Monday, May 5, 2014

Package Goods Marketers - Go Digital or Perish

Although e-commerce is no longer a new word and it has greatly changed people’s shopping behaviors, consumer packaged goods manufacturers and retailers may have underestimate the market opportunities there. As a graduate student in Medill’s Integrated Marketing Communication program, with concentration on marketing analytics, I have been looking at potential opportunities and future trends for consumer packaged goods companies. Recently I found 2 informative articles on digital commerce opportunities for consumer packaged goods companies. 

In the article Digital Commerce Remains a Largely Untapped Opportunity for Consumer Packaged Goods Companies, Deloitte talks about its two surveys on CPG industry executives and senior managers as well as on consumers. The results show that consumer’s intent to purchase these products online far outpaced executives’ expectations and CPG companies are obviously not well prepared. Moreover, surprisingly, only 43 percent of CPG executives think their company has a clear, well-understood digital commerce strategy. Pat Conroy, vice chairman, Deloitte LLP and consumer products sector leader, concludes that CPG companies are not well prepared enough for consumers’ changing behavior and data suggests that they should develop a more comprehensive strategy in order to take full advantage of this growing opportunity. 





In the article E-Commerce: It’s an Evolution, Not a Revolution, Nielsen also mentions that although E-commerce enables CPG manufacturers and retailers to engage shoppers in more ways and create more values for shoppers through online models CPG manufacturers and retailers have not capitalized such opportunities as well as other categories. The article points out that consumer engagement is greatly increased because much more touch points, such as websites, emails are social media, are available for online shoppers. Therefore, it is important for CPG manufacturers and retailers to understand what these shoppers are looking for in order to create more value to them and build stronger relationships with them.


Based on the reviews of these two articles and my knowledge and experience, there are three principles CMOs of CPG companies may apply in order to help their companies succeed in the evolving digital commerce world.

1. Create a Digital Commerce Strategy - Be prepared for the evolution and develop comprehensive digital strategy for digital commerce. The first step for companies is to create a clear and well-rounded digital commerce strategy. 

2. Understand the Potential Online Shoppers - It is crucial for CPG companies to understand what benefits online shoppers are looking for and what added value they can provide for shoppers.

3. Increase Engagement and Create Values for Long-term Relationship - E-commerce make it possible to reach consumers almost any time. Marketers can leverage on that to improve brand awareness, drive product initial purchase, increase repeat purchase and reconnect with lapsed consumers.

Digital commerce provides CPG retailers and manufacturers more opportunities to directly communicate with customers, which means that marketers are now able to influence off-line decisions as well. Digital commerce no doubt has its unique benefits and as technology develops it will only becomes more and more important. Therefore, by developing a more sophisticated digital strategy based on understanding potential customer behavior, CPG marketers can maintain long-term stronger customer relationship and in the end take advantage of the opportunity.



Happy Chen is pursuing her master degree in Integrated Marketing Communications at Northwestern University, with a focus on marketing analytics and digital analytics. With previous working experience in consumer packaged goods industry, she is also a number lover, Excel junkie and SAS programmer. Questions or Comments?  Contact me on LinkedIn or Twitter @Happy_CHP .

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