Consumer Packaged Goods: Why Convenience Is King

Stuart Elmes

 

Most people hate working. We are at our happiest relaxing, watching sports on TV, sipping a latte at a cafe, or sprawled out on a sandy beach. But the behavior of brands, retailers, and consumers often violates this fundamental principle of human nature. Smart brands make their consumers' lives easier, and smart retailers create frictionless experiences that become indispensable to their customers. In the consumer packaged goods (CPG) industry, we’ve seen entrepreneurs that do the utmost to maximize convenience thrive, often at the expense of their peers. Let’s see what leading brands are doing to maximize convenience, and what you can learn from their efforts and innovations.


Online Is Easier

Consumer packaged goods: why convenience is king

As eCommerce transitions into the mainstream, we’re seeing more and more consumers migrate towards online paths to purchase. A 2017 survey found that growing numbers of shoppers were headed online, with half of the respondents reporting that they experimented with buying groceries online. Another survey of UK consumers from 2018 found that 51% of shoppers liked shopping online better than visiting brick and mortar retailers, a sea-change in consumer preference that has occurred in the past decade. Thus far, the most popular CPG categories in the digital sphere have been health supplements, pet care, and skincare. But if you pause for a moment and consider the volume and variety of products shoppers are comfortable buying online in 2019 compared to 2009, you’ll be faced with undeniable evidence that the internet is coming for us all. 

When asked the reasons for preferring online shopping, shoppers often mention predictable factors, like the ease of comparing prices, and free return and delivery policies. The convenience benefits of delivery are undeniable. It’s easier to use a few clicks or a simple voice command than it is to drive to a crowded supermarket or shopping mall, jostle your way through crowds, wait in a checkout line, and load up your car. But shoppers also revealed a hidden source of convenience (or headaches): the search function (29%) was the third most important aspect for consumers when choosing to shop on one website over another.”


Little Things Matter

Consumer packaged goods: why convenience is king

This should serve as an important reminder that the average online shopper is more sensitive to variations in convenience than her more traditional peers. If your online sales platform is clumsy and slow to yield the products that shoppers are craving, that tiny inconvenience could doom an otherwise sound business venture. As Angel Maldonado, the founder and CEO of EmpathyBroker, a firm that aids in eCommerce search and navigation, states: “The search function is becoming increasingly important, and not just as a tool to find something specific but also as a means of inspiration. Moments of joy in digital are real. They can be achieved when we’re pleasantly surprised by something that fulfills our goals, whether that’s something we’re actively looking for or not.” In other words, taking the time to optimize your customer’s journey to purchase shows them that you value their time and care about their happiness. It will have the benefit of not only driving sales, but also building deeper connections to your brand.

The checkout process is also an oft-overlooked part of closing the “convenience gap.” Retailers are beginning to take notice of the need to offer features like guest checkout, to remove the barrier of passwords, sign-ups, and complicated forms from the path to purchase. According to an Ampersand study, 88% of online retailers are now offering the service. They also report that the majority of retailers are now offering payment options beyond just credit and debit, with 80% now offering at least one more alternative, whether PayPal, Klarna (a new company that lets shoppers pay for goods after they arrive), and financing options. But there is still a lot of room for improvement, with only 9% of retailers offering the option to save your basket, and a mere 8% allowing for payment with mobile wallet services, like ApplePay. 


Broad Trends

Consumer packaged goods: why convenience is king

Trends in the CPG industry are often driven by the largest retailers in the game: Walmart, Amazon, and the newly merged Carrefour and Tesco. And these giants have shown a commitment to voice shopping that has persisted through a rocky launch. In spite of relatively small numbers of consumers currently using this technology, it’s obvious to all of the players in this marketplace that once the kinks are worked out, voice-based shopping for staples, products with regular patterns of use, and other everyday essentials will offer the easiest way to obtain dog food, toilet paper, and breakfast cereal. 

Another trend we’re seeing is massive retailers adopting strategies that work online, and applying them in the realm of brick and mortar. This is evidenced in cashless stores that use apps, sensors, and cameras to improve shopping experiences, like Alibaba's Hema supermarkets, Amazon Go! Stores, and other innovative retail models like SK-II’s Tokyo smart store. Technology doesn’t need to replace traditional retail models, but in order to stay competitive CPG brands will need to leverage technology to improve customer experiences if they want to remain successful. Consumers are starting to realize that technology can offer dramatically improved shopping experiences, and their tolerance for inconvenience is shrinking every day.

Another trend to watch is the explosive growth of the direct to consumer (DTC) sales model. Its success has been most dramatic in the personal care industry, with beauty retailers and shaving brands becoming major players in their industries. Dollar Shave Club was purchased by Unilever in 2016 for $1 billion and is now moving into the physical retail space, offering a lifestyle magazine and a range of men’s products including hair gel and moist wipes. In the grocery industry, we’ve seen online brands like Graze invade the snack aisles of supermarkets, and we’d expect meal subscription services like Blue Apron to expand their footprints as they build trust in their brands. Amazon is also likely to jump on these trends, which guarantee a higher rate of loyalty and customer retention than traditional models.


The Future

consumer packaged goods: why convenience is king

Convenience means that more shoppers will be spending less time in drug stores and supermarkets. More CPG products will be delivered directly to the consumer’s home or picked up at the curb. As a result of this, marketing strategies will need to shift to the online space, and that first purchase will become critical to growing your business. If you have any questions about maximizing your brand's potential in this brave new world, get in touch with Adimo today!