Leveraging ecommerce yields better results for marketing procurement

Abstract

1    Introduction

Ecommerce started off as a novel channel to reach consumers. It has now become a much sought after channel registering double digit growth rates consistently across markets and industries. A recent Forrester study estimates that US companies would double their investments in ecommerce by the end of this decade. Ecommerce has impacted the consumer packaged goods (CPG)  industry unlike any other innovation in recent times and has influenced operating models significantly. Today, CPG manufacturers are searching for newer ways to leverage the ecommerce revolution.

2    Main

Identifying the consumer, capturing the consumer behavior data and optimizing the planogram has been the traditional approach while dealing with brick-and-mortar retailers. Increased penetration of ecommerce has brought the opportunity of multi-channel presence of the consumer and this is throwing unexpected challenges to the marketer. It is forcing marketers to be omni-present, capture multi-channel consumer data and utilize them for devising new campaigns and customized communication targeted towards the desired consumer. Tracking shopper data through multiple channels, identifying consumer preferences and promoting products through digital channels has become inevitable for capturing a better market share in the ecommerce space.

3    Recommendation

CPG marketers who earlier considered ecommerce as an alternative are now moving to ecommerce-focused business models. They are leveraging ecommerce channels for optimizing their consumer reach. Use of novel approaches in merchandising, improved ways of sourcing data and insights, effective offline and online integration would help marketers get a higher share of the consumer spend.

Introduction

Today’s shoppers are increasingly inclined towards online purchases over buying from traditional retail stores owing to the convenience and the experience that the ecommerce channel offers in terms of options and offers.

Rising purchases on ecommerce channels has thrown newer challenges to CPG manufacturers in marketing their products.  Shoppers have choices to shop from retailer websites or brand websites or market places. The key challenges in the purchase process that marketers face today are:

• Identifying that a shopper is interested in a product and is inclined to buy it, based on her online behavior and purchase history
• Attracting a shopper by various online promotions and providing an opportunity for her to browse through the product page
• Helping the shopper buy through any of the channels desired by her without any hiccups

Leveraging Ecommerce:

Understand the evolving CPG – retail  environment:

CPG-retail collaboration has been working well since ages and is tranforming enormously owing to the increasing reliance of CPG companies on retailers and retailers’ positive receptivity to the technological advancements. Increased proliferation of digital devices has also paved the way for retailers and CPG marketers to increase their investments on the ecommerce channel. They have also started to improve their interaction with consumers through the digital channel. Aligning traditional retail strategies with digital marketing strategies would give umpteen advantages to marketers and their trade partners. Retailers have realized this and are collaborating with manufacturers to part in this digital revolution.

Track customer’s digital fingerprint:

Today’s technology has paved way to omni-present shopper who shops across multiple channels, and devices. Millenials are spending majority of their time on social media and leaving their digital fingerprints for the marketers to analyze. Data from social media, streaming from twitter, facebook, snapchat, google+, etc. is available through third-party data providers for marketers to track consumer interests and improve their brand equity and increase their sales.

Source Data & Insights:

Customer transaction data has been traditionally captured at the points of sales in retail stores to track the effectiveness of a promotional campaign. To understand the increasingly complex consumer behavior, retailers and manufacturers have began to track consumer transaction data and purchase behavior using loyalty cards. This data has been helping marketers in understanding the consumer behavior and in creating customized promotional campaigns for shoppers. Retailers in developed markets have partnered with third-party suppliers to capture and refine the data for use by the manufacturer. These partners provide manufacturers with customized consumer data that helps them to create campaigns based on those findings.

Usage of Advanced technologies:

With the advancements in technology, marketers can using novel approaches to market their products to the consumer. The key technologies that CPG marketers are adopting to entice their shoppers with their brands are

• internet of things
• usage of ibeacons
• mobile apps for brands
• digital signage solutions
• electronic shelf labels
• usage of QR codes
• leveraging near field communication (nfc)

Ecommerce merchandising:

Promotion has always played a key role in increasing the sales of a product. It has been done well traditionally through sampling and merchandising at retail stores. Increasing consumer purchases online has brought in the need for ecommerce merchandising. It is another key tactic employed by CPG marketers to attract the millenial shoppers.

Ecommerce merchandising involves site design, testing, personalization, navigation, faceted search, upsells/recommendations, deeper/broader site content etc. to

• monitor the product availability as planned
• increase the site productivity
• obtain the maximum product engagement
• improve the conversion rate
• increase sales per order

Advanced promotional tactics:

Even after digital revolution transformed consumer purchase patterns, consumers’ response to sales promotions have not seen a major shift. Advancements in technology and the increased performance of the digital campaigns have only altered the ways sales promotions are handled. Digital coupons, customized promotions and email blasts are ways in which shoppers can be reached effectively. 

Conclusion:

CPG marketers have begun to realize the true potential of ecommerce and are including promotions through the platform in their campaigns targeted towards online shoppers. Technological advancements and changing consumer behavior has made CPG marketers collaborate with retailers, service providers and technology providers alike to leverage the latest innovation that is brought by parties around the globe. CPG manufacturers should constantly monitor the result of these innovations by measuring the effectiveness of the campaigns to leverage the true essence of ecommerce.