eMarketer recently published a report on CPGs growing strength online. While some consumer goods companies famously entered the fray (and failed miserably) during the 90’s dotcom boom, many are now finding their stride online.
The report states that online CPG sales now stand at $12 billion; that’s triple what they were in 2004 according to Nielsen. By 2012, online CPG sales are expected to hit $16 billion, which would account for more than 3% of the total $475 billion in e-commerce sales projected for that year.
Those CPGs leading the online charge recognize the shift away from what Procter & Gamble defined in 2005 as the "First Moment of Truth" (FMOT) - the first interaction between a shopper and a product on a store's shelf. With the widespread adoption of the Internet and growing search engine usage, the first moment of truth often occurs before a consumer interacts directly with the company or official brand presence (either in store or online). This new interaction point has been coined the Zero Moment of Truth (ZMOT) in a great Google CPG Blog posting.
So how serious are CPGs about engaging and transacting with consumers online? Well the introduction of Alice.com last summer shows how CPGs are willing to come together on a single site with a single shopping cart and free shipping. This e-marketplace features over 150 manufacturers who are selling directly to consumers and includes such players as Johnson & Johnson, Nestle, Novartis, Bausch & Lomb, General Electric, Sara Lee and General Mills.
In addition, hopping on the location based services bandwagon, beverage maker Pepsi has announced that it will roll out two location-based mobile campaigns to offer discounts and loyalty points to consumers who use them to patronize nearby restaurant partners.
Pepsi Loot is an iPhone app that will direct users to nearby restaurants that serve Pepsi products. Users who find these locations or “Pepsi Pop Spots” will check in and earn loyalty points which can then be redeemed for music downloads, video content, and discount or free food offers from Pop Spot member restaurants. Pepsi has also signed an agreement to integrate its marketing offerings with Foursquare, the mobile social game that encourages users to check in to locations, post updates about their activities and earn badges for becoming highly engaged with the sites and merchants listed.
There’s little doubt that consumer goods companies are finding relevant ways to interact and transact with their customers online. For examples of consumer goods companies that Cactus Commerce has worked with visit our client section, or send an email to learn more about our CommerceLive solution.