E-commerce is exploding during COVID-19, but it’s more than a pure shift to online buying. It’s the reflection of the environment that consumers find themselves in. Fluctuating demand patterns will continue, and businesses must start being able to sense and plan for it if they want to come out ahead. Learn what changed and what others are doing in this short video.
Video Transcript:
Prior to this pandemic, e-commerce was already transforming CPG.
- 43% of CPG dollar growth was driven by e-commerce
- Food & beverage sales were growing online around 18% per year
- And grocery e-commerce sales were rapidly heading towards 20% of total sales
While in the last few weeks there have been 35% more online shoppers and grocery volumes have shot up more than 210%, it’s overly simplistic to state that this is an acceleration of what was already happening – it’s more nuanced.
To start, the underlying factors driving online shopping are different in this moment of contact avoidance & store closures.
Additionally, people must shop stores for certain consumable items that aren’t available online, resulting in those items shifting from convenience items to traffic drivers. Even now in-store sales of consumable products, much of which would have moved online under normal circumstances, have increased 21% while non-consumables have decreased 2%. Yet, this is the opposite of what is occurring online.
While the overall e-commerce numbers will grow, the underlying demand patterns across products, categories, and regions will continue to shift before settling on something else. There-in lies the challenge.
For many consumer product companies, accurately forecasting for e-commerce, was already lacking. Even in predictable times, leading players often had less than 50% forecast accuracy on major marketplaces like Amazon. That will quickly become a major detriment, as product unavailability lowers seller’s placement and shifts consumers to alternative brands – potentially forever.
Those that will succeed are supplementing their forecasts by incorporating market, event, and online marketplace data to decipher both the patterns and triggers. This allows them to simulate options and prepare for the immediate future by sensing and adjusting for fluctuations.
These same disciplines and insights are being applied to their mid and long-term planning, and as a result, those companies are becoming more dynamic, flexible organizations giving them a competitive edge which is essential if market consolidation occurs in the aftermath of this event.