Online sales of Consumer Packaged Goods (CPG) are growing
Consumer packaged goods (CPG), once purchased almost exclusively in stores, are quickly moving into the digital realm as more and more consumers are researching and purchasing CPG products online. Beauty and personal care products topped the online shopping list for consumers in the UK.
In all markets surveyed in the research from Periscope By McKinsey, the findings revealed that at least 70% of the respondents are undertaking some form of online CPG shopping activity, with French (40%) and UK (39%) consumers exhibiting the greatest balance of multichannel shopping preferences followed by German (33%) and US (32%) shoppers.
Non-edible and durable food items are performing considerably better than perishable products like dairy and bread, revealing shopper hesitation about purchasing these types of products online. Also, beauty and personal care products topped the shopping list for consumers in France (47%), the UK and Germany (46%), and the US (38%). Similarly, cleaning supplies were included in the “Top 4” product categories consumers had shopped online within the past two months.
Consumers are more likely to buy more in bulk online and are willing to spend more if they can identify discounts and offers. Price and free delivery were selected by consumers as the top two factors influencing their online CPG purchasing decisions. Promotions and discounts were a close third for consumers in every country except Germany, where 30% of respondents said product descriptions were the next most important factor likely to influence the choices they make.
Online is the future for CPG
A significant number of respondents noted that they plan to prioritise online channels when making CPG purchases. In fact, over a quarter of U.S. (27%), French (26%) and UK (26%) consumers surveyed indicated they will predominantly be shopping online in the future, with one-fifth of German shoppers saying this will be their preferred channel.
It should really be no surprise that shoppers are turning online with the rise of supermarket deliveries and more recently Amazon Pantry which has encouraged Prime customers to do their heavy and bulky shopping at the click of a button.
It’s interesting but somewhat understandable that there’s still a preference for perishable goods to be purchased instore, not just because the consumer can see the quality of the goods at the point of purchase but also because the shelf life is correspondingly shorter so purchase frequency will be higher. It’s clear that the goods that consumers are purchasing online are those they can either secure at a better price or bulk discount and have a reasonable shelf life.
What this means for online merchants is that the range of goods they can offer on marketplaces and their own websites is rapidly expanding from the traditional media, household, fashion, motors and sporting goods. If it’s got a shelf life and the price is competitive then consumers will purchase just about everything from baked beans and cat food to toilet roll, toothpaste and razors.
– Brian Elliott, managing partner at Periscope By McKinsey