Meet the world of e-commerce— where the safety and optimal conditions of your products bypass the store on their way to the front porch of your consumer. Today, CPGs are starting to get serious about packaging for e-commerce.
While online sales account for 3% of the $795B CPG market, a projected four-year CAGR of 18% means that nearly half the growth the industry will experience through 2020 will come through digital.
Enter the Millennials
A big reason for this optimism is the generational shift in grocery shoppers. Millennials—those born between 1979 and 1995— are the largest generation. They are digital natives, savvy consumers and are moving into their own homes and starting families. In the next few years, these millennials will be at the stage in their lives where grocery spending peaks, and much of this spending will take place online.
Optimized for consumers not the retail shelf
Online, CPGs don’t buy shelf space. They invest in “virtual shelf” opportunities. So instead of limiting the number of SKUs for retail, the emphasis is on SKUs that work best for e-commerce. It’s time to think less about the brick and mortar retail environment and more about the consumer.
Focus on flexibility
Scale has brought unique benefits to growing with major retailers like Walmart, Kroger and Costco. In this environment, it may be flexibility that wins the day. This is not to say that manufacturers abandon the path of aggressively driving down cost, but rather that they may be able to achieve lower overall cost by approaching this channel specifically in a more flexible, agile manner.
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