CPG Goes D2C

New Astound Commerce report explains why the future of CPG is digital.

COVID-19 continues to disrupt the world as we knew it, including all aspects of commerce. A particularly dramatic development has been the accelerated decline of brick-and-mortar, accompanied by a surge in ecommerce. Though this shift was borne out of immediate necessity—in the initial stages of the pandemic, people were simply locked out of retail outlets—it’s now clear that digital commerce will also prevail post-pandemic.  And that includes verticals that were more or less dominated by physical retail prior to the shutdown—for example, consumer packaged goods (CPG).

CPG consists of those items that consumers need to purchase on a regular basis—consumables like food, beverages, cleaning products, wellness, beauty, and cosmetics among them. Unlike the luxury goods, electronics, apparel, or other products that typified most ecommerce trade prior to COVID-19, consumer packaged goods are usually acquired with little planning, and are often bought on impulse or out of necessity and urgency. That—along with the fact that they must be purchased regularly—made physical stores the default venue for acquisition.

That’s no longer the case. As a new Astound Commerce special report makes clear, digital commerce has made significant inroads into the CPG realm, a trend that will only gain momentum post-pandemic. A Brave New World for CPG: 7 Ways to Navigate the Industry’s New D2C Landscape, breaks down the evolving CPG market, explains its stunning shift to direct-to-consumer (D2C) digital commerce, and identifies strategies for seizing the opportunities that the change affords.

Some large—and savvy—CPG brands already have established sophisticated D2C transactional channels. Earlier this year, PepsiCo launched pantryshop.com and snacks.com, sites that offer consumers hundreds of the corporation’s popular edibles, from individual bags of Ruffles potato chips to “pantry kits” themed to specific meals or activities, such as breakfast or workouts. Nestlé launched a platform for its beloved KitKat chocolates, while Unilever reported “rocketing” sales of its food products on its ecommerce site through the first quarter of the current year.

But as the Astound report emphasizes, many companies—especially those in the SMB sector—need to play a lot of catch-up. A 2019 survey by the portfolio website Visual Objects found that 40 percent of small businesses lack a website, while 38 percent eschew social media. Candidly, these are shocking figures. If you want to sell a product these days, refusing to participate in digital commerce is commensurate with declaring bankruptcy—and that applies to all goods, including CPG products. 

Even if you’re late off the blocks, it’s critical to get in the race ASAP. That’s the compelling reason behind Astound’s partnering with Salesforce to develop Quick Start Commerce CG, a fully managed D2C solution for consumer packaged goods. Quick Start gets CPG brands with minimal ecommerce capability fully invested and operational in as little as two weeks.

Astound also has developed an advanced solution: Velocity. While Quick Start delivers what its name implies—an immediate remedy for an ecommerce deficit, a means to get a CPG brand online and transacting rapidly—Velocity offers a deeper, more comprehensive solution with more advanced features and capabilities. 

For Astound, CPG is a specialty niche, a space we know intimately. We have provided bespoke, powerful strategies for numerous prominent CPG brands over the years, including Nestlé, Newell Brands, and Johnson & Johnson.  

Through QuickStart and Velocity, we bring together best-of-breed ecommerce solutions that cover CPG must-haves end to end. These include CPG-optimized customer experience (CX) with multiple design themes; Salesforce Commerce Cloud and Salesforce Order Management platforms; payment gateway, tax compliance, fraud protection; multi-carrier shipping integration; and estore setup and merchandising—as well as ongoing store updates, management, and 24/7 support.

Our solutions are backed by the analytic and creative skills of more than 200 certified architects and engineers, and our commitment to our clients is total. We don’t simply construct a platform and walk away. Ecommerce is an evolutionary process, not a one-and-done. The successful platform is one that is scalable and responds quickly to shifting market conditions and consumer demand. Velocity assures these inevitable changes are accommodated effortlessly.

Someday—hopefully, one not too far in the future—COVID-19 will recede. The pandemic will end. When that happens, we can expect a bounce in physical retail. People will want to get outside, to engage the living world—and that includes shopping in actual stores, chatting with sales associates, and evaluating and touching physical products. But the physical structure of retail has changed dramatically during the last six months.  

A vast number of stores are now shuttered, and most aren’t coming back—and that includes outlets that sell consumer packaged goods. Costco, Walmart, and Whole Foods are outliers, not templates that should be emulated. Consumers have changed not only the way they shop; they’ve changed the way they think about shopping. D2C is addictive—for both consumers and companies. And brands that ignore this reality do so at their own peril.

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Igor Gorin

Igor Gorin is chief executive officer of Astound Commerce North America.

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