The sales graphs coming out of the spring 2020 retail season showing the growth of online grocery orders are impressive—even for the brick and mortar stores who were literally scrambling to keep up (or catch up) with demand. Suddenly, everyone wanted to stay at home and have supplies placed on their doorstep.
Changes in overall shopping behavior initiated by the coronavirus pandemic will continue, but it’s difficult to make predictions about how those changes will play out. According to Common Thread Collective, “The impact of coronavirus has been so seismic that predictions surrounding eCommerce can’t exactly be faulted. Where many previously hailed slowing growth and the separation of low-end versus high-end, COVID-19 has given birth to a new category… defying expectations and divides.”
With that uncertainty, CPG brands need to continue to take advantage of eCommerce opportunities without eCommerce erosion hurting their ability to keep and sell products on physical shelves. Balancing marketing for physical sales and digital sales is difficult and complex and requires strategic planning.
One piece of good news CPG brands can appreciate from the pandemic is reported in the Consumer Brands Association survey results: Americans have more trust in CPG brands thanks to the consistent provision of in-demand products consumers wanted for protection against the virus, companies treating employees fairly, keeping costs the same, giving back to those in need, and sharing information with consumers.
Collaboration Between Retailers and Manufacturers
In April 2020, Colin Stewart wrote for TotalRetail how change is all retail can rely on at this point, so the industry as a whole needs to be on board with creatively adapting and responding as shopping habits change… and then change again.
We’ve already seen how a combination of manufacturers increasing production of in-demand products along with retail imposing purchase limits have helped weather surges in demand on items like toilet paper and sanitizing wipes. For the most part, this has increased consumer confidence that they’ll have access to the products they need when they need them.
A focus on communication and collaboration will continue to help shoppers have access to whatever items they deem most important as concerns and priorities shift, and avoid challenges caused by eCommerce erosion. Stewart noted that manufacturers can also help by offering pallet quantities and direct ship options.
Look for Creative Partnerships
With the cancellation of the 2020 Olympics and nearly every other large events for the rest of the year, brands need to re-think both their advertising strategies and their production and supply strategies.
Smaller businesses initially have done better at this because of their agile design. An example is the Mexican restaurant that gave a free roll of toilet paper in every delivery and left their entire promotional strategy to the viral abilities of social media after the first few deliveries. Or the pubs that offered delivery of dry goods they could still source from their supplier along with take-out meals.
In both cases, there was an easy win-win for both the business and the consumer. This agility and creativity won’t be as easy for “a CPG industry that has long struggled with localization efforts” wrote Peter Adams for MarketingDive. But it’s worth looking at how creative partnerships can increase reach—whether it’s online or in physical stores.
One thing not to do is step back and ride things out. Brand equity is more important than ever as we see long-lasting changes in consumer behavior. As panic-buying slows, CPG marketers need to keep their brands front and center of consumer’s minds.
Bloomberg reported in April 2020 that DoorDash Inc was beginning to add delivery of dry goods from 7-Eleven and other convenience stores, and Uber has expressed interest in doing the same thing. It’s a slightly out-of-the-box thing that could benefit both the companies and consumers involved, and it suggests a more local connection than what companies like Amazon offer since the products are truly coming from the store down the street.
The challenge for CPG brands in finding and establishing creative partnerships is that the wants and needs of Americans vary across the country. Adams quotes Kantar Consulting’s Don Abraham, “There’s going to be a really uneven distribution across the country about where people are clamoring for DTC and where, frankly, people are looking forward to going back to stores”. This only reinforces the need to pursue eCommerce and retail options concurrently. Retail stores need to be confident that brands will continue to push the availability of products on shelves, rather than focusing on online ordering, especially in places where people want to shop in-person again.
Messaging that Connects with Consumers
Peter Adams’ article for MarketingDive was published on April 14, 2020. At that time there was a need for CPGs to look at how their messaging and creative could focus on human connection, health, wellness, and hygiene. Two months later, brands also need their messaging to emphasize equality, valuing diversity, and righting wrongs—in particular racial injustice. These two focuses are not incompatible, nor are they a trend that only requires a brief surface campaign.
OneSpace published an article in March by Joshua Schall titled How CPG Brands Can Win Over New Online Grocery Shoppers. The recommendations are easily adaptable to the additional messaging challenges and opportunities that brands need to consider as Black Lives Matter continues to gain momentum. How’s this for a perfect road-map: “CPG brands need to exert extra efforts to appreciate what their customers may be going through right now. It is important during times of crisis to actively listen to your customers through available feedback loops, be flexible in your customer service procedures, and ensure customers that their needs will be put ahead of short-term corporate profits.”
I would argue that that is the approach CPG brands should have ALL of the time, not just in times of crisis if they really want to drive broad long-term brand preference. While shopping habits shift between online and in-person, having the same brand available through both channels gives customers one less thing to worry about.
CPG brands must also establish themselves as authorities, both in health and hygiene, and in taking social conscious policies to a tangible action platform. Use social media platforms to connect with interested consumers and to partner with agencies that are making a difference. One fantastic example of this occurred in the UK, beginning June 6, 2020. An individual tweeted their pleasure that Yorkshire Tea hadn’t spoken out for Black Lives Matter. Yorkshire Tea’s response was perfect:
But the discussion didn’t end there. Another Twitter user weighed in to suggest she’d switch tea brands to PG Tips because of this. PG Tip’s response set a new standard for brands:
Marjorie Powers writes for Stella Rising, “Media via social, digital, and video channels activated now builds a bridge of brand awareness and relevance… An additional caveat: mindful messaging is key and brands need to really consider their creative from all angles. That said, make measured decisions, rather than drastic ones, and keep thinking long-term.”
Another area of messaging is educating consumers on how to purchase their products. Again, this doesn’t have to be an either/or campaign. Let shoppers know how they can get your products delivered right to their door and where they can find your products in-store. Keep the messaging clear and easy-to-follow. When brands talk about eCommerce options, don’t just target older viewers. Consumers across age groups may be interested in eCommerce options for the first time. Show them how your products are easily accessible and take away the stigma from those who have never bought online before.
Along those lines, the OneSpace article talks about the challenges of supply chains for CPG brands—especially during times when demand exceeds all predictions and eCommerce erosion becomes an even bigger threat. “That is why controlling at least one retail distribution point is extremely important for CPG brands. If you’re not already selling products on your direct-to-consumer website, there is no better time to jumpstart the project.” They go on to note that grocery stores will hide products from searches when they are out of stock, so maintaining your inventory is crucial for protecting in-store sales.
How Walmart is Balancing Ecommerce with In-Store Shopping
Walmart is thriving in the first quarter of 2020. As Forbes’ Shelley E. Kohan reported on May 19, 2020, they saw a net income increase of 3.9%. That’s after investing in setting up CDC protocols for protecting customers and employees. Their president and CEO Doug McMillon said it this way, “Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future.” It’s a strategy that appears to be as future-proof as possible: make it easy for customers to buy goods from you both online and in-store.
But even huge retailers like Walmart are struggling to meet demand in light of supply chain disruptions: they’ve seen growth of over 10% at the same time that inventory is down 8%. Kohan predicts some changes to address this: shorter, more agile supply chains, and moving some off-shore essential products and services back to the U.S.
CPG brands can follow suit by enforcing messaging that consumers can order online for delivery or curbside pick-up, or safely go in-store and get the exact same brands they’ve been counting on for years. Behind the scenes, this messaging needs to be backed up by an agile and efficient supply chain that can meet demands seamlessly. Any opportunities to introduce domestic manufacturing only serve to reinforce the message that brands are committed to work, jobs, and supplying products to their neighbors, families, and friends.