A few weeks ago we took a look at a recent study done which examined the growth of e-commerce in the grocery sector. The results of this study were eye-opening, as e-commerce sales in the CPG sector have grown significantly over the last year (42% to be exact). With a higher percentage of retailers entering the online arena, this means even greater growth can be expected over the next few years. However, grocery channel e-commerce is proving slower growing than some initially envisioned, and there are a number of e-commerce challenges retailers need to overcome in order to be successful.
So what are those challenges? We found a great CPG Marketing Trends article that talks about the most common – check it out: http://www.cpgtrends.com/2014/09/cpg-e-commerce-challenges/.
These are some of the most common CPG e-commerce challenges according to the article:
- Shipping costs and logistics. Prior to online shopping, retailers only had to worry about product being shipped to the store. Customers carried their own purchases out, and once paid for, the retailer’s role in the transaction was complete. Now however, with e-commerce, a paid-for item also needs to be shipped. This costs money – and is often one that consumers will go out of their way to avoid. It also means figuring out the logistics – another time consuming task.
- Quality and freshness. When consumers shop in-store, especially for perishable food products, they can see for themselves what they are buying. Once these transactions move online, this is much harder to control, and retailers also need to take into consideration transportation impacts and time. What looks great on a webpage may not look the same after a long trip to someone’s front door.
- Challenges to customer loyalty. Outside of grocery, retailers are constantly dealing with a drop in customer loyalty because of e-commerce. The ability to research online for the best price means customers are less likely to spend more just to get a certain brand. This will become an ever increasing challenge for CPG as well, as customers will, when given the option, almost certainly shop around with less thought for brand loyalty.
So what are the solutions to these CPG industry e-commerce challenges? Tried, tested and true methods haven’t necessarily had the time to percolate real results just yet, but some companies are finding ways to deal. For example, when it comes to freshness and quality, consumers can take advantage of Amazon’s same day delivery which helps to decrease problems with perishable items. Other companies are trying to bring down shipping costs by offering free shipping after a certain amount spent. While this does have the adverse effect of decreasing overall profits, it does mean customers usually spend more, and thus overall shipping costs decrease.
These challenges also show that customers are still not ready to give up that shopping experience in-store, but that the competition is stiff and you always need to be on top of your game. If you’ve yet to conquer these grocery channel e-commerce challenges and thus rely almost completely on physical sales, great customer service, fully stocked shelves and ample people support can help you compete.
Storesupport has the resources that make this task easy. Contact us today by calling 1-877-421-5081.