According to a recent IRI report, food and beverage accounted for only 0.8% or about $4 billion of all CPG sales online in 2015. However, the market research firm predicted sales of food and beverage online will climb quickly to 2.7% or $15 billion in 2020 and 5.5% or $31 billion in 2022.
As this happens, content solution provider 1WorldSync says manufacturers and retailers must learn how to better identify, capture and share product content across channels in order to promote and protect their brands. If they don’t, they risk losing share of the $23.4 trillion in worldwide e-commerce sales predicted for 2017 – a number that will continue to climb with each passing year.
In this episode of FoodNavigator-USA’s Soup-to-Nuts podcast, Ken Yontz, 1WorldSync’s global vice president of transformation management, describes the extent of the marketing opportunity offered by cross-channel commerce, how companies can position themselves to best capitalize on its potential and what challenges they must overcome.
Based on a survey of 400 manufacturers and retailers that 1WorldSync commissioned and recently published, Yontz paints a pretty grim picture of companies’ preparedness – or complete lack thereof – to capitalize on the opportunities ecommerce and global channel marketing offer.
“The best way to describe the current state of the landscape is evolving,” Yontz said. Ecommerce is “certainly high on everybody’s radar, people are aware of it, there are various stages of engagement with ecommerce, but a lot of discussion is still around the right strategy, the priorities for implementation and ultimately the impact on the business both financially and operationally.”
Unfortunately, Yontz said, many of these initial efforts are falling flat – possibly because manufacturers and retailers do not understand fully that the ability to buy products online is no longer a choice that is simply nice for consumers to have, it is one they expect.
“Historically technology really goes mainstream when it ceases to be about the technology and it becomes about a lifestyle,” he said. “Where we are, I think, in ecommerce landscape is it has become a lifestyle choice for consumers, and it is just expected. It is not, ‘Oh, wow, these vendors offer ecommerce choices,’ or ‘This company has information on their website,’ or ‘I can get to it on my phone.’ It is just how people expect to interact with each other and with businesses.”
But Yontz said many companies are falling far short of these expectations. He notes that the survey commissioned by 1WorldSync found nearly half of the companies and retailers surveyed lost more than $1 million in revenue due to ecommerce challenges and more than one in 10 have lost more than $3 million.
3 major challenges
Yontz said the shortcomings are due first and foremost to a knowledge gap or disconnect most companies have about their core business and that offered by ecommerce. He said they fail to see it as the same, and as such are not investing properly across the different parts.
“We saw a real difference in the percent of investments from some of the middle-of-the-road type organizations versus what we call market leaders, which were identified as companies that have more thand 51% of their revenue coming in through an ecommerce model,” he said. “The market leaders were investing at a much higher rate upwards of 30% or more of the digital marketing and digital investment were being spent on the specifics of ecommerce versus, you know, 25% or less in most cases for the companies that doing much less.”
Another challenge is maintaining consistent, high-quality product content that is available at the click of a button, Yontz said.
The last major challenge that the survey revealed were significant gaps in basic infrastructure, including the inability of 51% of retailers to support mobile commerce and 80% are unable to manage product information across channels. This means omnichannel marketing for many players nothing more than a pipe dream at this point.
5 strategies for success
But the survey results weren’t all bad. Yontz explained that there were several lessons learned from market leaders, which manufacturers and retailers can adopt.
- Using a third-party content provider,
- Embracing the cloud,
- Investing in cross-channel capabilities,
- Focusing on the fundamentals, and
- Supporting partners and customers
On paper these five strategies may appear to be an easy checklist, but Yontz emphasizes developing an onmichannel marketing program is a major project.
“It is certainly an easy checklist, but it is not an easy project. It is a full commitment from a company. It requires vision and commitment from the executive level all the way down through the organization. So, companies have to really embrace this,” he said.
Even though creating an omnichannel marketing strategy is a big commitment, Yontz stresses that it is one companies need to take now because cross-channel commerce is not a futuristic concept, but rather one that is here now and here to stay.