Online grocery shopping has gained immense popularity in recent years, with many people preferring to do their weekly errands and stock-ups through e-retailers, marketplaces, or even social media. This year, the global grocery delivery market is projected to reach over $782 billion in revenue. In the next five years, it’s anticipated to exhibit a strong compound annual growth rate (CAGR) of 12.03%, leading to a total market volume of $1,381 billion by 2029.
So, what does all of this transformation of the digital grocery shelf mean for consumer packaged goods (CPG)?
CPG brands are increasingly leveraging omnichannel marketing to enhance their digital grocery business. An effective omnichannel strategy allows consumers to switch between channels effortlessly, whether they are browsing products on a supermarket's website, adding items to their cart via a grocery app, or discovering new products through social media. This seamless integration enhances the shopping experience and builds customer loyalty.
Let’s explore the various ways CPG brands can boost their business through multichannel engagement, while also addressing the challenges they face in getting their data to all the required parties.
How CPG brands can boost their online business
Leveraging every type of ecommerce channel
CPG brands have a multitude of channels to choose from to make their products available online, each offering unique advantages:
Retailer websites: Partnering with retailers like Walmart and Target allows CPG brands to leverage established ecommerce infrastructures. For instance, Unilever partners with Walmart to ensure its products are prominently featured on Walmart's website, benefiting from Walmart's vast online traffic and logistical capabilities. Walmart.com alone receives over 37 million customers daily.
Social media: Platforms like Instagram, Facebook, and TikTok enable brands to reach a wide audience with targeted ads and influencer collaborations. Ad spending within the social media advertising market is projected to reach over $219 billion in 2024.
- Check out our social commerce guides for Meta and TikTok to learn best practices for advertising and selling across these networks.
Online marketplaces: Platforms like Amazon, Walmart, and Instacart provide brands with vast customer bases and logistical support. Amazon Fresh, a subsidiary of Amazon, offers a comprehensive grocery shopping experience. Brands that partner with Amazon Fresh benefit from Amazon's extensive logistics network and its Prime customer base.
- Learn more about Productsup’s direct integrations with marketplaces like Bol.com, Otto, and Kaufland.
- Use our Amazon Prime Day checklist to gear up for the marketplace’s biggest sales event of the year.
Mobile apps: Branded apps can offer exclusive deals, loyalty programs, and personalized offerings. For example, the Kroger app provides tailored product suggestions and reward programs, enhancing customer loyalty and driving repeat purchases.
Expanding reach through other modes of digital grocery shopping
In addition to standard ecommerce channels, the grocery industry has other various models and platforms that help bring more CPG products to consumers, such as:
Direct-to-consumer (DTC) platforms: DTC ecommerce sales in the US are expected to reach $212 billion by 2024, highlighting the growing importance of this type of channel. Brands like Nestlé and PepsiCo have launched their own ecommerce sites, allowing them to sell directly to consumers without intermediaries. For example, PepsiCo’s Snacks.com and PantryShop.com were launched to meet the surge in online grocery shopping during the pandemic. These platforms allow consumers to purchase a wide range of snacks and pantry items from PepsiCo directly, ensuring a seamless shopping experience and engaged interaction with the brand.
Grocery delivery services: Companies like Delivery Hero and DoorDash offer delivery services to people’s homes, places of work, or any other desired location, providing CPG brands with another channel to reach consumers. This model allows brands to tap into a dedicated customer base looking for convenience and quality.
Subscription services: Meal kit services like Blue Apron and HelloFresh partner with CPG brands to include their products in meal kits, offering a recurring revenue stream. With these services, it’s important brands deliver a consistent presence, even if consumers come across their products indirectly.
Personalizing consumer experiences
Personalization is key to enhancing the online shopping experience. Today, 77% of ecommerce shoppers choose to shop with brands and platforms that provide personalized shopping experiences. CPG brands are utilizing data-driven insights to deliver personalized product content, recommendations, and offers.
Procter & Gamble has integrated its product assortment into the digital shopping experience by focusing on detailed and appealing product descriptions. For instance, P&G's skincare brand, Olay, offers a personalized skincare quiz on its website that recommends products based on individual skin types and concerns, resulting in a more engaging and relevant shopping experience.
Here is an example of a detailed product description from P&G's fabric care brand, Ariel.
How Productsup Retail PX helps CPG brands overcome digital hurdles
Despite the opportunities, CPG brands face several challenges in managing their product data across channels within the vast digital grocery space. The top three hurdles are:
Managing data from multiple sources: Sourcing data from multiple locations is complex and leads to data fragmentation. Brands often struggle to integrate disparate data sets, which hinders their ability to gain a comprehensive view of their operations and customer behaviors.
Maintaining consistent and accurate product information across various platforms: Inaccurate or outdated product data can lead to customer dissatisfaction, increased returns, and damage to brand reputation. Ensuring that all product information is uniform and up-to-date across multiple digital touchpoints requires robust data management solutions and processes.
Adapting to rapid market changes: The digital grocery market is highly dynamic, with consumer preferences and market conditions evolving quickly. Brands must be agile and innovative to keep up with these changes, requiring them to continuously update their strategies, product offerings, and marketing approaches. Failure to adapt can result in lost market share and reduced competitiveness.
The power of Retail PX for CPG
Productsup’s Retail PX, as part of its holistic Product-to-Consumer (P2C) platform, offers a comprehensive solution to all three challenges listed above. CPG brands can gain more control over their product data to benefit in the following ways:
1. Data integration: Retail PX's data integration capabilities enable brands to seamlessly collect, process, and manage data from various channels, ensuring consistency and accuracy. It simplifies data management and reduces the complexity of managing multiple data sources to improve operational efficiency.
2. Product content syndication: Retail PX offers advanced product content syndication, which updates product information automatically across all channels, ensuring consistency. This helps brands maintain accurate and up-to-date product information, which is crucial for building consumer trust and driving sales.
3. GDSN access: Brands can avoid manual data entry, errors, and delays with Retail PX to automatically upload, maintain, and share high-quality product content to GDSN, ensuring partners have instant access.
4. Market adaptability: The platform's agility enables brands to adapt to market changes and consumer demands quickly. This is essential for keeping up with the fast-paced digital grocery market and meeting evolving consumer expectations.
5. Enhanced analytics: Retail PX offers advanced analytics tools that provide detailed insights into consumer behavior, sales trends, and market performance. These insights enable brands to make data-driven decisions, optimize their marketing strategies, and improve overall performance.
A prime example of how Retail PX can drive success for CPG brands is through Productsup’s collaboration with Red Bull. Red Bull leverages Productsup's Retail PX to streamline its product content syndication, ensuring consistent and high-quality product information across all digital channels. This collaboration has not only improved Red Bull's digital presence but also enhanced its overall consumer engagement and sales performance. Since working with Productsup, Red Bull saw a 15% increase in online sales and a 20% improvement in data accuracy across its digital platforms.
The digital grocery landscape offers immense opportunities for CPG brands to boost their business through omnichannel marketing. Solutions like Retail PX provide the necessary support to overcome these challenges, enabling CPG brands to thrive in the digital era.
Want to see Retail PX in action? Book a demo
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Or, check out some of our other resources specific to the CPG space:
- [Guide] Overcome data challenges in CPG
- [Blog] 5 consumer trends that are transforming CPG in 2024
- [Training course] Is Retail PX the right product for your business?