Packaged Goods Flying Off the E-Commerce Shelf

Packaged Goods Flying Off the E-Commerce Shelf

By Agency Creative
October 11th, 2013

Remember trips to the grocery store as a kid? Riding in the shopping cart, reaching for the Cheerios and pancake boxes? Whining till Mom would drop a coin in the electric rocking horse? Putting a nickel in the gumball machine? So Norman Rockwall. So last century!

Today, a shopping cart is more frequently an icon that you tap with your finger. And a large number of non-perishables are being purchased online at the Amazon store.

E-commerce is fast becoming a significant means of purchasing consumer package goods. This shift could quickly increase the market share of the smaller players and upend pricing. Clearly, the paradigm is changing. According to a report published by Sanford C. Bernstein, e-commerce sales have risen to 9% of category sales for health products, 5.9% for beauty care and 5.7% for pet care.

“We believe strongly that Amazon’s push into CPG is in its early innings,” the report said, noting that Amazon will continue to use its Prime and “Subscribe and Save” programs to build share.

For much of the category, e-commerce still accounts for less than 1% of sales. But Bernstein predicts online sales will reach $222 billion––or around 25% of U.S. packaged goods spending overall–– within the next decade.

According to the report, certain brands appear to perform better online than in brick and mortar stores. Bob’s Red Mill Gluten-Free Whole Grain Rolled Oats were the top seller on Amazon, while Honey Nut Cheerios were the top seller in conventional stores.

“E-commerce seems to be democratizing ‘shelf space’ as top brands do not dominate the e-commerce Fast-rising online package goods sales may seem enticing on the surface, the report argues. “But its implications will be enormous. Given that lower prices, specialized niche selections and delivery convenience seem to be the key drivers for consumers to purchase online, the outcomes for large incumbents may not be entirely positive.”

There are other implications. The rise of e-commerce packaged goods sales could also raise costs by creating different needs for package design and direct-to-consumer shipping––even lower priced e-commerce store brands.
Yes, the times, they are a changin’.

Of course, things are always changing. A couple of generations ago groceries were delivered to your door by a kid on a bicycle. Today, it’s more likely a lady driving a FedEx truck. Go figure.

We are a Dallas Advertising Agency specializing in integrated marketing.

Remember trips to the grocery store as a kid? Riding in the shopping cart, reaching for the Cheerios and pancake boxes? Whining till Mom would drop a coin in the electric rocking horse? Putting a nickel in the gumball machine? So Norman Rockwall. So last century!

Today, a shopping cart is more frequently an icon that you tap with your finger. And a large number of non-perishables are being purchased online at the Amazon store.

E-commerce is fast becoming a significant means of purchasing consumer package goods. This shift could quickly increase the market share of the smaller players and upend pricing. Clearly, the paradigm is changing. According to a report published by Sanford C. Bernstein, e-commerce sales have risen to 9% of category sales for health products, 5.9% for beauty care and 5.7% for pet care.

“We believe strongly that Amazon’s push into CPG is in its early innings,” the report said, noting that Amazon will continue to use its Prime and “Subscribe and Save” programs to build share.

For much of the category, e-commerce still accounts for less than 1% of sales. But Bernstein predicts online sales will reach $222 billion––or around 25% of U.S. packaged goods spending overall–– within the next decade.

According to the report, certain brands appear to perform better online than in brick and mortar stores. Bob’s Red Mill Gluten-Free Whole Grain Rolled Oats were the top seller on Amazon, while Honey Nut Cheerios were the top seller in conventional stores.

“E-commerce seems to be democratizing ‘shelf space’ as top brands do not dominate the e-commerce Fast-rising online package goods sales may seem enticing on the surface, the report argues. “But its implications will be enormous. Given that lower prices, specialized niche selections and delivery convenience seem to be the key drivers for consumers to purchase online, the outcomes for large incumbents may not be entirely positive.”

There are other implications. The rise of e-commerce packaged goods sales could also raise costs by creating different needs for package design and direct-to-consumer shipping––even lower priced e-commerce store brands.
Yes, the times, they are a changin’.

Of course, things are always changing. A couple of generations ago groceries were delivered to your door by a kid on a bicycle. Today, it’s more likely a lady driving a FedEx truck. Go figure.

We are a Dallas Advertising Agency specializing in integrated marketing.


Recommend this article:

Remember trips to the grocery store as a kid? Riding in the shopping cart, reaching for the Cheerios and pancake boxes? Whining till Mom would drop a coin in the electric rocking horse? Putting a nickel in the gumball machine? So Norman Rockwall. So last century!

Today, a shopping cart is more frequently an icon that you tap with your finger. And a large number of non-perishables are being purchased online at the Amazon store.

E-commerce is fast becoming a significant means of purchasing consumer package goods. This shift could quickly increase the market share of the smaller players and upend pricing. Clearly, the paradigm is changing. According to a report published by Sanford C. Bernstein, e-commerce sales have risen to 9% of category sales for health products, 5.9% for beauty care and 5.7% for pet care.

“We believe strongly that Amazon’s push into CPG is in its early innings,” the report said, noting that Amazon will continue to use its Prime and “Subscribe and Save” programs to build share.

For much of the category, e-commerce still accounts for less than 1% of sales. But Bernstein predicts online sales will reach $222 billion––or around 25% of U.S. packaged goods spending overall–– within the next decade.

According to the report, certain brands appear to perform better online than in brick and mortar stores. Bob’s Red Mill Gluten-Free Whole Grain Rolled Oats were the top seller on Amazon, while Honey Nut Cheerios were the top seller in conventional stores.

“E-commerce seems to be democratizing ‘shelf space’ as top brands do not dominate the e-commerce Fast-rising online package goods sales may seem enticing on the surface, the report argues. “But its implications will be enormous. Given that lower prices, specialized niche selections and delivery convenience seem to be the key drivers for consumers to purchase online, the outcomes for large incumbents may not be entirely positive.”

There are other implications. The rise of e-commerce packaged goods sales could also raise costs by creating different needs for package design and direct-to-consumer shipping––even lower priced e-commerce store brands.
Yes, the times, they are a changin’.

Of course, things are always changing. A couple of generations ago groceries were delivered to your door by a kid on a bicycle. Today, it’s more likely a lady driving a FedEx truck. Go figure.

We are a Dallas Advertising Agency specializing in integrated marketing.

Leave a Reply

You must be logged in to post a comment.

-->

News

Agency Creative Hires Bart Hirneise as Executive Creative Director

A Partnership Thirteen Years in the Making

Posted on:

Thirteen years ago, an up-and-coming copywriter named Bart Hirneise was freelancing at Agency Creative. Recently on the market and looking for his next opportunity, Bart liked the vibe of the agency, the clients and, in particular, the CEO, Mark Wyatt. The two quickly formed a bond around their straightforward, no-bull approach to producing great creative.

Read More »

Blog

Hybrid and Native Apps - Which are Right for You? | Piping Fresh Blog

Much Ado About Apps

Hybrid and Native Apps and How To Choose

Posted on:

Before we jump right into the down-and-dirty details of app development, let’s dip our toes into why subjects like this are so important. We need to focus on mobile usability in general first. Let’s face it, mobile devices are ubiquitous and deeply personal. People’s phones have become their constant companion and first point of connection to the outside world.

Read More »

Contact Us

Agency Creative wants to be your marketing agency. We have years of experience, truckloads of talent and a bottomless supply of enthusiasm. Contact us today.

Please leave this field empty.