Food Executives, to Your E-Commerce Starting Blocks

In Technology, Trends by Heather Brown0 Comments

It looks like the food industry can add e-commerce to its list of smart capital investments for 2016.

Half of all market growth is now online, more for certain categories and markets. It’s a “winner-take-all world” for CPG, according to this just-released report from the Grocery Manufacturers Association (GMA) and The Boston Consulting Group (BCG).

The report recommends that all CPG companies have a digital foundation in place. This includes implementing an integrated strategy, revisiting and revamping category management and supply chain configuration, and developing adaptive organizational tools.

The new set of factors at work in this digital world are fourfold:

  • There’s a disproportionate influence of a few business models.
  • It’s a new game, with new rules, requiring new skills.
  • Early-adopting consumers are already settling into patterns of digital buying behavior.
  • Initial success in these markets will breed exponential success long-term

Companies poised for swift adoption can follow these 6 plans the GMA outlines to win this e-commerce race while there’s space to be won.

Gain the shelf space

Your internet inventory may be vast, but internet shelf space is limited. Screens will show 6 choices at most and fewer on a mobile device. Most consumers (94%) won’t go past the first page of results, and those top spots are highly sticky. To claim your spot, target your activity to the specific algorithms of individual retailers.

Make friends with Amazon

Amazon’s poised and ready to feast on the food and beverage market, according to research cited by Bloomberg. Their goals and processes differ greatly from your traditional retail partnerships. They offer optimal price, selection, and convenience, and they’re targeting multiple brick-and-mortar formats. Adhering to Amazon’s content management and service levels will strengthen your stake overall. If you’re a big player, your expertise is also valuable to Amazon, and their Strategic Vendor Services provides one way to build a dedicated relationship.

Get click-and-collect capable

As click and collect models gain popularity, retailers will need active collaboration from suppliers to get the logistics right. Click and collect disrupts traditional impulse and fresh food purchase categories. Suppliers will need to respond with agility to retailers’ changing demands, especially when it comes to “dark” stores and other back-end models available to retail employees preparing orders for pickup.

Be present, not perfect

In the digital realm, your success will depend on showing up, not on bringing the perfect model. Concentrate resources on clear winners (like mobile), as well as thinking in terms of ACV (all-commodity volume) across digital platforms. Join the established players and take chances on new formats where you can gain scale and leverage. Stay ready to reprioritize in the areas where your efforts see growth.

RELATED  5 Smartest Food Industry Investments for Growth in 2016

Restyle your brand

Your brand persona now consists of an array of individual online, off-line, and in-store interactions that consumers encounter in every stage of their purchasing journey. In an age of digital proliferation, the key to reaching customers is to find them with your brand at uniquely relevant “touch points” throughout their day. Traditional segmentation and differential approaches are obsolete. Even within specific demographics, consumers will have different reactions to your strategies. To reach them most effectively, you need to deliver the right content through the right channel at the right moment.

Lead aggressively

This F&B e-commerce game is like a race, and it will be won by those who know the course best. The leadership in charge of your e-commerce initiative will need to be nimble and aggressive, says the GMA. They’ll need to be willing to keep an ear to the ground for changing trends, to risk boldly and to venture into uncharted territory as a team. Your digital business may need to comprise up to 10% of your total business, and that leaves no room for timidity or tepid decision-making.

The GMA/BCG report is the first in a series that will build on a larger publication, The Digital Future: A Game Plan for Consumer Packaged Goods, which was first released in August of 2014. The research is conducted collaboratively, but BCG is solely responsible for all analyses, conclusions, and recommendations.

Leave a Comment