The customer-centric blog of Linc Global
Life used to be pretty easy for well-established CPG brands. As long as they had a handle on their supply chain, manufacturing and distribution, their operations would run smoothly. Competition was centered on securing prime shelf space and fending off brand or product line extensions from other CPGs or the private label offerings of supermarkets or big-box retailers. Magazine and TV ads, along with retail coupons, would remind consumers why they preferred this brand of household name toothpaste or breakfast cereal over another. Maybe if you wanted to be seen as particularly cutting-edge, you tried your hand at a light-hearted branded Twitter account. And then things changed quickly and dramatically. What was once smooth sailing got a whole lot rougher.
This is a guest blog post from CPG and Amazon expert, Melissa Burdick. Melissa has over 12 years of experience in ecommerce, and works with brands to help them develop ecommerce strategies and win online. She previously helped launch the CPG retail business on Amazon.com, and was at Amazon Media Group at its inception. For a long time, CPG brands didn't need to be overly concerned with ecommerce. US CPG manufacturers sleepily watched other categories (like consumer electronics) and markets (like UK and China) increase in ecommerce maturity while still focusing on their bread & butter brick & mortar businesses. However, as shifting consumer preferences, low barriers to entry online giving rise to niche incumbent brands, and declining brick & mortar sales, an ecommerce strategy has suddenly gone from nice to have to critical and required immediately. According to a new Nielsen study, brick and mortar sales for fast-moving CPGs have declined, while online sales of these same goods have grown by a massive 32% over the last year. The study stated that nearly nine of out of 10 dollars of FMCG retail growth came from online last year.