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CPG Brands Can't Approach Ecommerce Like Every Other Brand

January 12, 2017 | Retail & Ecommerce


Jennifer Silverberg
CEO
SmartCommerce

Many shoppers are loyal to their favorite consumer packaged goods (CPG) products, but their journey with these brands often begins with an in-store impulse purchase. For this reason, CPG brands are faced with different challenges in the ecommerce space than other product categories. Jennifer Silverberg, CEO of CPG ecommerce technology suite SmartCommerce, spoke with eMarketer’s Tricia Carr about what CPG brands can do to convert new and existing customers online.

eMarketer: Where do CPG brands stand in the ecommerce arena?

Jennifer Silverberg: In the past couple of years, consumers began using ecommerce for convenience more than anything else. This is where CPG brands can shine. Their position is unique because their products are convenience-driven. Consumers might not care that something is more expensive, but if they can order it online and they don’t have to go to the store, they will.

eMarketer: What challenges has ecommerce brought about for CPG brands?

Silverberg: CPG products aren’t high-priced. They’re more likely to be impulse items and less likely to be considered. They’re also more likely to become habitual items. There are different challenges in this category, because if consumers are not going to the store and walking past other brands, it’s hard to break an ingrained habit. A habit is more valuable now because people buy that same product online. It’s harder to get the first trial.

“A habit is more valuable now because people buy that same product online.”

eMarketer: How has ecommerce changed the notion of the impulse buy?

Silverberg: There are two forms of impulse buys. One is the pure impulse buy, which are the things you see on the shelf and purchase, like gum, candy or flowers. It’s a suggestive sell and theoretically, it has to be in sight. CPG companies have been dealing with the issue of shoppers being distracted with their smartphones for the last 4 feet of their shopping trip and not picking up as many products. Now they have the challenge of becoming a habitual purchase online.

The second form is the impulse to try something new. The difference between the physical shopping cart and the online cart is that in the store, shoppers walk down the aisle, see a product at arm’s length, it’s $2 and they choose to buy it. There is a very low barrier. To replicate that online, CPG companies have to make it easier to get a product into the cart and hit shoppers at exactly the right moment.

eMarketer: How can CPG brands make it more natural for consumers to make impulse purchases online?

Silverberg: We all learned the product life cycle: First you get to trial, then habit, then brand loyalty. All of these things can happen in one fell swoop online, or they can be separate. How are you as a CPG brand making the buying decision as frictionless as possible? Brands must do the same thing they’ve always done—intrigue and seduce consumers into being interested in a product—but provide closure by giving them an easy path to buy the product in the moment.

“Brand marketers have the habit of thinking it’s wrong to focus on the conversion, but that’s untrue online.”

eMarketer: Do CPG brands often put hurdles between the intent and purchase stages?

Silverberg: A lot of CPG marketers use branding ads to create a feeling or general intent about a brand, and they’re putting those ads online. There’s a disconnect, because if you get someone interested in a product and they could be one click away from putting it in their cart, why wouldn’t an ad do that? Brand marketers have the habit of thinking it’s wrong to focus on the conversion, but that’s untrue online.

eMarketer: Are there any phases of the customer journey that CPG brands tend to overlook in the ecommerce experience?

Silverberg: The packaging of a product plays an important role. Instead of thinking about how a product looks on the store shelf, CPG companies have to think about how it looks on the shelf in the home. What product will get used first? Which will get used the most? Which will be reordered first? Marketers don’t typically think about packaging as part of ecommerce, but it’s hugely valuable. The product becomes a brand’s own billboard inside the home.

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