CPG, also known as Consumer-Packaged Goods, are the daily essentials that require regular replenishment & replacement. Learn the best tips for their fulfillment process.
Consumer Packaged Goods or CPG as we know it, comprises a host of regular household items that require regular replenishment like food, beverages, detergents, cosmetics, pet food, and groceries. These are items which the maximum population preferred to shop from a store, but courtesy of the COVID-19 pandemic, the online grocery stores have gained momentum. While they existed even before the pandemic, the sales saw a spike amid it, until now.
In fact, in 2020, during the COVID outbreak, eCommerce sales across the CPG industry skyrocketed. Consumers of certain age groups who used to shop in-store started switching to online shopping for safety and convenience. In the U.S. the total CPG online sales amounted to $58.6 billion, accounting for 11% of total CPG retail sales. CPG brands witnessed significant growth in internet traffic as most retailers moved online.
The Current Key Trends Shaping CPG Industry
CPG industry is changing rapidly with new brands and competitors emerging in the market regularly. New technologies, shift in consumer behavior, and changes in marketplaces are creating challenges as well as new opportunities for veteran players and startups. Here are some of the emerging trends in CPG eCommerce:
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- CPG Companies Going DTC. Existing CPG companies are joining the direct-to-consumer wave by acquiring competitors or launching entirely new brands or selling their existing brand products directly to consumers.
- Launch of More Private Label Brands. Retailers are starting their own brands which provide them better margins and direct control over product development. DTC brands are becoming the new favorite to CPG conglomerates such as Amazon private label clothing brand Good threads.
- Omnichannel CPG Shopping Experience. A recently emerging trend among brands and retailers is providing consumers with omnichannel shopping experiences that include seamless purchase experience across different devices and even in-store vs. online.
- Demand for Sustainability and Clear Brand Value. Currently consumers have become more sustainable-minded and value-conscious. 47% of shoppers out of 1500 surveyed online, say they prefer to purchase from environmentally conscious retailers. Some of the top reasons among shoppers for switching brands are protecting the environment, lack of transparency, climate change, and corporate social responsibility.
- Consumers Expect Personalization. In the current AI-empowered digital world, consumers expect a personalized shopping experience from brands. A good example in this context is the monthly subscription box service, Bark Box that asks questions about your dog before customizing their delivery.
CPG Order Fulfillment
CPG eCommerce brands offer a wide range of diverse products leveraging omnichannel strategies such as mobile-optimized websites and apps. Hence, providing delivery options becomes critical for customer growth and retention. With most of the brands offering a multitude of products, convenience and quality play more significant roles in purchase decisions than small price differences.
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Here are some of the essential factors that are likely to become the differentiator for CPG brands:
- Focus on Faster and Easier Delivery Options. In CPG eCommerce, faster and easier delivery options are a must-have for customer satisfaction. A while ago, Walmart launched a program called ‘Walmart Plus’ to compete with Amazon Prime so they can enable retailers to offer faster free shipping to consumers. Ensuring a strong logistics and fulfillment system will keep you ahead of your competitors
- Inventory Management. CPG products are products high in demand as these are regularly purchased by consumers. So, it is important to have an efficient inventory management system in place so that you can prevent stockouts. You need to have a built-in smart application that provides you with real-time data and forecasting.
- Predictive Demand Forecasts. A significant contribution of Big Data in eCommerce is demand forecasting. Earlier forecasts were typically done based on past trends. However, with the advent of advanced technologies, CPG companies are now equipped to gain insights that are predictive and forward-looking.
- Demand for Fulfillment Flexibility. Consumers nowadays demand flexibility in fulfillment and convenient pick-up options. A Deloitte study observed that 50% of consumers were ready to pay extra money to get conveniently what they ordered online. You need to have an expert fulfillment team to achieve customer satisfaction.
- Agile Supply Chain in CPG eCommerce. CPG eCommerce requires an agile supply chain that is ready to respond to any disruption or demand shift in the market. The supply chain experts leverage digitally-enabled visibility and communication between trading partners instead of adjusting demand forecasts against wild swings in the marketplace.
We have seen CPG eCommerce fulfillment is a daunting task even for the stalwarts of the industry if they attempt to do it on their own. For efficient order fulfillment, especially in a highly challenging marketplace like CPG eCommerce, you need an efficient and expert 3PL partner to help you get customer satisfaction, grow your business, and stay ahead of the competition.
XPDEL is a leading hi-tech provider of fulfillment and logistics services, on a mission to enable growth for eCommerce companies. Our existing customers know that everything we do, or share is to help them grow. We are futuristic in our vision and constantly work on creating technology that allows us to meet customer expectations not just for today but also for tomorrow.
We have a widespread network of fulfilment centers that enables us to efficiently handle nationwide delivery in the US – same day, next day, 2-day delivery. Being located closer to the end consumer, we deliver much faster compared to others.