Why Now is the Time for Niche CPG Brands to Build a Stronger Ecommerce Presence

Despite all the hype about eCommerce giants like Amazon, Jet.com, and numerous grocery delivery services, the fact is that the vast majority of CPG products are still purchased in brick and mortar stores.

But ecommerce sales of these items are steadily increasing - in fact online sales grew by 35% in 2018 alone. 

And online growth accounts for the majority of CPG sales overall (at over 60%). The giants in the industry (P&G, Coca-Cola, etc.) have built up large, sophisticated teams to handle eCommerce sales.

But there is a lot of room for newcomers. 

For one thing, even though we're drowning in data, we still don't actually have a great understanding of what works best in online sales. There are technologies that could revolutionize ecommerce that haven't even been invented yet.

Compare this with brick and mortar retail which has slowly, gradually evolved to serve customers over centuries. Simple developments like price tags, cash registers, and standard grocery packaging developed and caught on slowly over hundreds of years.

So there's no need to feel drastically behind, even if your CPG brand is... well, a bit behind on the ecommerce train. 

Secondly, the CPG giants are focusing a lot of 3rd party platforms: liaising with Amazon, Walmart, Costco other major online retailers. But they're not necessarily building their own ecommerce brands.

What razor brand do you use? Let's say you're one of the millions who use Gillette or Schick. Have you ever been to either company's website to inform your purchase? And have you ever thought to actually order your razor directly from Gillette? Or your LaCroix from LaCroix.com or L'Oreal from Loreal.com? If you're in the vast majority of customers, you're interacting with these brands through ads... and picking up the product from the closest CVS.

TV ads are monopolized by the giants. Magazine advertising is monopolized by the giants. They have huge PR and social media budgets.

But there is a huge gap of effort that gives a huge advantage to small, growing CPG brands right now. To do both online marketing for in-person sales, and online sales. The tools at your disposal to do this:

Email marketing

The giants may be pumping out promo emails, but most of them are quite frankly lacking soul.

Social Media

We're all getting targeted by DTC brands, and there's huge room for success here. However, prices and CPM costs are going up quite quickly. I don't think social media marketing is necessarily the way to go for every brand - it's something each company needs to evaluate. 

PR

Five to ten years ago there was a golden age of blogging and that's where the product placement goldmines were. 

But in an age of influencer marketing things in blogging are a bit more murky and the focus has shifted to Instagram.

There's no need to despair though. 

Consider a all the PR placements available, and then narrow down to the platforms that truly align with your core brand. Unless you're budgeting for a lot of PR hours, you need to laser-focus your pitch efforts on the magazines and blogs that your most ideal customers are loyal most to. 

Building out your website

It's not enough to own a domain. You have to put in not only time and money, but really strategy into your online business. Will you focus on building SEO? Will you focus on bringing in traffic from podcasts? Where will you generate that traffic, and what will you do with it? And if you're thinking your just going to sell on Amazon or Etsy, think again. It may work fine today, but you're at the mercy of those algorithms. Those policies. To borrow the famous saying about planting trees: the best time to build your own online presence was 10 years ago. The second best time is today.

- Better homepage copy

A lot of consultants are saying homepages are irrelevant because Google searches will take your customers straight to a product page. But how likely are you to have your product pop-up on the first page of Google results? If you are, that's fantastic. But for the rest of us, it will take time to build that SEO. 

In the meantime, you'll be getting a lot of referral traffic - people typing in your company name. And for those new prospective customers, the homepage design and messaging is absolutely critical.

- A better shopping platform

If you're limping along on a shopping platform that doesn't work smoothly, it's time to update. There are plenty of accessible user-friendly options like Shopify and BigCommerce. You're going to want to have a good infrastructure in place when you start getting additional traffic.

- Better product descriptions

Take a look at your product descriptions, and if you could picture those descriptions on anyone else's site, then you need to re-write them. Your descriptions and product page copy should be just as much in your voice as anything else that comes from your brand. 

Finally, know that there is room in every segment of the CPG space.

This chart from Marketing Insights shows the biggest categories in CPG sales for 2018. Two takeaways: 1) there's opportunity for new brands in the top categories because consumers have shown they're ready to buy those items online. and 2) there's opportunities for new brands to break into new CPG categories and become first-of-their-kind ecommerce leaders. Basically, no matter where you fall on the popularity spectrum, there's opportunity for you!

Note: statistics drawn from Digital Commerce 360 study.

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