The Death of an Industry? — How CPG Companies Can Keep Pace with E-commerce

CPG companies
CPG companies have dominated brick-and-mortar retail. Can they do the same for E-commerce?
Image Source: Flickr user Battle Creek CVB

Last year marked the fifth consecutive year of growth in E-commerce sales at or above 15 percent1. But as E-commerce continues to experience exciting growth rates, CPG companies have failed to produce a “coordinated, systematic approach” to ensure that they gain a significant part of this market share. As researchers discuss,“…fully 92 percent of CPG executive respondents agreed with the statement, ‘The e-commerce channel is a strategic sales channel for CPG companies.’ Yet only 43 percent of these same executives thought that their company had a clear, well-understood digital commerce strategy, indicating a substantial gap between e-commerce’s perceived importance and CPG companies readiness to execute”2. In this context, CPG companies must determine how to best serve online customers by determining what types of food, beverages, personal care products and household consumables are being purchased online, how that information can be organized to build important capabilities for retailers and ensure the right priority initiatives and finally, how products can be changed in order to serve different consumers in the online world.

Industry Solutions for CPG Companies Provide a Way to Accomplish Goals

CPG companies seem to understand the importance of E-commerce. However, the step from understanding its importance to implementing changes that will increase the market share of CPG companies in E-commerce are separate challenges. In attempting to implement changes, CPG companies should consider the use of BIOVIA’s Industry Solutions, which provides a means for CPG companies to use data organization as well as product innovation to ensure that companies maintain existing customers and acquire new ones, while also ensuring that they can compete in today’s fiercely competitive and fast-paced environment. Following are examples of how Industry Solutions can ensure that CPG companies stay ahead of the game:

Electronic laboratory notebooks: The types of foods and goods consumers buy online can differ from the consumables they purchase in brick-and-mortar stores. In order to identify these differences and develop new products that are specifically geared toward online consumers, CPG companies should make use of electronic laboratory notebooks in order to store and sort through large amounts of data collected about their different consumers in an organized manner. With electronic laboratory notebooks, CPG companies can reduce documentation time by half while also lowering costs by 25 percent, thus increasing the workflow and the likelihood that they collect important data. Moreover, electronic laboratory notebooks could be used to prepare new recipes or consumables that might entice certain consumers who purchase products online, therefore increasing the capabilities of CPG companies to cater to specific consumers.

Materials Modeling and Scientific Informatics Platform: As CPG companies collect information about their various consumers using electronic laboratory notebooks, this information can then be used to brainstorm new products using BIOVIA’s Pipeline Pilot and data modeling and simulation environment, Materials Studio. We have seen that these programs enable researchers to reduce research costs by using predictive science to uncover how certain designs and products are likely to work before they are produced. Additionally, these products improve the decision-making process by enabling the data collected through ELNs to be structured into a single research environment.

The abovementioned components of BIOVIA’s Industry Solutions are only the tip of the iceberg. Ultimately, these solutions enable CPG companies to remain innovative, while also collecting information that will enable them to define who their E-commerce consumers are and subsequently, how to modify their own products in order to support their needs. The death of brick-and-mortar retailers have made endless headlines; however, much of these stories are believed to be grossly overexaggerated3. Indeed, brick-and-mortar retail is still a $4 trillion market. CPG companies should consider how they can also take a larger share of the E-commerce market. To do so requires understanding the consumer and how he or she differs from traditional consumers. Our products can help CPG companies determine these differences while also determining how to create products that inspire different groups of individuals. To learn more about how our products can further support your business, please contact us today.

  1. “U.S. annual e-retail sales surpass $300 billion for the first time,” February 2015, https://www.internetretailer.com/2015/02/17/us-annual-e-retail-sales-surpass-300-billion-first-ti
  2. “CPG Companies: Your next growth opportunity has a username and password,” May 2014, http://dupress.com/articles/digital-commerce-in-consumer-packaged-goods-companies/
  3. “Is the Death of Brick-and-Mortar Retail a Myth?,” September 2014, http://www.entrepreneur.com/article/236998

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