CPG sales & eCommerce: Move to modern starts here
May 25, 2018
Agile startups and empowered shoppers are slowing the growth of established consumer packages goods (CPG) companies. While the top 25 CPG companies bring in 45 percent of category sales, they account for just 3 percent of the sector’s growth.
To reclaim growth, established companies are embarking on a “move to modern.” That is, they are reconsidering not only how they compete, but also how they build and sustain relationships with their customers. In so doing, they are recognizing the critical role online channels play in engaging consumers and pursuing untapped growth opportunities.
eCommerce, which used to be the least productive conduit to CPG sales, is now exhibiting an annual growth rate of 8.8 percent, far exceeding growth rates of other channels. If the pace of online sales growth continues—and there’s no indication it won’t—eCommerce will be the fourth largest channel for CPG sales by 2022.
Leading CPG companies recognize that seizing the online opportunity is a critical step on their journey to becoming a modern company. Those that strengthen core areas of eCommerce today will be the ones to deliver endless aisles, capture endless insights, and pursue endless opportunities for growth in the years ahead.
Accenture research suggests that CPG companies need to advance through three levels of maturity before achieving eCommerce mastery. This journey will involve applying an innovation mindset to the way they work, think and deliver new experiences for the modern consumer. It won’t happen overnight, but the payoff is worth the wait. We believe companies that make it to the highest level of eCommerce maturity will ultimately achieve up to 75 percent CAGR over five years.
Each maturity level is associated with growth potential and characterized by the adoption of distinct capabilities.
Level 1 maturity: Brilliant basics
Level 2 maturity: Gear up for differentiation
Level 3 maturity: Lead the pack
In 2022, online sales is expected to surpass $108 billion for the top 10 eCommerce markets.
CPG companies that master eCommerce find that this channel is more than a sales engine. When applied properly, it helps build modern relationships with consumers and produces valuable insights that will help CPG companies improve experiences across all channels. In this regard, eCommerce facilitates the creation of hyper-relevant experiences for consumers over the long term.
Are you ready to “move to modern?”