Are CPG Companies Underestimating Online's Potential?
According to a new study from Deloitte, consumers' intent to purchase food, household and personal care products online is far outpacing CPG executives' expectations.
Separate surveys found that executives expect 35 percent growth in CPG-related categories in the next year and 76 percent growth in three years. In contrast, consumers expect their online purchases in those categories to expand by 67 percent in the next year and 158 percent in three years.
The study identified "indifferent" consumers as potentially the biggest driver of a massive shift in CPG category spending. Of the consumers surveyed, 41 percent neither like nor dislike shopping at supermarkets for CPG products. These "indifferent" shoppers, combined with those who dislike shopping at supermarkets, are most likely to consider e-commerce for CPG products with no particular attachment to the physical shopping experience.
Researchers concluded that CPG executives are underestimating the degree to which consumers could be incentivized to buy CPG products online.
Furthermore, while most executives correctly estimate that the majority of consumers dislike grocery shopping due to the time it consumes, fewer executives give credit to other factors such as inconvenience (47 percent), the crowds in stores (42 percent) and traveling to and from the retail store (39 percent).
Also, although touching and physically viewing products are important, the report identified a number of factors enhancing the online experience more so than in the past. These factors include free at-home delivery (84 percent of consumers state this as very important or important), pricing similar to or less than traditional physical stores (80 percent) and free in-store pickup (67 percent).
"The importance of e-commerce to CPG companies has not, in most cases, translated into a fully-developed strategy for capitalizing on this channel," said Pat Conroy, vice chairman, Deloitte LLP and consumer products sector leader.