A new report from BCG/Google/IRI reveals that CPG companies need to plan for a “1-5-10” market share in the US over the next five years. Digital’s current 1% penetration is predicted to grow to 5 percent and could even accelerate to 10 percent says the report’s findings.
The Digital Future: A Game Plan for Consumer Packaged Goods, prepared for the Grocery Manufacturers Association by The Boston Consulting Group, Google and IRI, looks at how CPG companies can best position themselves for eCommerce growth and take advantage of significant digital opportunities.
The report recommends that CPG companies plan for a “1-5-10” market share in the U.S. over the next five years, in which digital’s current 1 percent penetration will most likely expand to 5 percent but could quickly accelerate to as much as 10 percent with breakthrough innovation in delivery models.
The findings reveal that the impact of digital is most critical at the early stages of the path to purchase, underlining the importance of high-quality product content and customer ratings and reviews.
– Almost 40 percent of offline shoppers and more than 30 percent of online shoppers reported that technology’s impact is greatest during the discovery phase
– More than a quarter of both offline and online shoppers said that its biggest impact is in the search phase
– More than a quarter of in-store shoppers reported that online activity is one of the three most influential factors on their path to purchase.
Reaching a tipping point
The report considers that other retail categories have experienced similar changes in buying habits as consumer demand and technological innovation have combined to overcome previous limitations. In categories such as footwear and small appliances, digital sales rose to a tipping point and then took off once the industry got the digital offering right. As technological innovations impact more deeply on consumers’ daily lives, Boston Consulting Group believes CPG categories are approaching a similar juncture.
“The CPG industry is fast approaching a tipping point, driven by a confluence of trends. Consumers are embracing technologies, devices and services that make everyday tasks such as shopping and cooking easier and more efficient. This is fragmenting the purchasing pathway as consumers regularly switch back and forth between digital and physical channels, and they interact digitally both in and outside of stores.”
As shoppers increasingly embrace digital innovation, companies are rushing to meet these changing demands – with two notable announcements in the last week alone.
With the report suggesting that breakthrough innovations in delivery models could accelerate CPG’s digital penetration to 10 percent in the next five years, it seems that CPG could finally be reaching that digital tipping point.
Keith Anderson, Profitero’s VP Strategy and Insights, will be speaking at this year’s Shopper Marketing Conference & Expo and sharing CPG eCommerce insights on how shopper marketers, eCommerce directors and brand managers are using Profitero to improve brand equity and drive sales.
If you’re attending Expo and would like to arrange a meeting with Keith to find out more about Profitero’s insights, email us at sales@profitero.com.
About Profitero
Profitero collects online data on more than 250 million products every day, delivering global online insights and eCommerce intelligence to the world’s biggest retailers and brands.
We provide both brick & mortar and online retailers with their competitors’ prices, promotions and full product assortment information. More than 50 global retailers, including Staples, Waitrose, Ocado, Morrisons, Walmart-owned Sam’s Club and Worten, rely on Profitero’s accurate and timely competitor price intelligence to make better informed and more profitable pricing decisions, helping them to increase sales as well as margins.
Profitero also supplies brands with critical online insights, helping to enhance their online sales and market positioning. We deliver key online metrics, including share of online shelf, share of voice, pricing, brand price monitoring and new product monitoring, in any country and from any online or multichannel retailer, updated every day.