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CPG brands are getting serious about channel management

by | Jul 18, 2017 | Marketing, Public Relations

Consumer goods companies are learning from traditional e-commerce retailers when it comes to their use of online customer and competitor insights to understand buying patterns, price sensitivity, new competitive product offerings and improve category management for e-commerce channels.

Ninety-one percent of respondents to a new survey see e-commerce as a strategic priority, and 57 percent are investing in eCategory management to support fast-paced growth in online market share, by better understanding and reacting to the online consumer, according to new research from marketing optimization firm Periscope By McKinsey.

However, the survey also showed that for the overwhelming majority of consumer goods companies (75 percent), the journey towards using advanced eCategory management capabilities to inform product assortment, pricing and promotional decision making in online channels, is only just beginning.

CPG brands are getting serious about channel management

The survey, conducted at the recent Consumer Goods Sales & Marketing Summit 2017, benchmarked online assortment, merchandizing, pricing and promotions optimization technology across consumer goods companies. It also investigated how companies use online customer behavior and preferences to inform digital marketing, product purchasing and promotional decisions, as part of an integrated multichannel game plan.

Building e-commerce capabilities are a top priority

An impressive 91 percent of respondents said building eCommerce capabilities was a top strategic priority for their business, highlighting that digital commerce is now viewed as a growth engine by the majority of Consumer Goods companies.

Asked to rank how important it is to acquire these capabilities, 15 percent said it was viewed as the #1 priority for their company; 58 percent said it was a top three priority; and 18 percent identified it as being a top five business priority.

What’s driving the consumer goods change?

Asked about the reasons for improving their capabilities, the need for customer centricity echoed throughout the findings: Evolving consumer needs and expectations was the top reason for 81 percent of respondents. This was followed by the desire to build a channel for direct customer interaction (45 percent), and the ability to leverage digital to raise brand awareness or control online representation (42 percent).

Moving towards eCategory management

While 48 percent of respondents ranked building eCategory management capabilities as a key priority for senior management and 30 percent said it was vital for their sales teams, just 22 percent of the companies surveyed were already up and running with their eCategory management initiatives. 61 percent said that gathering online consumer and shopper insights was the main focus of their efforts to implement eCategory management.

CPG brands are getting serious about channel management

Consumer goods brands are battling themselves to move forward

When it comes to pursuing their eCategory management ambitions, Consumer Goods companies face a raft of operational and technical challenges.

Getting the right system architecture in place was proving a problem for 50 percent of those surveyed, while the lack of a fully functioning e-commerce platform and/or the scarcity of reliable data on online shoppers were a barrier for 46 percent.

“Digital technology is dramatically changing shopping behaviors and forces consumer goods companies to reinvent their approach to channel management,” said Paul Thompson, vice president and global sector general manager of consumer goods at Periscope By McKinsey,, in a news release.

“Companies need to rapidly build eCategory Management capabilities, that utilize insights from online customers’ behaviors and preferences to drive revenue lifting pricing, promotions and category innovations,” he added. “Advanced and prescriptive analytics solutions are key technology components for companies to understand and attract the millennial buyer.”

Download a full copy of the report here.

CPG brands are getting serious about channel management

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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