Since the creation of the internet, people have had more and more access to more and more information. Knowing information is at our fingertips, one would think that people would be more, well, online, when it comes to online shopping, in all categories. According to CNBC, however, CPG eCommerce still has plenty of room to grow, with 11% of all CPG retail purchases being made online in 2018, a 35% increase compared to 2017. Ecommerce will continue to increase in share of CPG sales, with 64% of the vertical’s YoY growth across channels concentrated in online sales; this represents an interesting opportunity for brands and advertisers to streamline the online path to conversion, and capitalize on the multiple browsing and conversion touchpoints within the online path to purchase.
Impulse online shopping is also increasing, creating an opportunity for brands to drive conversions when a consumer’s impulse hits, since “about 1 in 3 (31%) Americans say they’ve made most of their impulse buys in the past three months using a computer, tablet or phone, compared to just 1 in 5 (19%) a year ago.”
Within the dynamic eCommerce landscape, it isn’t merely good business for advertisers to work toward capturing consumers’ propensity for a seamless shopping experience—it is a requirement of doing business. Gone are the days when advertising campaigns were the sole introduction of a brand or product; consumers today have endless platforms and touchpoints that meet their needs, and are more adept than ever at conducting research and comparisons. As a result, advertisers are tasked with staying up to date on consumer behavior and interests, correctly identifying and targeting their own customers, and creating comprehensive and quality online experiences to ensure the highest value opportunities that will be perceived as “too good to pass up.”
Presenting this value offering digitally can be tricky for CPG brands, as the vertical has historically performed strongest in brick and mortar environments, where the combination of visual brand resonance and physical product placement make for a quick and likely conversion opportunity. In an eCommerce environment, advertisers would be smart to boost purchases by using customer data to present relevant products within the site, and billing them as “basket builders”. Messaging such as “1 more purchase to get free delivery” offers the customer two opportunities in one conversion, the product and the service of free shipping. Additionally, services like “click and collect” on grocery platforms offer customers the opportunity to purchase CPG products online and pick up along with the rest of their groceries, a shopping experience that mirrors what might happen in a physical grocery store.
Knowing who you are targeting and in what context is key for capturing online shopping behavior; advertisers such as Bed Bath & Beyond use this to their advantage in creating shoppable images showing not just products necessary for a standard bedroom set, but decorative items that go along with it.
Another way advertisers can entice online shoppers is with limited-time promotions and offers, creating a fear of missing out. Digital Advisory site Quick Sprout emphasizes building a strategy that inspires urgency on the part of the consumer: “The concept of FOMO makes the consumer think, “If I don’t act now, I’ll lose out on this opportunity.” Making the offer too good to pass up, a consumer is more likely to make the purchase, even if they weren’t initially in the market for that product.
With the increase in online shopping behaviors across CPG products, it is even more important for retailers to keep in mind ways to make these purchases attractive, seamless and quick for the consumer. Quick Sprout also points out that “once someone decides to make an impulse purchase, you don’t want to give them any chance to change their mind.” This means adding easy checkout buttons and quick add to cart overlays on the product page so users don’t have to even load a new page to make a purchase or add a new item to their cart. The process of adding products to their cart and then purchasing should be simple and provide as little time as possible for the consumer to change their mind.
The eCommerce landscape has changed dramatically, with consumers looking more and more to purchase frequently replenished products online than ever before. According to Internet Retailer’s 2019 Online Consumer Packaged Goods Report, this change in consumer behavior is pushing CPG manufacturers to think creatively about how to expand their eCommerce presence, whether through forming partnerships with online retailers, developing their own digital direct-to-consumer channels, or investing in strategic acquisitions of younger, digitally native competitor brands. As younger Millennials and Generation-Z are joining the workforce and earning more purchasing power, brands will have to quickly adapt to these fast-paced digital-savvy consumers. There is no question that Amazon has been one of the most successful at implementing these practices. Its recent launch of an exclusive, affordable clothing collection designed by fashion influencers and bloggers has been a hit, generating revenue and online buzz. It’s available for only a 30-day window, creating an air of exclusivity around the item and encouraging prompt purchasing behavior.
Unlike traditional brick and mortar stores, online environments skip traditional shopping steps such as time pressure and interaction with sales associates, which often affect the final purchasing decision. Conversely, there are endless opportunities for online advertisers to increase the likelihood of conversion: incentives such as free shipping, exclusive promotions, and display advertising entice consumers to make swift purchases. The integration of shoppable ad units on a site like Instagram only reinforces the idea of a seamless, organic mobile shopping experience. To adapt and succeed in an ever-changing environment, it’s vital for brands to keep in mind that impulsive purchasing behavior, attachment to digital gadgets, and desire for exclusive items or deals are at the core of the modern online shopper, whose emotions–rather than logic–drive the majority of the conversions.
Author: Dariya Kizieieva, Analyst, Search Marketing, Digitas