Technology has made it easier and more convenient to shop, which is something brands can capitalize on when trying to reach new and existing consumers. As we’re halfway through 2020, this year’s prevailing trends indicate the lines between online and offline shopping have blurred. It’s not an “either/or” proposition, but rather a combination of the two. The brands that understand current trends and how to harmoniously integrate different channels will be the leaders.
Below, we’ll discuss CPG digital marketing trends like micro-influencers, ephemeral video, and third-party mobile shopping apps, along with some of the offline trends—like direct-to-consumer and same-day delivery—and how they intersect with the digital marketing landscape. No matter which combination of trends you implement as part of your marketing mix, the goal is to provide a seamless omni-channel experience that delivers the convenience, personalization, and quality customers have come to expect.
Direct-to-Consumer (DTC) brands are products, services, and experiences designed, produced, marketed, and sold by the same company, bypassing the retail channel. More than 40% of brands sell DTC in some capacity. The industry is growing year-over-year, expected to reach $130 billion by 2025.
Consumers flock to DTC models for a myriad of reasons. Some customers prize convenience and cost savings, while others appreciate the personalization and discovery aspects. DTC offerings cut out the time and hassle of browsing through retail stores, and generally boast exceptional customer service. Many models incorporate “VIP” services and provide exclusive access to rewards.
- Pay-Per-Result Marketing: Just as DTC strategies hinge upon quantifiable marketing, digital marketing relies upon securing a return on investment (ROI). The DTC method of performance marketing—paying only when a specific result is achieved—has inspired digital marketers to look at free trials, coupon codes, first-month discounts, and rewarded in-app content as ways of getting a shopper’s foot in the door.
- Subscription Services: DTC’s focus is not on the short-term sale, but on delivering continuous value. Likewise, digital advertisers for CPG brands are considering how to create and encourage direct subscription services that generate long-term sales. Though the DTC model has struggled with scale and profitability, the wildfire success of Nike, Disney, and Kellogg’s forays into DTC has many CPG brands taking a deeper look at the model.
- Personalization: Lastly, shoppers delight in the personalization available with DTC brands. CPG brands would be wise to emphasize similar options on their websites and email correspondences. By using quizzes, custom gamified experiences, and augmented reality (AR), brands are able to tailor their offerings and messages directly to the individual.
Marketers used to fret that “retail is dead,” and that eCommerce would take over the world. We now know that’s simply not true.
Although online sales increased another 17.9% from 2018 to 2019, shoppers still enjoy in-store experiences. They love to touch and feel items in person, get out of the house, talk to store associates, and experience the instant gratification of purchasing a product and having it immediately available for use.
Nevertheless, blurring the line between in-store and digital retail is an increasingly important trend. Social commerce and digital ad spend are still being budgeted for, but CPG executives are also investing in new tools like Instagram Shopping posts, mobile apps, artificial intelligence (AI), and AR tech in physical store locations, as well as automated or mobile checkout to remain aligned with future trends.
Specifically for digital strategies, an emphasis has been placed upon micro-influencers, ephemeral videos, and third-party mobile shopping apps to deliver experiences customers want at home and in-store.
Years of high-profile scandals, frauds, and fakes has brought the macro-influencer industry to its knees.
Only 4% of people trust what paid social media influencers say. A study by Stackla found that people are 9.8x more likely to make a purchase based on a social media friend’ recommendation, rather than a high-profile influencer. As it turns out, real people have real influence.
There are a number of ways CPG brands are engaging micro-influencers. They’re monitoring hashtags, responding to mentions, and using new tools to find, engage, and reward organic advocates and unofficial ambassadors. Some strategies include:
- Running inspirational contests and giveaways.
- Giving out promotional items and goods like free swag.
- Offering VIP experiences.
- Inviting members to join their communities.
It may not be as simple as paying a celebrity with millions of followers for a promotion, but the micro-influencer pitch works wonders for increasing authenticity and trust.
Content is diversifying in new ways. Long-lasting “evergreen” content used to be the standard, but now consumers have demonstrated a demand for short, fresh, relevant videos.
The word “ephemeral” is an eloquent way of saying “short-lived.” Think Instagram Stories, Snapchat, or TikTok videos, for instance. Engaging visual clips that appear today, but are gone tomorrow, create a sense of urgency and FOMO (Fear Of Missing Out).
With over 500 million active users in 2019, TikTok is a popular platform (particularly for Gen Z) that attracted CPG brands like Kind, Red Bull, Kool-Aid, Pepsi, and Lay’s.
CPG brands can use these platforms in a more casual, interactive way. They might offer a behind-the-scenes glimpse of the company, ask a live poll, countdown to an upcoming event, or create a contest.
Third-Party Mobile Apps
With 85% of customers using smartphones while shopping in-store, we can safely assume apps are now a staple element in the path to purchase.
Third-party shopping apps are an easy, accessible, and affordable foray into this burgeoning market. Instead of developing a constant stream of app content, brands only need to create campaigns, which they can test, alter, and change as they please.
Through Shopkick, clients’ campaigns have delivered noticeable ROI and increases in brand favorability thus far.
For instance, when Claritin partnered with Shopkick, they achieved a 4:1 ROI on their campaign during the busy allergy season. By the end of the campaign, 28 million impressions were made, and 59% of consumers who went on to purchase the product originally had no plans to.
Same-Day Delivery and BOPIS
Consumers’ desire for instant gratification is well-known, but now brands have the tools and technologies to facilitate this desire like never before. In a startling move, Amazon announced that their Prime two-day shipping guarantee would soon become a one-day shipping guarantee in 2019. This announcement made waves as retailers sought ways to compete.
Kohl’s, Best Buy, Macy’s, and Target went one step further and made same-day delivery available, while Apple and Walmart went on to offer next-day delivery. Many supermarkets used (and continue to use) Instacart to facilitate immediate order fulfillment or developed their own proprietary system.
Over the past year, we’ve seen a considerable rise in stores offering BOPIS (Buy Online Pick Up In Store). CPG brands have responded by finetuning their supply chains to keep products moving fluidly from the warehouse to the store.
The coronavirus pandemic placed a high premium on quick delivery, particularly among cleaning supply brands, meat products, and other household staples. CPG brands adapted by reallocating resources from traditional media and other investments to digital eCommerce strategies like grocery delivery and in-store pickup.
Shopkick is a third-party shopping app that partners with CPG brands to deliver incremental sales, ROI, product awareness, and brand affinity. Users spend an average of two hours per month watching partner brand videos, flipping through curated lookbooks, locating products at-shelf, and purchasing campaign items in exchange for reward points (“kicks”). Read a few success stories or contact our team to learn how you can benefit from these new CPG digital marketing trends.