cpg food This is a topic that many people are looking for. thetruthaboutdow.org is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, thetruthaboutdow.org would like to introduce to you Tompkins Spark Talk – Successful D2C Strategies for CPG Brands. Following along are instructions in the video below:
“Name is john lowe. I m a principal at thompkins international. The topic of this this presentation is successfully navigating the ever changing cpg industry. Let s start by looking at some of the major trends that shaped 2018 as well as i was occurring in the cpg industry.
Today. The first major trend is that online sales continue to grow rapidly in the cpg. Industry last year. Online cpg sales grew.
354. And totaled. Fifty eight point six billion dollars representing 11 of the total cpg sales in 2018 online grocery sales are forecasted to make up 20 of all grocery sales or 100 billion dollars by 2025. The second major trend is that we re continuing to see smaller cpg companies taking a bigger piece of the pie.
The rise in e commerce. Sales has made it easier for startups and smaller brands to enter the market according to nielsen data 16000. Smaller manufacturers with combined sales of a hundred and forty five billion dollars increased their collective market share from 17 percent to 19 percent from 2012 to 2017 conversely. The collective market share of 16 of the largest cpg manufacturers with combined sales of 233 billion dollars.
Declined from 33 to 31 percent. During that same time period. The large cpg whales are being nibbled to death by thousands of minnow challenger brands. The success of smaller cpg manufacturers and the rise in online shopping also helped drive the global mergers and acquisitions activity.
Among the top 50 cpg companies to a 15 year high in 2017. Jumping. 45. According to an annual report by oclc strategy consultants.
Among the most attractive investments for cpg. Giants are health food products and direct to consumer startups including subscription boxes. Like dollar. Shave club.
Which unilever purchased in 2016. After the niche company achieved double. The online sales of gillette in just three years and the quest to develop a ttc channel rapidly many companies about to to accelerate the cycle by acquiring smaller brands with these capabilities versus growing channel capabilities organically the last major trend is at private label brands are making larger waves than ever before in the cpg industry. While in years past.
These brands were viewed as cheaper generic products. The value proposition. Is changing as private label. Brands are now differentiating.
Themselves through innovation and packaging quality and data. Today. More than half of shoppers visit a retailer specifically to purchase their private label brands while 85 of shoppers. Trust private label brands as much as national manufacturer brands.
According to research by damon this leads to the line between partnership and competition being blurred more than ever before often at the expense of the smaller cpg brands. So what are some of the major challenges. Facing cpg brands. Today.
The first is what is commonly referred to as the amazon effect with the purchase of whole foods in the expansion of amazon fresh and amazon pantry amazon is upping. The ante for retailers and cpg companies forcing them to reduce cost increase selection and improve speed. This is leading many large retailers to offer online ordering and delivery curbside and kiosk pickup and other purchasing options to enhance the customer experience and remain competitive in today s market. These power moves by major retailers create continued margin pressure for cpg companies as they re constantly pushed to reduce prices cut back on advertising or reduce costs within their supply chain mastering.
An omni channel. Approach also continues to be a struggle for retailers and cpg companies. Alike. As amazon continues to raise the bar for customer experience.
Today s customers expect to seamlessly integrated digital and physical experience for product awareness and research to purchase and pickup or delivery. The challenge is meeting choice speed and service requirements in a profitable. Way forecasting requires channel inventory levels and placement and blending inventory and fulfillment into a single store or distribution center footprint is difficult to execute due to software material. Handling and labor challenges as consumer demands are constantly shifting so are their buying habits.
Accurate intelligible data is critical for driving growth and improving profitability and market share. The challenge for cpg manufacturers lies in access and interpretation of data. Many cpg companies rely on retailers and syndicated market data. Which lacked the meaningful insights needed to optimize inventory marketing and sales across channels.
Even when armed with accurate data. Many cpg manufacturers are struggling to transform that data into actionable insights to drive better business decisions. So how does cpg brands compete in this new environment. While cpg companies are faced with a myriad of challenges in today s ever changing consumer landscape.
These challenges have also created a wealth of opportunities under pressure to reduce costs improve the customer experience and address the challenges. Just discussed. Many brands are beginning to employ a d2c model according to recent research by brightpearl eighty seven percent of retail brands in the us and uk plan to launch a dtc channel. At some point in the future and 23 aim to do so before the end of this year.
Let s take a look at some of the major benefits. Cpg manufacturers are achieving with the dtc approach. One of the biggest and most obvious reasons for embracing a dtc model is cost and efficiency by cutting out the middleman or retailer. You avoid paying hefty markup fees a cost savings that can improve your bottom line.
And also be passed on to consumers to gain a competitive pricing advantage someone directly to consumers also creates a more efficient logistics operation by streamlining distribution thus reducing shipping costs and increasing delivery speeds. The dtc model also provides cpg manufacturers with full control over the brand experience in a traditional retail model. The manufacturer has very little if any input on how their product is sold everything from pricing and marketing to delivery and customer service. Is handled directly by the retailer with the d2c approach.
The cpg manufacturer retains complete into m control over the customer relationship and experience from the moment. The consumer first discovers the product up until it ends up in their hands. Data. And predictive analytics are a significant challenge.
But also a tremendous opportunity area for cpg companies. When using a dtc model. Cpg brands have access to valuable customer and merchandising data by fully owning the customer relationship. Cpg manufacturers are able to collect and analyze a wide range of data that can be used to create a more personalized experience.
As well as improve supply chain operations including demand. Forecasting and inventory. Optimization access to customer data also enables cpg brands to provide faster targeted innovation based on consumer preferences building. A dtc strategy from scratch is a complicated task for any cpg manufacturer for companies that lack the in house resources and capabilities to build and manage a dtc strategy.
There are a handful of integrated and cost effective solutions available at nexus fx. We partner with brands to help develop and execute their dtc strategy and business models including designing the customer experience. Launching. New personalized and seasonal skus and executing marketing campaigns and promotions.
Nexus. Fx. Also provides order fulfillment and delivery through our partner network. As well.
As data analytics to serve as a true end to end d2c solution for cpg brands. Let s discuss some examples of cpg companies. We ve assisted in a opting. A dtc strategy.
Dub developed an exclusive dtc channel to sell personalized baby. Devolution and body wash customers could create personalized products based on dubs mobile. Responsive bilingual ecommerce site and have them delivered anywhere in canada. The products were stored in a warehouse where the name labels could be printed on demand and shipped anywhere in canada unilever also utilized this dtc model when it launched personalized vaseline.
Lipton s. When ben and jerry s launched their new line of vegan ice cream. They developed an e commerce website. Showcasing the five new flavors they utilized a supply chain where cases of ice cream were stored in cooling units in a warehouse and delivered on demand by a branded delivery fleet of more than 40 brand ambassadors and drivers customers could track their order in real time via their mobile device and receive text message updates when their order was on its way as a result of this d2c approached ben jerry s experienced an average delivery time of 8 minutes average customer rating of.
48 out of 5 and less than 05. Waste to support its winter holiday. And mother s day marketing campaigns. Chad willy s launched.
An e commerce site. Where customers could order special wooden gift boxes of its frozen apple blossoms for their loved ones. The frozen products were stored in warehouses with insulated packaging and a scheduled delivery mechanism was utilized for corporate and residential deliveries across the greater toronto area while the cpg landscape is constantly shifting there are ways for you to navigate and excel in this ever. Changing environment and we wish all of you the best of success on your journey.
Thank you for your time contact us to learn more ” ..
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