There is No One-Size-Fits-All Strategy in e-Commerce

There is No One-Size-Fits-All Strategy in e-Commerce

As futuristic as it may once have sounded, having drones fly through the sky and deliver packaged groceries and other items to consumers’ doorsteps isn’t too far off in the future. is already hard at work on making this a reality, investing heavily in this technology to make same-day delivery a reality for its millions of customers. Flying drones aren’t landing tomorrow, but companies, brands and retailers are steadily devising digital strategies to meet evolving consumer needs and demands.

When it comes to U.S. consumer packaged goods (CPG), e-commerce is still in its infancy, accounting for roughly 4 percent of total CPG sales. The upshot, however, is that it’s growing at an unparalleled rate of more than 20 percent compounded annually. As companies like Amazon work to eliminate one of the key barriers to online shopping—having to wait for your purchase—the digital channel will capture a much larger share of sales in the future.

With increasing media fragmentation, changes in the retailing landscape, and rapid growth in tablet and smartphone ownership, Nielsen expects purchase patterns to change significantly in the next 10 years. And that’s why retailers and manufacturers need to be strategic as they develop their digital platforms. In fact, believing that all digital shoppers are the same—and devising a one dimensional e-commerce strategy as a result—would be a mistake.

Engaging All Digital Shoppers

Despite the momentous growth of e-commerce in the U.S., only 30 percent of people shop for CPG digitally. And only half of these shoppers buy consumer products online. The rest use digital methods for information, research and price comparing. Ultimately, this group largely still makes its purchases offline. Understanding a shopper’s needs both on-and-offline is critical to strengthening a business across channels.

To better understand the breadth of shopper needs, Nielsen has identified seven digital segments, each with its own unique set of attitudes and purchase behavior. The segments range from technology-averse shoppers, who only shop digitally out of necessity, to digital advocates, who believe there are more advantages to shopping and buying digitally than in an offline environment.

For instance, the “non-planners” segment—those who often dash into a store and decide what to buy once they are there—currently spend 11 percent more in drug and mass channels and 25 percent more in convenience. “non-planners” don’t yet see digital as more convenient than brick-and-mortar, but do trust the online buying process and often feel there is better assortment and more value online. As the online market continues to evolve, retailers should keep a pulse on this segment:

  • ”Non-planners” are open to the idea of buying digitally (they make up 15% of total digital CPG shoppers) and they could shift their perceptions and shopping patterns if convenience for online retailers can meet what they are currently getting from brick-and-mortar (e.g., same-day delivery, ease of finding and paying for products, shopping list for ease of ordering etc.).
  • “Non-planners” spend about the same per trip when they shop online ($30 per trip) as when they shop in brick-and-mortar locations ($33 per trip). If a retailer can appeal to this shopper segment digitally, it’s less likely that they will lose these high-value trips to an online competitor.
  • Since this group tends to have larger families, there might be incremental revenue potential through larger basket sizes online

For good reason, the digital channel is capturing the attention of consumers, manufacturers and retailers alike. It’s a channel ripe for innovation and future growth. Today, only one-fourth of online shoppers think prices are better online; one-third think product assortment is better online; and one-fourth feel shopping for CPG is more convenient online than in store.

Right now, everyone (88%) is resistant to paying for delivery. But attitudes will evolve and, with that, so will online shopping and buying behavior. Companies can position themselves for success in this evolving digital shopping world by understanding the different types of digital shoppers, knowing how they interact with their categories, brands and channels and most importantly, understanding their motivations for engaging—or not engaging—in the CPG shopping world. This in-depth understanding of the digital shopper will allow companies to optimize their digital strategies and position themselves for future success.