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What's holding CFOs back from digital finance initiatives


Posted by Matt Osborn - 16 December, 2019

Digital Trends that Make or Break Consumer Packaged Goods Companies

There’s no denying that the digital revolution has...well...revolutionized pretty much every industry out there.

However, one industry that has remained relatively unchanged (at least when compared to other industries) is that of consumer packaged goods. For the most part, the CPG industry has stayed pretty true to its roots: a reliance on mass marketing and advertising, a focus on brick-and-mortar sales, and an assumption of loyalty based on rather arbitrary factors (i.e., consumers who purchase from a given brand simply because they always have done so).

That being said, the digital revolution has finally begun affecting the CPG industry over the past few years - and it’s expected to hit the industry hard in the years to come. As a CPG provider, you’ll absolutely need to begin adapting to the changing climate of the industry as soon as possible in order to stay ahead of - or, at the very least, in line with - your competition.

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In this article, we’ll look at some of the things you can do to stay ahead of the curve.

Three Digital Trends That Will Affect Your Customer Packaged Goods Company in 2018

As we alluded to earlier, many of the trends and concepts other industries are now quite well-versed in may be uncharted territory for those in the CPG industry.

However, this isn’t because CPG companies have been slow on the uptake or anything like that. The reality is, there simply hadn’t been a need for these companies to begin using the more modern techniques we’ll be discussing momentarily. Up until fairly recently, consumers simply didn’t expect (and/or require) CPG companies to make any of these changes. 

But, again, this has changed in recent years. Slowly but surely, the modern consumer has begun expecting an “upgraded” experience from their chosen CPG provider - similar to their expectations of, say, their chosen electronics or food services brands.

With this in mind, let’s take a look at some of the ways in which your CPG company can evolve to meet the demands of the modern consumer.

Using Big Data to Drive Marketing Campaigns

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Technology has made it easier than ever before to collect data on target consumers - both on an individual basis as well as pertaining to a larger demographic.

The caveat, here, is that it’s not the act of collecting this data that matters - it’s what your company does with it that will make a difference. 

As mentioned earlier, CPG companies traditionally relied on mass marketing techniques, casting a wide net with the assumption that they’d capture at least some of the overall marketplace with their efforts. If one campaign didn’t work, they’d try something else - continuing this cycle until they discovered the “silver bullet” that brought in the largest crowd.

But, now that these companies have access to an absolute treasure trove of data and information regarding their target customers’ needs and purchasing habits, they need to focus on using such to develop just the right message, for just the right person, to be delivered at just the right time. 

On that same token, CPG companies should also be using big data to pinpoint those consumers who have the highest probability of converting, and who will do so with the least amount of friction. In other words, rather than casting a wide net and attempting to convince (read: coerce) reluctant consumers to make a purchase, these companies should be looking for the lowest hanging fruit, so to speak. In turn, this will cut down on customer acquisition costs, and increase customer lifetime value in the process.

While making this transition will undoubtedly require a bit of an upfront investment on the part of your company, the ability to develop targeted, laser-focused marketing campaigns and initiatives will absolutely pay off in the long run.

Shifting Toward a Focus on Ecommerce

Even though it’s slowly catching on, the act of ordering consumer packaged goods via the internet is still nowhere near as common as the act of ordering, say, electronics, books, or home goods.

However, CPG companies should be prepared for this to change in the coming years. According to a 2015 study by market research group IRi:

eCommerce will account for about 50% of the entire industry’s growth by the year 2020. 

On the one hand, this means CPG providers will ultimately be able to increase their reach since they’ll be better able to deliver products directly to the consumer (in addition to using retailers as middlemen). On the other hand, because every CPG company has the same opportunity, the volume of competitors within the industry is likely to skyrocket.

With this in mind, it’s essential that CPG companies focus heavily on enhancing their customers’ online experiences - which can be done in a number of ways.

For one thing, CPG companies need to embrace the online world in its entirety. In other words, it’s not enough to merely have a website and online store; your business should be present and active on a variety of social media channels and other such platforms, as well. However, in the interest of not spreading yourself too thin, you should focus mainly on the platforms and channels your customers utilize most.

With regard to your actual online store, you absolutely need to ensure your customers have a seamless and enjoyable experience across the board. This means organizing your products in an intuitive and navigable manner, allowing for a quick and easy checkout process, and providing opportunities for additional, supplemental purchases via recommendations and suggestions.

Done well, making the jump to eCommerce won’t be something your CPG company simply does to keep up with the industry - it will be an initiative that leads your organization to considerable gains in the very near future.

Considering the Subscription Option

As we’ve alluded to throughout this article, CPG companies traditionally rely on customers becoming loyal primarily out of habit. In other words, a customer who typically purchases a specific brand of, say, toothpaste, will probably continue to buy that same brand time after time.

Still, this leaves the door wide open for customers to churn without notice. After all, there’s nothing really holding them back from switching brands - especially if the products offered by either brand are relatively similar.

Knowing this, it may be beneficial to consider implementing a subscription-based service to your online offering. Essentially, doing so would all but ensure your subscribers remain loyal and continue doing business with your company from month to month. In turn, this will guarantee an uptick in your overall customer lifetime value; once a customer locks into a subscription to your services, it will take much less effort on your end to keep them coming back time and time again. 

As we alluded to in the previous section, in making this switch, you’ll want to focus more on the customer experience than on the product you offer. Again, there may be a number of other providers who offer products of similar quality - so it’s up to you to discover and strengthen your brand’s unique selling point. Again, this typically boils down to improving the overall service you provide your customers, in turn decreasing the amount of effort they need to put into the exchange.


While certain “trends” have been known to come and go, the shift toward digital commerce in almost every industry is almost inevitable to continue growing stronger as time goes on.

With that in mind, it’s imperative that you get your CPG company on board as soon as possible if you want to have any hope of remaining competitive in the years to come. 

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Topics: Management, Sales & Marketing, CPG, manufacturing

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