Category in: Amazon Marketing, Amazon Marketing Strategy, Consumer Packaged Goods (CPG), CPG Advertising

To Scale, Your CPG Brand Needs to Be Online and On Shelf

By Aalap Shah, Founder of 1o8 Agency

We continue to hear a lot about the retail apocalypse — and with good reason. More than 9,300 stores closed in 2019, smashing the previous record of roughly 8,000 store closings in 2017. Retailers have already announced that 1,700 stores will close in 2020.

Yet consumers are not abandoning retail altogether. Instead, their tastes and behaviors are radically shifting due to the rise of e-commerce. Now, consumers are looking for meaningful destinations and experiences, along with the back-to-basics of service, product availability, and convenience.

The retailers who get this are thriving.

How Retail Habits Are Changing

To understand what’s going on, you have to understand what consumers are willing to pay for online and what they want to pick up themselves in stores.

Consumers are still shopping at stores for household staples that don’t make sense to order online or that they need immediately, such as personal hygiene products like deodorant and soap. And, despite the rise of Instacart and other delivery services, almost all consumers continue to shop for groceries in stores. In 2019, only three percent of American grocery store purchases were made online, according to The Atlantic. 

Additionally, we’ve seen two new retail trends emerge because of the rise of e-commerce.

The first is that consumers want to see the product in real life before making a decision. Best Buy recognized this several years ago when it doubled-down on turning its stores into showrooms and offering services to set up customers’ gadgets at home. The result is that Best Buy’s sales, particularly online, are soaring.

D2C brands also understand that consumers want to touch their products. That’s why brands like Warby Parker, Casper, Parachute, and MM.LeFleur all have opened stores across the country in recent years. We’re even seeing the rise of D2C districts such as in SoHo in New York City and on Armitage Avenue here in Chicago.

The second trend is that consumers are also looking for immersive, Instagrammable experiences that they can’t get online. In some cases, they are looking for a break from technology. At Casper’s Dreamery nap room in New York City, customers can spend $25 to rest in a pod for 45 minutes.

MM.LaFleur, a D2C brand that sells luxury clothes for professional women, designed its stores so they feel like a home — one that also offers blowouts and manicures on site.

Why Retail Matters to All Brands

Retail’s reach is also essential for a brand to scale. In December, the Wall Street Journal reported that “dozens of online consumer-products startups are finding their success depends on getting on shelves of Walmart Inc., Target Corp., and other traditional retailers.”

For example, P&G acquired Native Deodrant in 2017. Within a year, the brand was selling at Target. Native added bar soap and toothpaste, and it started selling at Walmart and Walgreens as well. Roughly 40% of the company’s sales now come from retail.

Dollar Shave Club, the D2C brand which was famously acquired for $1 billion by Unilever in 2016, proved far more challenging to scale as a subscription service. Its razors have never been sold in stores, and the brand will finally break even this year.

Conversely, razor rival Harry’s focused on Target early on. Within a few weeks of going on sale there in 2016, the brand accounted for almost 50% of Target’s razor-handle sales. Harry’s was acquired for $1.4 billion last year by the maker of Schick razors.

So, what does this all mean for your brand? Retail should absolutely be part of your strategy. However, you can and should use digital marketing tactics to ensure your success in stores.

How to Use Digital Marketing to Ensure Your Success in Retail

Building an organic and incentivized influencer base is key in driving affiliates (online) or offline (i.e. Popular Pays and other influencer platforms), which can create both foot traffic and sell-through in a number of platforms or offline retailers.

Another popular tactic is building up a powerful email marketing database.  This not only creates opportunities for mindshare via email marketing, but it also generates data for geo-targeted ads that create momentum for your shoppers to go in-store and trial your product or line extensions.

SEO is a tactic that is often overlooked and can help retail-focused brands in the CPG market by having their products “show-up” at the right time and place when consumers are searching for new brands.

For example, If I’m looking for a new, organic and chemical-free deodorant, I might start my search in Google and explore the different options.  If your results come up when I’m looking, it’s a great opportunity for your brand to showcase and merchandise the product, benefits, and sell me either online, Amazon, or at big-box retailers.

In tandem with SEO, reviews are vital to driving sell-through both at retail and online.  This goes back to having an organic base of consumers that are in love with your product who can leave your reviews across channels.

Often times, consumers will pull up your brand within their Amazon app while concurrently visually measuring your product on shelf against other brands.  Reviews are key and could be the difference between your product being bought against others.  Don’t forget about sourcing reviews for other channels and platforms such as Google, Walmart.com, and Facebook.

You’ll also want to make sure you have a fully built-out presence on all of these platforms, particularly on Amazon where consumers are closest to making a purchase.

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