Consumer packaged goods (CPG) companies are the pioneers of traditional advertising that created the TV, print and out-of-home ad.
They invested in all the right places, focused on consumer insights, and were (and still are) experts at building brands that consumers love. They are the most innovative players when it comes to trying new media and leveraging first-to-market opportunities.
However, digital has changed the playing field for CPG brands, bringing new marketing challenges. One of the biggest challenges for them in digital is that most CPG manufacturers do not sell directly to consumers.
Instead, they drive consumers to eRetailers like Amazon and local retailers like Target, Walmart and regional grocers. Why? Because they are their best customers; they are the ones that get the products on the shelves and in front of the consumers. With some rare exceptions, the majority of the CPG revenue is still being generated on the traditional store shelves (for now …).
This causes a gap in measurements of a digital campaign’s success; it is hard to truly measure the ROI or campaign performance when you can’t identify why a person picked up a bottle of shampoo at their local CVS. This challenge has made it difficult for some CPG brands to invest at sufficient levels when it comes to digital.
Given these marketing challenges, I see the future of search for CPGs as a very exciting field with a lot of opportunity to truly innovate. Based on my own experience, I believe that there are three dramatic changes on the horizon that will truly impact how marketers and brands sell consumer packaged goods online.
1. Selective Research
Consumers have become smarter and more aware of the choices they are making when researching and purchasing a product. A big change in search behavior that I’ve seen over the past years is their preferred search engine. While Google is still the #1 search engine in the US, consumers have started to use other engines for their product and category queries.
They know that in order to find a product they need, they should go to Amazon and similar sites to compare pricing, ratings and reviews — just like they know to go directly to YouTube for how-to and instructional videos, or to use Pinterest for inspirational visual content.
This adjustment in search behavior means that going forward, brands need to make sure they target the right audiences and queries in order to truly connect with the consumer in the right context with the right message.
Don’t get me wrong, Google is still a behemoth and its use will only grow, but consumer packaged goods will be found more via “lifestyle / question” based search engines.
2. Making The Purchase
When it comes to making the purchase, consumers go straight to Amazon and other e-commerce sites to complete their journey. Since this is the actual moment of truth, having a dedicated search strategy for these eRetailers has become crucial.
One important part of that strategy is to optimize your SKU database inside the eRetailer sites (often it is the same database that is being syndicated to Amazon, Walmart, CVS, etc.). Treat the SKU database just like any other web page. Make sure you are using the right keywords, optimize the content for a best-in-class user experience, and measure and optimize the SKUs’ rankings like you would any other page.
Second, it is crucial to think beyond the owned portion. Often, people are not aware that the majority of eRetailers are actually offering paid search or paid display solutions. This allows marketers and brands to serve their own ads inside the eRetailer sites based on products viewed or queries executed.
This is a giant opportunity for brands to connect with the consumers at the moment they are ready to make the purchase. On top of the obviously perfect timing, it also enables the brands to measure success against their spend, as you can get conversion data and other success metrics from the platforms.
I believe we will see a lot of innovation coming from the retailers and platforms in this area.
3. Change In Strategy
Cost-per-click and competition are higher than ever across most CPGs; therefore, it is becoming harder and harder for brands to compete with Amazon and other mega retailers efficiently.
The former’s sheer volume of content, market share and ability to drive up pricing makes it very difficult to spend $10 on a click for a $5 package of toilet paper. The cost per acquisition is simply too high for some brands. Therefore, brands need to start thinking about their strategy differently and develop content that builds meaningful relationships with their consumers.
One great example of such a strategy is being employed by baby care brands. Baby care brands produce a lot of engaging content related to pregnancy. Why? Because instead of trying to compete for diaper sales, they are trying to build meaningful relationships with mothers before they ever need to buy their first diaper.
Once the new mother is in the store to purchase that first diaper, she will pick the baby care brand she has gotten to know and trust over the past nine months. The relationship she developed with the brand online converts to an offline sale.
Final Thoughts
As you can see, the rise of Amazon and other eRetailers, along with an increase in consumer savviness, is making CPG search a very interesting (and revitalized) field to play in. How brands engage with consumers in buyers’ preferred search boxes, and the relationships they build with them, will affect consumer purchase behavior both online and in stores.
We will see how the marketplace evolves over time, but I am excited about the many changes occurring in response to consumers’ shifting search and purchase behavior. Finally, we’ll be able to clearly measure the value of a search visit for a CPG manufacturer.
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