The consumer packaged goods (CPG) industry is experiencing the largest channel proliferation and fundamental shift in the relationship between consumers and manufacturers ever. It’s a significant opportunity for CPGs to reinvent their role in the industry.
Digital commerce is becoming simply commerce
The online-offline paradigm is beyond outdated and the path to consumption is increasingly fluid. Consumers aren’t buying in one way. They move across digital and physical touchpoints all the time in everything from purchasing groceries to getting medical care.
Customers are no different. They want the same seamless experiences in their professional dealings with CPGs that they have as consumers – and most of them (87%) believe that that answer is in B2B commerce solutions that mimic the B2C experience.
Ninety-four percent of consumers across 13 countries purchase through digital commerce channels today
The future of digital commerce
Digital commerce channels are proliferating at a staggering rate. More and more channels are being created to meet consumer and customer needs. As new channels emerge, existing channels evolve.
Today, we identify fourteen material channels to engage consumers and customers and this number will continue to grow.
Driving profitable growth in this environment requires CPGs to navigate the complexity of operating in near real-time across numerous channels while effectively managing the growing costs of participation and delivering a consistent, omnichannel experience.
To master the digital commerce landscape, CPGs must build the right capabilities and capacity to seamlessly orchestrate activities within and across channels.
Digital commerce is the buying and selling of products or services through digital channels. This includes selling to either consumers or customers through direct or indirect channels.
Examples include direct-to-consumer channels, such as branded websites that sell directly to consumers and indirect-to-consumer channels, such as retailer, marketplace, and social sites where brands sell through the channels to consumers. Equivalently there are both direct and indirect to business channels, such as brand owned B2B portals and wholesaler portals respectively.
Digital commerce has created more options for consumers and customers to buy what they need on their terms. In addition, it has given brands a more direct relationship with consumers and customers through the digital pages and storefronts they now manage. It has also created an opportunity for material growth for the brands that rethink how they engage consumers and customers and operate as digital businesses.
The scale of digital commerce can be a significant challenge given the growing responsibilities for brands to own their experiences across all retailers, such as the product descriptions, images, retail media, and consumer feedback. In addition, digital commerce doesn’t create more consumers or needs, but it does create more channels which increases costs for the sales of those same products. This means brands must automate and systematize their capabilities to ensure they win market share while protecting margins.