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Business as Usual After COVID-19: Preparing CPG Brands for the Future

Post pandemic, consumer habits have shifted toward more eCommerce and less brick and mortar experiences. Adapting to the new normal is the current focus.

As toilet paper rolls and non-perishable food items gradually make their way back onto the shelves of stores across the nation, the coronavirus pandemic is still making its mark on the CPG market as a whole. Leaders in the industry are striving to meet consumer demands while safeguarding employees and customers alike. And while this is on the forefront of everyone’s minds, CPG companies are also anticipating what the “new normal” entails after strong virus-control measures are lifted.

In fact, social distancing and stay-at-home orders are expected to lead to the largest quarterly economic decline since World War II. So, how do CPG brands brace for the return to normalcy and adapt to new consumer behavior while restoring confidence? Strategies are expected to shift in order to align with today’s consumer behavior. This includes channel selection, shopper trip frequency, category consumptions, and brand preference.

The Shift in Purchasing Channels

One of the most fundamental takeaways from this pandemic and the latest consumer trends is how and where people are shopping. While different countries and categories of products will vary in impact, grocery and warehouse-style stores are seeing a significant increase in foot traffic, with many customers buying in bulk each trip. Major grocers are using this advantage to learn about consumer purchasing patterns and rationalize their shipments accordingly.

While foot traffic is up more than 30 percent for grocery stores right now, it doesn’t mean this will carry over to the new normal in the coming future. Amazon and e-marketplaces are seeing significant growth and now hold an advantage over brick-and-mortar stores for the future. This goes for everything from grocery to apparel and more. The rapid shift to eCommerce is introducing a new level of convenience to buyers and they’re proving less likely to turn back. Shelter-in-place orders have convinced many to explore new purchasing channels to minimize public interactions, leaving CPG brands to quickly adapt and place their products on digital shelves.

Optimize E-Commerce

Controlling your brand’s ability to sell and interact with your consumers begins with furnishing a solid, secure, and dynamic eCommerce experience.

Now more than ever, e-commerce is essential for CPG brands if they want to secure a spot in the competitive landscape. With so many third-party platforms like Instacart available, the e-commerce space has become simple to onboard for CPG brands. As priorities for consumers shift, so should the volume of your products going to e-commerce channels, including social media platforms like Instagram. Reset demand forecasting every day to stay in line with demands and put an emphasis on your fastest-selling products. This demand, plus implementing proper logistics and distribution centers for your products, should be your top priority in meeting online retailer demands.

As mentioned, this is an opportunity for CPG companies to deepen their relationship with third-party e-commerce partners and work with them in new ways to strengthen the customer experience. These partners can offer deeper data exchange or shared warehousing space. However, nothing gives makes the brand more powerful than owning your own e-commerce space. Direct-to-consumer websites or partnerships that allow you to control your brand presence by giving you full access to data and consumer relationships are going to give you the best outcomes.

Nesting at Home

Stay-at-home orders aren’t as temporary as they’re mandated. Meaning, even once restrictions are lifted, consumers will be inclined to stay home out of hesitancy to return to a normal lifestyle or even just for the desire to save money.  This newfound pleasure in nesting has increased the purchases of home improvement supplies and décor, as well as equipment for new hobbies and routines like weight-training gear, computer monitors, and even craft kits.

In line with the topic of e-commerce, these home nesters are contributing to the rapid shift of online grocery shopping. With a relatively low online penetration in the past, the grocery industry is making a comeback for delivery during shelter-in-place orders as home nesters experiment with doorstep delivery or click-and-collect for the first time. As a result, grocery e-commerce has jumped from 13 percent pre-pandemic to 31 percent as of late March. As people stay home, online grocery buying goes up. As a CPG operator, it’s important to monitor this trend moving forward as online grocery sales will see a continued post-crisis increase.

E-Commerce is the New Normal

The e-commerce space is still evolving and only a small percentage of overall CPG sales, especially food, are from online orders. But the coronavirus crisis has shifted consumer behavior quickly and e-commerce has become the top marketing trend among CPG brands nationwide. The customer decision journeys are involving many more digital touchpoints this year, and shoppers are setting higher expectations for CPG brands to have a both an online and offline presence. By capturing and managing data, operators can market accordingly and even at a lower cost. While the coronavirus pandemic is temporary, the impact it has made on CPG marketing is eternal.