Seeking out the path to CPG's omnichannel future
With food retailers scrambling to establish themselves in the e-commerce realm, especially as Amazon moves further into the food retail market, it may not seem vital for CPG brands to have a strong omnichannel strategy. But in today’s food retail environment, that is not quite the case.
Today’s consumers are accessing food on their mobile phones, online and in stores, and sometimes they want to look at a product on their mobile phones and then go to the store and buy it, while other times they see it in the store and buy it via mobile or online. So it’s very important that CPG brands set themselves up across all the different platforms and channels so they can have access to consumers on their terms, where they want to shop, according to Bobby Marhamat, chief operations officer of omnichannel platform provider Revel Systems.
“Consumers want to be able to have access to the merchants that they want to either buy from or get info from on their terms, so it’s a matter of being where the consumer wants to access that information and/or purchase from that merchant,” he said.
Omnichannel is a high priority for nearly two-thirds of CPG brands in the US, but only about 41% are seeing significant returns on any omnichannel ROI metrics, according to a study by KPMG. While it is critical for CPG brands to understand where and why consumers want to make purchases, in today’s environment, retailers are the ones that have the deeper customers insights and CPG brands need to utilize that in partnership with retailers, according to Julio Hernandez, KPMG’s global customer center of excellence lead and US customer advisory lead.
“It’s always been an interesting dance,” he said.
Today, one side of the food retail coin -- retailers -- has the data, and the other side -- CPG brands -- wants it, according to Duncan Avis, principal of KPMG’s Connected Customer Enterprise. And it is that relationship, paired with effective implementation of omnichannel strategies in the CPG category, that will allow food retailers and CPG brands to take on Amazon in today’s competitive retail landscape.
But while many CPG brands consider omnichannel strategies among their biggest priorities, they must take omnichannel a step further to have a truly effective approach moving into the future, the KPMG study found. Specifically, the study identified eight “critical capabilities” that CPG brands must have a handle on moving into the future of omnichannel: product strategy, customer experience strategy, supply chain and distribution strategy, partner ecosystem strategy, data and advances analytics strategy, technology architecture strategy, integrated commerce strategy and organizational alignment and workforce enablement strategy.
The key to setting up an effective omnichannel strategy in the CPG space is a good foundation, according to Marhamat. Revel Systems works with brands to set up mobile, online and in-store experiences in the same way so consumers can access the same information, regardless of which channel they choose to shop. This allows for a consistent brand experience.
The first step to this is determining who a brand’s target customer is, Marhamat said, and then letting that determine whether a mobile experience or an online experience should be established first. And ensuring that each experience is added thoroughly and completely along the way, and taking the time to establish that strong omnichannel foundation, is essential to allow the brand to track their customers all the way throughout their buying experiences.
The companies that take the time to develop strong omnichannel strategies and embed experiences across channels within their brands are the ones that are able to drive loyalty among their customers, who can purchase their products in a number of different ways, Marhamat said. And when shoppers can buy online for one purchasing occasion but then walk into a store for another, brands with a strong omnichannel strategy are able to track those shoppers, see their behaviors and market to them effectively.
“So you can market to them on their terms and be able to create loyalty within that experience,” he said.
Social media has become a key component to omnichannel strategies across industries, including in food and CPG.
“Social is increasingly the first place people turn to when they want to connect with brands -- especially CPG brands, which make products that consumers rely on in their everyday lives,” said Andrew Caravella, vice president of strategy and brand engagement for Sprout Social, which provides brands with tools to help them manage their presence on social media.
Twitter is especially important to CPG brands’ omnichannel strategies, he said. Its fast-moving environment allows socially savvy brands to respond quickly to consumers’ feedback, making it an effective customer service tool. Twitter also brings together like-minded consumers, making it a forum in which brands can reach out and share content with communities of users, Caravella said. And those communities can also provide CPG brands with valuable data about the consumers who buy their products.
“The unfiltered and unfettered conversations that take place on Twitter, often times at scale, are a gold mine for product development and brand innovation teams within CPG organizations,” he said.
Moving forward, CPG brands with effective social strategies will look to Twitter and other platforms to deliver experiential content, Caravella said.
“[CPG brands] have an immediacy and familiarity that lends them beautifully to social engagement,” he said. “The possibility to use social to deliver standalone customer experiences -- of trying or working with a product, for example -- is certainly around the corner.”
As more CPG brands move further into the omnichannel space and look to the next step in connecting with today’s digital consumers, convenience will play a major role, Marhamat said. Convenience in the CPG category will certainly take the shape of delivery, pickup and other similar services, he said, but it will also mean delivering content to consumers about the different ways they can purchase products so they can choose their buying experience.
And while it might seem counterintuitive, Marhamat said this level of convenience will create even more loyalty among consumers. For example, Amazon has reached a very high level of convenience, but also a high level of loyalty.
“People are getting two or three or four boxes [from Amazon] a day, and it’s that ease of use and that convenience factor. And people start to get hooked on that,” he said.
If you enjoyed this article, join SmartBrief's email list for more stories about the food and beverage industry. We offer 20 newsletters covering the industry from restaurants to food manufacturing.