The acceleration of digital CPG advertising has carved out a fast-growing niche in an otherwise slow-growth sector.
This past year, online consumer packaged goods sales represented 64% of growth in the industry.
As these numbers continue to rise, direct-to-consumer brands are turning the traditional CPG growth model on its head.
Trends such as personalization, subscription models, and multichannel advertising that were previously viewed as passing themes are now a necessity for those wanting to compete in the industry.
Here’s a look at the latest CPG advertising trends and shifts in the market that are disrupting the industry this year and beyond.
5 CPG advertising trends disrupting the industry
Consumers lean on digital for CPG product purchases.
- 75% of CPG shoppers said they used digital channels in their shopper journey to get inspired, research, browse, or select a brand.
- 85% of consumers stated they take a product-related action (comparing prices, reading reviews, etc.) within 24 hours of discovering a product that meets their needs.
- 61% of millennials are already purchasing CPG items online, while 39% use social media to look up more information on CPG products.
Long gone are the days that consumer packaged goods confine to the shelf of your local One-Stop-Shop. Consumers today are using search and social platforms to discover, learn, and engage with CPG brands regularly.
To meet evolving needs, consumer packaged goods companies are shifting the way that they approach their CPG advertising spend.
Historically, brands drove awareness with broad advertisement and flashy packaging. Today, CPG brands are focusing their efforts on granularly identifying and targeting their best audience.
More than a third of Americans buy their groceries online.
- More than half (56%) of all supermarket customers regularly interact with their food store of choice via one or several social channels.
- 8% of Internet-using adults bought their groceries online in the last 12 months, which is up from 23.1% from the year before.
- Ninety-three million people buy their groceries online, a gain of 35 million from the year before.
It might surprise you, but consumers aren’t just buying their cosmetics and cleaning products online, they’re buying their groceries digitally too.
According to the Food Marketing Institute, nearly half of U.S. consumers purchase groceries online. This year, online grocery sales will become a $100 billion market, making up 20% of all grocery sales, with Amazon and Walmart leading by far as the top purchasing venues.
Many eCommerce retailers put their efforts towards improving CPG advertising strategies to reach masses and target customers. With current CPG advertising trends, online retailers underline unique features such as 1-hour lead time and free delivery through digital platforms.
Local supermarkets feel the pressure of ECommerce giants.
- 60% of U.S. Internet users purchase groceries and other packaged goods from Amazon.
The shift to eCommerce has a significant influence on the sales of consumer goods. So, it’s not a surprise that Amazon’s acquisition of Whole Foods has raised a red flag for supermarkets and CPG retailers.
Amazon Fresh, for example, offers options like same-day delivery and click-to-buy in many cities. If supermarkets don’t focus on effective CPG advertising strategies achieved by other big brands, this percentage will continue to rise. CPG companies that were once bolstered by scale are feeling the effects.
The study further suggests that local grocery stores are slow to adapt to emerging channels and shifts in consumer behavior. To compete with eCommerce giants, they need to speed up their digital convenience initiatives for online shoppers.
Multichannel CPG advertising strategies are dominating.
- Businesses that adopt omnichannel strategies achieve 91% greater customer retention rates compared to companies that don’t.
Experts reveal that multichannel CPG advertising trends are also a significant catalyst posing a threat to traditional models.
In a variety of marketing studies, the online plus offline CPG model offers the most value to shoppers of convenience, price, and choice. Several small brands have honed in on the online plus in-store model, establishing partnerships with various channels.
Successful eCommerce brands like Honest Company – which upended the cleaning and baby segment by capturing consumer interest in economic and sustainable products – are thriving on the shelves in-store with a major retail partnership.
Direct-to-consumer brands introduce new business models.
- Over 70% of consumers are looking out for new brands and products that make their lives easier.
- 76% of consumers enjoy an unexpected discovery during their shopping journey.
By using technology to interact with consumers in innovative ways, direct-to-consumer brands are carving out a fortune of the multi-trillion dollar industry.
Dollar Shave Club went from a viral video to doubling Gillette’s sales in just three years. How did they do it? By designing a subscription-based business model that addressed consumer pain points, DSC made the otherwise mundane act of buying a razor, hassle-free.
The theme here is simple – consumers today are open to the idea of making their lives easier and are willing to switch their loyalty to brands that address their needs. Digital CPG advertising trends capture ideal niche audiences, making it easier than ever to gain a foothold in the market.
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