CPG Industry Trend: Getting Ahead with Digital Media

Posted on February 8, 2018

For many CPG (Consumer Packaged Goods) companies, getting ahead means thinking outside of the box – far outside of it, in fact. Big corporations like L’Oreal, Pepsi, and Unilever, are already taking their big ideas and turning them into everything from artificial intelligence to virtual reality in order to stay in front of the competition.

More and more brands are following suit and hiring digitally focused employees while increasing their media spend by 30% as the industry continues to see a strong appetite for digital experiences. Diagnostics, digital enhancements, consultations, personalization, and live broadcasting are all an essential part of this CPG industry trend. It’s clear that open innovation supports the development and growth of brands of all sizes while bringing new ideas to life.

According to the World Economics Forum, CPG brands that invest in digital and technological branding transformations are set to gain $2.95 trillion in revenue and efficiency savings within the decade. Here’s how these companies are using their investment to grow their technology advertising as well as some challenges they may face along the way.

Partnering for Success

Big brands such as Mondelez, Campbell’s, Unilever, Proctor & Gamble, and L’Oreal have individually invested money into programs that work particularly close with entrepreneurs and startups to pilot developing technology via researches and tests.  

For example, Hellmann’s a subsidiary of Unilever, began testing grocery delivery with on-demand service Quiqup. This service allows consumers to order mayonnaise and other ingredients online and have them delivered directly to their house. This type of service competes directly with Amazon Fresh.

This is just one sampling of how CPG brands themselves are doing their own advertising to get in front of their customers without giving profits to giants like Amazon. Projects like that of Unilever help brands grow their businesses simply by seeing how a smaller business operates. Essentially, it’s a complete reversal of the traditional behaviors the market has seen for decades.

Partnering and investing in close-knit relationships with startups is paying off big time for large brands, yet only 28 percent of all CPG companies provide extensive resources for startups. Meaning necessities like money and offices aren’t provided, leaving a big gap in the program’s success. It’s a hefty financial investment that even the largest brands are weary to fully embrace.

Data-Based Shopping

It may be hard to believe, but ecommerce only makes up about one-third of all CPG sales. However savvy brands like Campbell’s, Proctor & Gamble, and so many others are seeing an opportunity in online channels. With 89 percent of growth in just one year (between 2016 and 2017) according to Nielsen, for many brands, it’s the next big step in their growth.

Of course, the challenge for these brands and those like them, is that the customer experience is still somewhat vague. There is still a gap between online and offline shopping leading CPG companies in the dark. Despite 85 percent of CPG companies using cookies to keep track of their customers’ digital activities, less than half of CPG brands utilize personalized data into offline experiences that emulate online shopping.

Again, CPG brands seeing the most growth are beefing up their own data capabilities instead of leaning on retailers like Wal-Mart or Amazon. Because the future for large corporations like Amazon, Wal-Mart, etc. is a little uncertain, it just makes more sense for brands to take the reins on their own data. Holding that type of information means unlimited growth potential.

Virtual Reality Store & Product Simulations

The pressure to stay on top of the latest product and industry trends, while also increasing sales in any given category and expand your customer base can be huge. Because of that, CPG brands are discovering how virtual store and product simulations can ease that pressure while offering the consumer a unique shopping experience.

Virtual reality helps create a positive consumer experience such as improved speed to market, the opportunity to let consumers see your new packaging before it actually hits the shelves. Additionally, manufacturers can better understand the impact various changes have on their sales and the bottom line. They can also evaluate new in-store ideas, with no threat from the competition while determining optimal layout and assortment for key retailers and channels.

Virtual reality simulations give CPG brands confidence when it comes to making category recommendations to retailers, with results that prove their ideas will move the needle for their particular brand and the category—ultimately enriching the shopper experience.

Digital Deliveries

From drones to autonomous vehicles that deliver products with real-time shipping notifications for shoppers, it’s clearer than ever that the future of CPG is in augmented reality and artificial intelligence. Using these capabilities, CPG brands are making the route from manufacturing to distribution more seamless and convenient.

One example is that of Anheuser-Busch, and their recent efforts at piloting Uber’s self-driving trucks to carry 52,000 cans of Budweiser 120 miles down a Colorado highway last year. Because that was so successful, the beer company is now partnering with Convoy, an online marketplace that matches shipments with truck drivers in real time.

There are still some tweaks that need to be worked out, and still only 28 percent of CPG companies are using this type of technology, but every day the efforts to use The Internet of Things is increasing. The more Amazon ups its digital game, and the more algorithms determine what people buy and how we optimize the supply chain, the more we will see these CPG industry trends continue.