How retail ecommerce directly & indirectly impacts CPG brands

The impact that ecommerce can have on a brand’s growth is undeniable. The direct value that comes from the channel is only the tip of the iceberg, however. The indirect value - especially when considering retail ecommerce - is significant. Read on to gain a greater understanding of the direct and indirect effects the ecommerce channel has on your business.
Measuring the direct value of ecommerce

When the U.S. Department of Commerce declared a 1.7% decline in ecommerce sales between Q3 2021 to Q4 2021, it caused companies to understandably question where they were investing their efforts.

Everyone assumed the COVID-19 pandemic would shift consumer habits to almost exclusively online. Are people shifting back to pre-pandemic shopping habits?

Not entirely.

  • Ecommerce continues to steadily increase
    According to eMarketer, ecommerce will encompass 20% of retail sales in the U.S. (that’s $1 in every $5).
Source: Profitero

  • Ecommerce is becoming essential to retailers
    Retailers are shifting away from physical spaces and capitalizing on new shoppability opportunities through ecommerce. Curbside pickup (or Click & Collect) is currently the most popular way for customers to grocery shop. 57% of U.S. consumers used curbside pickup services in November 2021, up dramatically from 39% in November 2020, according to Brick Meets Click data. This massive increase in buy online pick up in-store (BOPIS) underscores how big the omnichannel shopping experience has become.

numer of stores offering online grocery services by fulfillment modality
Source: Profitero

Measuring the indirect value of ecommerce

Yes, the direct value of ecommerce at retail is growing. No, you shouldn’t pull back from investing in this space. But it’s not enough to only measure the direct value of the channel. Three major indirect ecommerce impacts also exist:

  • Digitally influenced retail sales
    Digitally influenced sales refer to any transaction where a consumer has had a digital touchpoint, regardless of if the sale actually happens online or in-store. For example, a shopper sees a Facebook ad for a cleaning product at Target on Monday. On Friday when they happen to be at Target picking up cat food, they pass the cleaning aisle, recognize the brand from the ad, and decide to buy the product. Incremental sales at retail indicate that your digital efforts are aiding your in-store transactions.

    Retail Media Networks are also influencing in-store sales. A study by The Digital Shelf Institute found that for every dollar consumers spend online as a result of retail media campaigns, another $7 to $11 was spent offline in stores.

    According to GE Capital Retail Bank, 81% of consumers are researching products online prior to purchasing, even if the purchase is made in store. According to MFour, for larger items or bigger purchases, 96% of people research online before buying - giving you ample opportunity to advertise to and capture a digital audience of retail shoppers.

    Smartphones have allowed consumers digital accessibility to coupons, product descriptions, reviews, etc. They’ve also armed consumers with access to those resources while walking the aisles of a brick-and-mortar retail space. According to a recent webinar, 82% of Walmart shoppers are using the Walmart app while shopping in-store.
  • Overall audience expansion
    The expansion of social media and online advertising will lead to a subsequent expansion of your audience. So, it’s important to think about your digital investments in tandem with a larger brand strategy.

    Online shoppers now are part of a digitally native generation. Winning sales online with new, younger shoppers, especially as their purchasing power increases, could be worth substantially more than your traditional brick-and-mortar demographic from a future lifetime value standpoint.
Source: Profitero

  • Greater lifetime value
    Brand loyalty online is much greater than it is offline. According to the EY Future Consumer Index, nearly 50% of shoppers are using the “repeat past order” function to reorder groceries. Consumers are more likely to use their purchase history to shop than the search function, which means offering an experience of convenience and remaining relevant in shopping carts can lead to greater customer loyalty and LTV for your brand.

So, what should you consider next for your retail ecommerce strategy?
  • Don’t pull back on retail ecommerce investments. Elevate your shoppable media campaigns and provide customers with clear paths to purchase online and at their preferred local retailers.
  • Upgrade your digital shelf space. Your PDPs, store locator, and all owned media are far more dynamic than space in a physical store. Make sure you’re utilizing them to their full potential.
  • Get on the digital shopping list - early. Online shoppers are sticky, and getting into retail ecommerce carts through a frictionless shopping experience now will have a clear long term, repeat purchasing advantage.
  • Partner with a platform that provides insights that help you optimize marketing efforts and continue to scale through retail ecomm.

Pear Commerce is the only retail ecommerce platform that connects CPGs to 3,000+ retailers, converting shoppable media into actionable insights that fuel performance marketing.

Get in touch with our team to learn how our shoppable tools, real-time inventory scanning (at any retailer), and actionable insights can provide you with direct-to-consumer level performance marketing capabilities through retail ecommerce.

Retail ecomm for omnichannel brands
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The Retail Ecommerce Playbook by Pear Commerce

Your guide to capturing greater share of wallet at retail.

Five years ago, retail ecommerce didn’t exist. Today, supporting the channel is table stakes for consumer packaged goods brands.

This playbook is designed to guide CPG brands from the stages of awareness to purchase at retail. Whether you’re interested in retail ecommerce as a new channel opportunity or looking to level up existing efforts, The Retail Ecommerce Playbook covers tools, tips, and examples to help your brand succeed.