How COVID-19 Has Impacted Some CPG Strategies

Posted by Greg Keating on Sep 2, 2020 11:31:50 AM

Person pushing a shopping cart in a grocery store.

CPG marketing is in for another wild ride as COVID-19 continues to change how consumers shop and buy. Amazon is now officially the King of the World, as more consumers increasingly shop online instead of going out into the public.

About 31% of households, or 40-million consumers, use online grocery shopping and at-home delivery instead of venturing out. It is truly an interesting time for CPG branding and marketing. How have these coronavirus-fueled shifts in consumer behavior created new DTC opportunities for brands?

CPG Marketing During COVID-19

One of the most significant shifts in consumer behavior is the move online. What we’ve seen is that consumers are now less “into” CPG branding, discarding what were once must-have brands for products they can find easily and that ship quickly online. So much for consumer loyalty, right? CPG companies must now evolve their DTC channels to counteract any losses from traditional approaches.

There are some easy fixes for CPG marketers as they evolve their DTC strategies. For example, the simple addition of a “Where to buy online” on some (or all) of their popular brands could open new revenue streams. New partnerships between traditional brands and DTC eCommerce companies will also likely emerge in the coming months. CPG companies should also build a network of distributors, suppliers, and adjacent partners to help them respond to consumer demands.

CPG marketing teams must move beyond brick and mortar to meet the growing demand for online purchases. This is particularly important as we march inexorably toward cold and flu season and a possible reemergence of COVID-19 clusters.

For companies that cannot keep up with online demand, changes to the supply chain, and even the software that powers their eCommerce response will likely need to occur. Providing consumers with replenishment timelines is the bare minimum for CPG marketing and operations teams. Directing consumers to an alternative item at a local retailer or within your product line is also a good way to respond to a high-demand scenario.Tablet with icons floating above it.

Pivoting to a DTC Approach

Another shift in consumer behavior is the urge to stock up on supplies like a chipmunk loads up on peanuts for cold weather. CPG companies should create DTC subscription services with warehouse-style deals to fit their target markets. Consumers will appreciate the value and respond positively.

Many CPG companies have been slower to adopt a brand-specific DTC approach. This hurt companies like Coke, who relied heavily on sales from sporting events, vending machines, theatres, musicals, and more. Restaurant sales also declined in the first and second quarters. Many similar-sized CPG brands also felt an economic pinch from the quarantine. 

One thing is clear, though; these brands must improve their DTC strategies in the coming months. Consumer behavior continues to change during COVID-19, but it seems the shift to eCommerce is here to stay for a while. To create added security for your CPG brand, it seems like an omnichannel focus is likely the best way to navigate the deep and shifting waters we find ourselves in these days.

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