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Marketers of consumer goods used to have the luxury of pretending that e-commerce was a nice-to-have capability. But with e-commerce sales more than doubling globally during the past 5 years—and expected to double again by 2014—it doesn’t matter what products are in your portfolio, selling to consumers requires an e-commerce strategy.

Today the battle for market share has expanded from shelf space to mind space, and the new winners have figured out how to engage consumers at multiple points of purchase that increasingly have nothing to do with a brick and mortar visit. Consider these global e-commerce trends:

+ US e-commerce sales will grow 62% by 2016, to USD 327 billion (Source: Forrester, February 2012).
+ European e-commerce sales will grow by 78% by 2016, to USD 230 billion (Source: Forrester, February 2012).
+ Brazilian e-commerce sales will grow 21.9% in 2012 to USD 18.7 billion (Source: eMarketer, January 2012).
+ Chinese e-commerce sales were CNY 780 billion (USD 124 billion) in 2011, an increase of 66% from 2010. E-commerce is expected to rise from 3% of consumption to 7% by 2015 (Source: IDC, March 2012).
+ India’s e-commerce market is expected to grow to USD 70 billion by 2020, from just USD 600 million in 2011 (Source: Technopak Advisors, February 2012).
+ Indonesian e-commerce sales are forecast to grow from USD 120 million in 2010 to USD 650 million by 2015 (Source: Frost & Sullivan, February 2012).

In the midst of this revolution, shopping behavior is shifting from a location-specific experience to a “everywhen” experience, where brands are expected to be part of conversations and other digitally-enabled experiences that now define the modern consumer’s muti-dimensional path to purchase.

“We’re all E-Commerce Companies Now,” said Bonin Bough, VP of Global Media at Kraft Food, in a guest blog at the Harvard Business Review this month. He wrote, “e-commerce is not so much a business model as an essential approach to engage consumers. If your company sells a product online, regardless of how it’s delivered, you are an e-commerce company.”

As manufacturers negotiate the balance between nurturing traditional sales and distribution channels while leveraging new opportunities to deal directly with consumers, traditional marketing models have given way to a multi-channel paradigm defined nicely by 4 principles outlined by Trendwatching.com:

#1 – E is for everywhere: Constantly connected consumers see the online purchase option as simply another valid means to an end.
#2 – Retail is Me-tail: The rising trend of curation, socially-informed shopping, DIY retail business and always-on customer service means marketers have to create personalized experiences to compete.
#3 – Easy Commerce: Traditionally barriers to checkout around delivery, payment and returns have largely been removed from today’s online shopping experience, making consumers more likely than ever to consider the e-commerce option.
#4 – The Wonderful Web: Increasingly gratifying and differentiated web experiences have set a new benchmark for consumer expectations. Endless choice, instant gratification, and total transparency have created norms that brick-and-mortar retailers will struggle to match.

Marketers of Consumer Goods are facing incredible pressure (and opportunity) from consumer expectations that have been redefined by digital experiences. How a brand develops and executes its digital experience strategy is increasingly the best measure of its business success. A 2012 study by Accenture found that the highest performing CPG brands globally were differentiated by three key features: 1) Flexible and low cost operations; 2) Customer and Channel Management; and most interestingly 3) Insight-driven marketing. Its this third quality—insights—where digital channels have the most to offer today’s CPG marketers. The rapidly maturing field of web analytics offers unprecedented opportunities for marketers to know their consumers in ways never before possible. And winning brands have figured out how to harness online data not just for the purpose of providing personalized online experiences, but also for the benefit of more meaningful off-line brand interactions.

Tags: consumer packaged goods

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