A generation ago it was “I Want My MTV”, but today’s CPG consumers–grocery shoppers to be exact–are asking “I Want My MBB – My Mobile Buy Button”.
We know from the various MaxCo Advisors Mobile Studies coupled with insights from other work we have conducted that while shoppers have been using their personal mobile devices to research products (and buy online for home delivery) the gap between looking and purchasing is still gaping in CPG compared to other categories.
Brands continue to build attractive and very functional websites as well as utilize all forms of social media to market their products, and engage consumer loyalty, but the ease and convenience of actually buying seems to be missing.
On many brand sites there simply is no “buy” button. Understandably individual brands cannot deal with issues of packaging and shipping (or do not want to invest in such infrastructure). Where the option does exist, the additional costs of premium price, shipping, waiting, and the total lack of sensory satisfaction issues – the need to see, touch and smell it – can impede online/mobile CPG shoppers from buying.
But the forecast is optimistic. According to a recent Nielsen report the CPG category has significant upside with online CPG sales expected to grow at a 25% compound annual rate for the next three years, to over $32 billion next year. Our own insights tell us that factors such as exclusivity, better prices and same-day delivery will significantly impact this success.
Nationally, brands have turned to local click-collect-and-deliver services such as Peapod Delivery in the North East and other fulfillment services such as Diapers.com to help with such issues. The relationship between these companies and CPG brands will be increasingly critical to drive the conversion of shoppers to buyers.
According to a recent study by etailing Solutions, actions such as sharing shopper-insights, offering cross-merchandising opportunities and giving consumers auto-replenishment and shopping list applications on their sites are ways click-and-deliver services can help brands increase sales. New product launches and exclusive product offerings would drive CPG online purchasing according to such etailers. Exclusive web-only product offerings would also elevate consumer purchase behavior.
Imagine web-only offers for new the “Colgate Super Ultra-Whitening Toothpaste”, or new “Oreo-Triple-Layered Supreme Cookies”. Not so crazy.
A little over a year ago, who would have thought that a simple touch on our smartphone screen would enable a complete stranger to appear in their very own sparkly-clean car in a matter of minutes, or even seconds, at anytime, anywhere, day or night, and give you a ride to where ever you want, without having to pay cash, or even tip them. Huh? Uber.
We’ve also seen this before with numerous web-only exclusives for other categories such as media – music, movies, games, books (Amazon), home improvement (Home Depot and Lowes), and electronics and entertainment (Best Buy), travel and leisure (Expedia, Kayak), etc. Why not toothpaste, cookies, detergent or CSDs?
You may want to think about how best to answer the following important issues for your own organization?
- Will brands’ stronger involvement in e-commerce initiatives be the catalyst for stronger online sales in the CPG category?
- What is the true clickable path to purchase for CPG?
- What opportunities can brands create for shoppers to begin and end their journey online?
- What are the benefits for brands that do take control of their own ecommerce?
- What CPG categories that make more sense in the ecommerce space, or should brands consider ecommerce a necessity for every category?
- Is this all better left to e-retailers?
MaxCo Advisors can help you develop relevant, actionable and implementable strategies that will help you move the buy button closer to where your consumer is.