COLORADO SPRINGS, Colo. – Following the consumer’s path to purchase is becoming more complicated. Digital technologies have given shoppers a plethora of options to research and decide what products to buy at retail. Consumer packaged goods (CPG) companies are rushing to keep pace, engage and ultimately influence the customer’s final decision.
Abigail Stark, senior manager of customer strategy and marketing for Deloitte Consulting LLP, said today’s consumers are arriving in stores far more focused, and shopping is becoming less impulse driven. But, Stark added, “digital opens the aperture for new impulses.”
Stark made her comments at the outset of an education session about how the digital ecosystem is changing and how CPG companies are going to market and that took place Aug. 17 during the Grocery Manufacturers Association’s annual Leadership Forum.
She cited Cargo as one example. Cargo is an in-car commerce platform for rideshare services such as Lyft or Uber. Launched in 2017, the business model allows drivers to earn additional income by selling snacks and other items to passengers. Earlier this year the Kellogg Co. through its eighteen94 venture capital fund and another investor invested $5.5 million in the new business.
“How we market our brands is getting much more targeted,” said Ellen Siebenborn-Forsyth, vice president of US grocery for General Mills Inc., Minneapolis. “It’s amazing how fast things are changing.”
She said CPG companies are getting more adept at using search optimization to reach consumers and are becoming “exponentially better” at targeting digital offers.
“That is a terrific start,” she said. “But we have a long way to go.”
Siebenborn-Forsyth added that in any given grocery store there are 40,000 stock-keeping units (SKUs), but any given household is buying 60. She emphasized how companies tailor their offers to the family for what they want, when they want it is critically important.
Sri Rajagopalan, vice president of e-commerce and digital sales for Johnson & Johnson, New Brunswick, New Jersey, urged attendees to not be obsessed with the size of their company’s e-commerce business.
“If you are in food and beverage, it is minute,” he said.
It’s more important for managers to understand where consumers go to learn about products, he added.
“Consumers still go to Amazon to search products,” he said. “There is something there that is not e-commerce.”
With that in mind, Rajagopalan said it is important for companies to understand their product detail pages and how each product is presented to the shopper.
“At (General) Mills, we are making sure all of our marketing is shoppable,” Siebenborn-Forsyth said. “When you are putting a shopping list together you don’t think about a brand of cereal; you think about what you need. Marketing messages need to fit in that vernacular.”
Rajagopalan said, “As a manufacturer, if you are not taking our CRM (customer relationship management) seriously, it’s a miss. Marketing is moving to being individualized, and the business model is shifting away from basket building to a business of units.”
While greater investment is required to learn and implement strategies to engage and convert the digital shopper, brick and mortar will remain relevant, said Siebenborn-Forsyth.
“In the near future, the majority of online digital purchases will run through traditional brick and mortar,” she said. “That is an important part of this. The decision tree is happening digitally, the basket building is happening digitally, but the execution, a lot of the time, is happening in store.”
She predicted that within five years, consumers will have “amazing shopping experiences very specific to them.”
“Retailers will drive incredible loyalty,” she said. “They will find a way to talk to them (consumers) and engage them. I think retail loyalty will go up as well as brand loyalty.”