As the CEO of SmartCommerce, Jennifer Silverberg works with an international team to help major CPG companies like P&G, Unilever and Nestle own and drive their customers’ online buying experience. Jennifer has more than 25 years of experience working with major CPG and other brands in senior marketing and leadership positions in companies ranging from startup to Fortune 50.
It’s remarkable when you think about the evolution of the internet over the past quarter century. We’ve gone from the information superhighway to the dot-com boom to web 2.0 to where we are today. The current online landscape is a place that not only blurs — but erases — the lines between the physical world and the digital landscape. For products like consumer packaged goods, which are seeing online sales skyrocket in this brave new world, marketers have to rethink what they know.
Most of the strategies marketers have developed around selling products online are based upon offering an enhanced version of what works in the physical world, like replacing salespeople with online engagement and word of mouth with social media mentions. But this is new territory and requires new thinking — thinking specific to CPG. Many brands are stuck using techniques that were never designed for the CPG category, and they aren’t finding the success they want.
But don’t worry. Success selling CPGs online doesn’t have to be hard. It’s just a matter of knowing how. Forget what you think you know about online sales and adopt these five keys to driving CPG sales online.
1. Leave engagement in the dust
Consumers looking at large purchases need to be sure before they pull the trigger, and engagement helps them feel comfortable. But nobody needs to be sure before trying a new shampoo brand or can of soup. It’s a low risk purchase, and engagement stands in the way. The most important step in online CPG sales is carting, the action consumers take to load an item into their online shopping carts. Imagine if a clerk in the grocery store wouldn’t let you put an item in your cart until you filled out a survey or subscribed to a newsletter. You’d walk away, and that’s exactly what online engagement does, too.
2. Beeline your customers to online carts
Never forget this statistic: Every click a customer must make to purchase a CPG online causes 80% of them to abandon the process. SmartCommerce knows this from monitoring over 10 million consumer interactions. That means that anything more than a single click from first interest to carting is absolutely killing sales. Direct paths to purchase from all online marketing campaigns are the online equivalent of tossing an item into a shopping cart the moment a display catches your attention. It’s how to capitalize on the impulse buying behavior that is key to CPG sales.
3. Convenience is CPG currency
CPGs are low-risk purchases because they are also low cost. In this world, convenience is the best coupon. Winners like Dollar Shave Club (name notwithstanding) have succeeded because they nail convenience, not because they offer a discount. Evidence: Even in an environment where it’s extremely simple to compare CPG prices, less than 2% of CPG shoppers even bother. They’re much more concerned with getting their items quickly than saving a few cents. Price sensitivity is low while friction sensitivity is your biggest roadblock.
4. Reducing choice increases clicks
It seems counterintuitive, but consumers buy more CPG items when presented with fewer options. That applies to everything from package size, flavor, fragrance, etc. We learned from observing millions of purchase decisions that limiting options to three or fewer quadruples the number of items added to carts. Offering more than four choices confuses shoppers and they just give up. If you really want to streamline things, offer a single option in your digital ad. That drives sales by a factor of 13 times over asking shoppers to make a choice.
5. Don’t try to change me
The biggest mistake CPG brands can make is trying to change online consumer behavior to fit online sales models. This can’t work. Consumers want immediate gratification with no obstacles and will not settle for anything less. Once you understand how these attitudes impact online shopping behaviors, you are empowered to amplify them -- which is far more effective than resisting them!
More consumers are purchasing CPG products online than ever before. That velocity is unlikely to slow down any time soon. The brands best suited to capitalize on this migration are the ones that relentlessly give consumers more of what consumers want, rather than asking them to do what brands want.