e‑Tailers and CPG Firms Join Forces

Earlier this week, I discussed the growing problem CPG (consumer packaged goods) marketers face when selling against store brand products at traditional retail sites. One way to improve sales is to sell CPG online. This strategy has definite advantages and online is a growing channel for CPG according to RetailNet Group but manufacturers will need to work with their e‑tail partners to succeed.

A growing trend in the online sales of CPG is the increased cooperation between manufacturers and e‑tailers. While manufacturers can come up with innovative products and provide some exclusivity to their e‑tail partners, they are relying on the expertise of pureplay operators who understand the nuances of selling online.

As far as manufacturers are concerned, they need specific help from their e‑tail partners:

  • Better shopper insights 69%
  • Information on best practices 66%
  • Cross-​merchandising information 52%
  • Themed or shopper marketing events 28%

E‑tailers have different priorities than CPG marketers. In some cases, these online businesses must find a way to differentiate themselves so they would like to have the following assistance from manufacturers:

  •  Innovative new products or exclusive launches 100%
  • Web-​only product offerings 71%
  • Improved product images, descriptions, rich media for site display 67%
  • Higher marketing investment 67%

RetailNet Group report analysts also noted that “Both manufacturers and etailers should think of CPG ecommerce as a real-​time innovation lab with unique opportunities for in-​market testing of new products, offers/​messages, and new vehicles for driving shopper engagement.” It may take some time for manufacturers and their online e‑tail partners to get the business model right, but these advertisers will likely be marketing together online.

[Source: 2012 ERankings Study: Foundation for Success. Etailing solutions. 9 Jul. 2012. Web. 10 Aug. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.