CPG Transformation

Grocery Goes Digital

CPG Transformation

While online grocery will stabilize, it has already sped-up consumer adoption and changed habits.

While more convenient for consumers, this shift toward digital has created new challenges for CPG brands, as most are still relying exclusively on existing retail partners to fulfill this need for their consumers. Online grocery shopping, however, presents unique challenges for increasing consumer awareness and market penetration, given its search driven nature, and the inability of consumers to “digitally browse the aisles”. Digital shopping also tends toward reinforcement existing habits and discourages exploration through its focus on creating the most consumer friendly experience possible.

This has required brands to find new solutions to overcome these challenges, in large part because these frequent online shoppers typically represent the ‘Heavy Buyers’ that are valuable to retain a long-term relationship with. Increasingly, brands have looked to DTC solutions to build an ongoing relationship with consumers.

While these channels currently represent just a fraction of overall sales, they provide valuable insights into consumer behavior that are typically guarded by retailers.

In addition, they enable personalized experiences that build brand loyalty and increase long-term consumer value.

In addition to DTC, brands also continue to invest in recipe content as consumers cook more at home, both as a result of social restrictions as well as a way to save money and spend more time with family.

Nearly three-quarters of Allrecipes cooks say they’re using more new recipes versus two years ago. More than half of these Allrecipes cooks are preparing new recipes weekly.

The volume of e-commerce transactions in the United States for the second quarter of calendar 2020 was remarkable. Sales during the period were estimated at $211.5 billion, up 32% when compared with the first quarter of 2020 and up 45% when compared with the same period during 2019, according to the Census Bureau of the Department of Commerce. - Food Business News

Social platforms have further powered the shift toward digital by incorporating new tools that make it easier for consumers to connect directly with Brands, such as the ‘Order Food’ feature on Instagram.

While Ghost Kitchens were on an upward trend prior to the pandemic, the surge in food delivery as a result of social distancing has caused their growth to explode, and enabled the launch of ‘Digital only’ restaurants to compete with traditional brick & mortar locations.

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