Digital CPG Blog

A recent report from the Willard Bishop retail consultancy highlights a major challenge for CPG brands—retailers are dramatically reducing the CPG sku assortment they stock on their shelves in order to reduce costs and maximize their own margins. According to the report, the reduction will be so great that CPG manufacturers will likely lose entire brand lines (coverage at MediaPost here).

This is shaping up to be a huge issue for CPG, and the rise of retailer private label goods means it is likely to get worse as retailers clear out more real estate for their own growing product lines. It appears to be a symptom of the increasingly dysfunctional relationship between CPG manufacturers and their retail channels.

Question: How will CPG manufacturers respond?

One potential option for manufacturers facing reduced distribution through traditional retail is to expand their online direct sales efforts. This is a major trend in non-CPG markets. For example, Internet Retailer recently announced that manufacturers selling direct to consumer is the fastest growing online retail category in its Top 500 Guide. Will CPG manufacturers follow this trend? It seems to be one viable means to gain some control over their distribution to consumers.  Are there other options available?  With billions of dollars at stake, this will be interesting to watch.

Welcome to the Digital CPG blog.  In this blog, we’ll work hard to give CPG brand marketers a daily look at how the CPG industry is evolving to meet the challenges and opportunities of the digital marketplace.

It is a really exciting time to be in the Consumer Packaged Goods industry.  The next five years will see a huge number of changes in CPG.  In our roles at Alice.com, we follow this innovation obsessively.  We track it, discuss it, and debate it.  We started this blog to share our work with you, and (hopefully) allow you to join the conversation.

Some of the questions we hope to discuss with you on this blog include:

• How are CPG brands using today’s technologies to have a closer relationship with their consumer?
• How is CPG advertising evolving to become more accountable and relevant to consumers?
• What will coupons look like in the future?
• How will Gen Y shop for CPG?
• Will Private Label goods continue to gain market share and alter channel relationships?
• How will CPG marketers leverage shopper marketing and other data-rich opportunities?
• As marketing channels continue to fragment, how with CPG brands keep their brands top of mind for consumers?
• What new retail models and technologies will change how we buy CPG?
• Will the ghost of Webvan continue to cast a shadow over the online CPG space?

If you are interested in these questions, we hope you subscribe and join in the discussion.  Thanks for reading!