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Business Insights From Conway MacKenzie
February 11, 2016

E-Commerce vs. Brick and Mortar: Pay Close Attention to the Former

E-commerce accounts for a small share of consumer packaged goods (CPG) sales today, but it’s accelerating rapidly. Shoppers have increasingly moved their purchasing online — 15% annually since 2010, per eMarketer, far outpacing brick-and-mortar stores. And now consumers have turned to their mobile device as the medium to research and purchase.

Unquestionably, the shopping experience is changing, and CPG manufacturers and retailers must be prepared. According to IBM’s Retail 2025 report (referenced recently in Computer World), during the next decade stores will evolve into showrooms providing brand experiences and orders will be shipped direct to consumer. Additionally, online and consumer-direct sales are expected to increase to 50% or more of revenue.

To prepare, U.S. retailers plan to invest $15 billion in e-commerce over the next three years according to IRI. E-commerce is a viable platform for launching new brands and growing existing ones. It needs to be part of a diversified distribution platform, which is critical to both growth and survival.

It is time to rethink how you can best reach consumers – or, better yet, how they will reach you.