importance of optimizing your product listings for search visibility on retailer websites. Search visibility means that when consumers search for keywords related to your product, your products appear as close to the top of the search results as possible.
To be effective, start by compiling a list of relevant keywords you want your products to rank for. These should include both broad and specific terms, as well as branded and unbranded keywords, and they must be relevant to the products. Next, optimize your product page content to include these keywords. You should make sure to incorporate these terms in a natural way, as “keyword stuffing” can negatively impact a customer’s experience.
Once you’ve initially optimized your listings, make sure to monitor your products’ rankings for target keywords across various retailer websites to see how your efforts impacted your search visibility. This process should be viewed with the goal of continuous improvement and not a static, “set it and forget” mentality.
If you’ve increased your search visibility, you should be getting more “at-bats” in the game (i.e. page views), but you won’t hit as many home runs ( i.e. sales) unless you also optimize for conversion. Once a customer has found your product via site search, the content on the product page allows them to research the item and determine if it is a good fit for them.
First and foremost, this content must be accurate, and it should provide everything the customer needs to know. Take advantage of all of the available content options, including photos, titles, bullet points, descriptions, and enhanced content. Expand on the information on the product packaging, further demonstrating how the product will benefit the customer. Use this opportunity to answer any common questions or concerns consumers have, as well as to explain how the product compares to its competitors.
Turn Up the Microphone
To reach the pinnacle of e-commerce success, it is critical to drive as much traffic to your product listings as possible. The more traffic you can drive, the more opportunities you have to convert shoppers into a purchase. If organic search optimization isn’t giving your CPG brand enough page views, it might be time to look into other digital marketing strategies, whether natively through the retailer’s platform or through various outside sources.
Here are the best native options to consider:
- Amazon’s advertising platform: Amazon has consolidated its various advertising products into a singular platform called Amazon DSP. A recent study showed that Amazon is the most used advertising platform.
- Walmart Media Group: Depending on your product category, Walmart could be a major advertising focus for you due to its growth in e-commerce grocery and click-and-collect. It was just recently announced that the retailer will be rolling out new initiatives to boost ad performance and targeting on its website.
Here are the best outside traffic sources to consider:
- Social media marketing: Of the roughly 4.2 billion internet users globally, 80 percent are active users of social media platforms. The biggest platforms are Facebook and YouTube. To increase traffic to your product listings, consider using their advertising platforms to attract potential customers.
- Influencer marketing: As marketing moves closer to 1:1, influencer marketing becomes extremely important to consider. Since you get both outsourced creative and increased distribution benefits, influencer marketing is an area that can provide immense benefits to any CPG brand, including driving traffic to product listing pages.
Targeted Products
One of the most common mistakes CPG brands make is that they believe physical retail success can be directly and easily translated into online success. This misunderstanding leads to brands selling the exact same pack sizes and product configurations online as they do offline. A re-examination of your offerings from all angles is a key strategy to consider for maximum success through the digital channel.
First, it’s important to consider your product’s current pack size. By increasing the pack size, you could create a better per-unit price that offsets the extra layers of cost associated with e-commerce logistics. According to Nielsen’s June 2018 Total Consumer Report, consumers have a tendency to purchase FMCG products in bulk online, which has likely driven the 7.3% growth YOY in units purchased per trip (the highest of any channel), while dollars spent per trip have fractionally contracted.
Just as you can create larger pack sizes, you can also create bundles to help spread shipping costs. These could be multipacks of the same product, complementary product sets, or variety packs of different flavors or other variants. These “digitally exclusive” items also help mitigate any risk of those products being price-matched across other retail channels and causing profitability challenges with certain internet retailers.
