Digital Is Worth the Growing Pains

Consumers are increasingly going online to shop or do research before shopping in-store. Hence, FMI and Nielsen predict that, within as little as five years, e-commerce will be a $100 billion industry.

At the Food Marketing Institute (FMI) Midwinter Executive Conference earlier this year, executives in retail discussed that the growth of digital is one of the primary challenges faced by grocery retailers today. With Amazon increasing the demand for online conveniences, retailers must compete through adopting innovations, like AI and data management systems, that may be totally new to them.

Albertsons, for example, is rolling out Albertsons Performance Media, which is a digital media platform powered by Quotient. The platform will give CPG brands access to proprietary shopper data in order to aid targeted ad campaigns. The technology also will allow brands to measure the performance of their ads through connecting ad views to shopper purchases.

Despite the challenges of digital, investing in this area is worth it.

Eric Reynolds, CMO of The Clorox Company, explained, “People say: ‘Why would you put many times more resources on e-commerce when it’s 5% of sales?’ Because we think it’s going to be a quarter of sales faster than people think.”

When strategizing e-commerce and digital marketing more broadly, brands should keep in mind a few best practices.

According to a report from Qubit, top performing techniques in e-commerce strategies include scarcity (highlighting low-stock products), social proof (pointing to popular items), and urgency (communicating a time limit to perform an action). Personalization also has significant revenue benefit.

Moreover, well-integrated campaigns (those that effectively connect elements such as creative materials, characters, logos, messaging, and platforms) are 31% more effective. Campaigns that are well-integrated and customized (tailored to specific platforms and ad formats) are 57% more effective.

As CPG brands insert themselves into the digital space, it is helpful to remember that there is payoff despite the growing pains, particularly for brands utilizing best practices.