Online CPG Sales Headed for 10 Percent

Feb. 22, 2017
But food and beverage component will only hit 5.5 percent by 2022, according to IRI report.

Online sales will account for 10 percent of all consumer packaged goods (CPG) sales by 2022, up from just 1.4 percent in 2015, according to a new report from IRI – although the food and beverage component of CPG will hit just 5.5 percent.

Regardless of the numbers, "more than 76 percent of all customer shopping trips begin online, regardless of whether the purchase transaction occurs in a brick-and-mortar store or online," the report states. "A strong online presence will support both online and in-store growth efforts."

Further, digital will influence 77 percent of all retail sales this year, a retail value of more than $2 trillion.

Click-and-collect or home delivery are emerging as the delivery mechanisms for this still-young business model. While online CPG is still in the early stages of development and lags other categories, it is poised for explosive growth, says the "Build, Drive and Earn E-Commerce Growth for Retail Success" report.

While the food and beverage component of CPG will retard this growth a bit, IRI forecasts an "impressive 18 percent of sales" of non-food CPG products going online by 2020.

Millennials are singled out as a primary driver of this growth, with two-thirds of them shopping online on a weekly basis and 84 percent shopping online monthly. Despite millennials' influence "across [all] ages, shoppers are developing their online shopping systems."

"One thing is for sure, though: Systems will become more rigid and the ability to influence change will be more limited," the report says. "We estimate that only 1 percent of Amazon Prime shoppers, of which there are already more than 63 million, check prices on other sites before making a purchase on Amazon."

Other insights:

  • Consumers visit e-tail locations to understand the latest products, trends and money-saving opportunities.
  • Brick-and mortar-brands must establish a solid presence along their shoppers' paths to purchase.
  • Delivering the right message at the right time requires a keen understanding of how brick-and-mortar shoppers move in the online world.

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