E-commerce has long been the purview of retailers offering clothing, shoes and electronics – the Consumer Packaged Goods industry has never seemed to be able to gain a strong foothold in this arena – and that has been both a good and a bad thing for retailers. However, at the beginning of each year, analytics companies take the stage and offer up trends and numbers from the previous year, and this year’s numbers suggest that this may just be changing.
A recent AdvertisingAge article looked at one of these surveys, and found that CPG e-commerce sales soared last year – up 42% from 2014. This is a massive increase, and it signals a healthy move forwards where CPG e-commerce that was lacking in the past.
What has led to this increase? The study, done by 1010data, found that Amazon has been a leader here, especially with subscription items, and is leading the pack. Its Subscribe & Save automatic ordering system alone accounted for 20% of CPG e-commerce growth last year.
What goods are being purchased online? The fastest growing category was laundry detergent – sales were up 85%. Toothpaste came in a respectable second place, with sales up 75%. Other products, such as deodorant, health snack bars, baby wipes, protein powder and even bottled water also climbed.
So does this increase symbolize what many have claimed is coming for retail in the future: a total takeover by e-commerce? Probably not. According to the article, “E-commerce still accounts for only around 2% of grocery sales, per a recent Morgan Stanley report. But the report also projected accelerating growth this year, based on a survey that found 26% of U.S. consumers expect to buy groceries online this year, more than triple the 8% who said they did so last year.”
What this does signify is that retail is, and has been, changing. People are less hesitant to buy CPG items online compared to even just a few years ago. With several categories jumping as far as overall sales, clearly people are recognizing the convenience of online ordering and delivery for those items that are required on a regular basis. Sure, many food items remain the domain of physical locations, but when it comes to those health and beauty and household items, consumers are becoming more inclined to opt for a virtual shopping cart. This equals more competition and more savvy shoppers.
You can check out the article in full here: http://adage.com/article/ad-age-annual/cpg-e-commerce-sales-soared-42-year-driven-amazon-subscriptions/302405/?mod=djemlogistics.
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