E-commerce may be a single-digit sales percentage for most consumer packaged goods (CPG) categories, but that’s quickly changing. Technology incluences consumer behavior in the retail space as online, mobile, and in-store initiatives come together to provide a seamless, omni-channel shopping experience.
This week there were four interesting stories that point to further development in the online consumer goods marketplace. Manufactuers and retailers alike can work to get ahead of these trends by engaging their customers in deep, ongoing dialogue to unlock insights on what omni-channel means to specific consumers, and how they can best bring this to life to ensure a seamless customer experience.
- Amazon buyers like niche products; store purchasers go mainstream.
The top five sellers in manual toothbrushes and breakfast cereals are widely different at Amazon compared to store-based retail, according to the report, based on July 25 sales at Amazon and Nielsen data for the four weeks ended June 7. The niche Radius Totz and Dr. Collins Perio toothbrushes cracked the top 5 at Amazon, but Colgate and Procter & Gamble Co.’s Oral-B products dominated in stores. Bob’s Red Mill Gluten-Free Whole Grain Rolled Oats were the top seller on Amazon, while General Mills‘ Honey Nut Cheerios were the top seller in stores. – Jack Neff, Ad Age
- Target launches e-commerce service for moms.
Target Corp will launch a free service on Wednesday that lets shoppers set up recurring deliveries of bulky baby goods, a move that mimics Amazon.com Inc and is aimed at attracting more moms.
Target has a battle ahead since it is not the first to offer such delivery, and for now is only selling 150 items such as diapers, baby wipes and formulaÛ_
After shoppers told Target they wanted a recurring delivery service, the retailer decided to start with baby products since new mothers are an important group of customers for the retailer. It could expand into more categories, based on demand.
The U.S. birthrate has declined in recent years, intensifying competition among mass merchants such as Target, specialty shops led by Toys R Us Inc’s Babies R Us and Bed Bath & Beyond Inc’s buybuy BABY as well as websites including Amazon.com and its Diapers.com unit. – Jessica Wohl, Reuters
- E-commerce is big business for small players.
An even bigger digital disruption in packaged goods may be through e-commerce, still a relatively small business segment for big marketers but quite significant to many startups and niche players.
A Sanford C. Bernstein analysis last month found e-commerce accounts for 5% to 9% of sales for some packaged-goods categories and around 1% of sales for many and household products. Yet for some smaller alternative CPG players, such as Method and Seventh Generation, e-commerce accounts for 25% or more of sales, according to people familiar with the matter. Bernstein expects e-commerce in CPG to grow quickly, reaching 25% of category sales overall, or $222 billion within 10 years, as Amazon and others increase their focus on the business and roll out grocery delivery. – Jack Neff, Ad Age
- Consumers are planning to buy more holiday gifts online than at discount stores.
U.S. shoppers expect to spend 9.1 percent more on holiday gifts this year, with more consumers planning to buy gifts online than at discount stores for the first time ever, according to a survey from Deloitte LLP.
Shoppers foresee spending $421 on gifts this holiday season, New York-based Deloitte said, citing a survey of 5,018 consumers conducted Sept. 13 to Sept. 23, before the U.S. government shutdown. About 47 percent of consumers expect to make purchases online, while 44 percent plan to buy presents at discount stores. – Minsi Chung, Bloomberg