Research from Periscope By McKinsey of consumers in France, Germany,
the UK and U.S. reveals accelerating trends in online CPG shopping
New York and London – April 11, 2018 – Consumer packaged goods (CPG), once purchased almost exclusively in stores, are quickly moving into the digital realm as more and more consumers are researching and purchasing CPG products online. This is according to survey findings released today from Periscope® By McKinsey, which offers a suite of Marketing & Sales Analytics Solutions to help companies achieve sustainable revenue growth. In all markets surveyed, the findings revealed that at least 70% of the respondents are undertaking some form of online CPG shopping activity, with French (40%) and UK (39%) consumers exhibiting the greatest balance of multichannel shopping preferences followed by German (33%) and U.S. (32%) shoppers.
Periscope By McKinsey’s survey evaluated consumers’ current CPG purchasing behaviors as well as their future CPG shopping intentions. It uncovered insights on which channels consumers use to make different categories of CPG purchases and the motivations behind their channel shopping preferences, the demographic impact on shopping channel choices, delivery preferences of consumers making CPG purchases online, and the effect of personalized recommendations on digital shopping.
Highlights from the survey findings, which reflect the responses of consumers from the U.S., UK, France and Germany, include:
Online Shoppers Prefer Non-Perishable Categories in CPG
Research found that non-edible and durable food items are performing considerably better than perishable products like dairy and bread, revealing shopper hesitation about purchasing these types of products online. Also, beauty and personal care products topped the shopping list for consumers in France (47%), the UK and Germany (46%), and the U.S. (38%). Similarly, cleaning supplies were included in the “Top 4” product categories consumers had shopped online within the past two months.
Age Plays a Role in CPG Shopping Channel Preferences
Millennial shoppers (aged 18-29) were the largest group in each country surveyed, except the UK, to only or mostly undertake their shopping for CPG products online. However, their digital channel predilection is closely matched in many markets by those aged 30-39 and 40-49. Interestingly, in the U.S., 22% of respondents who shop for CPG items only online were aged 50-59. Similarly, the online purchasing behaviors of those aged 40-49 surpassed those in the 30-39 age group in Germany and France. Meanwhile, in the UK, shoppers aged 30-39 were most likely to adopt a digital only position.
Discounts and Bulk Purchasing Options Drive Online Purchasing
When asked to evaluate how their online shopping habits differ from shopping in-store, consumers in all markets said they are more likely to buy more in bulk online and are willing to spend more if they can identify discounts and offers Shoppers are also using digital channels to find the best deals. Price and free delivery were selected by consumers in the U.S. (57%), Germany (57%), France (49%) and the UK (47%) as the top two factors influencing their online CPG purchasing decisions. Promotions and discounts were a close third for consumers in every country except Germany, where 30% of respondents said product descriptions were the next most important factor likely to influence the choices they make.
Recommendations are More Welcome in Some Markets Than Others
Findings showed that at least 38% or more of consumers in every market surveyed say they are open to recommendations on a similar product but from a different brand. Recommendations on products by the same brand was the second most welcomed prompt for shoppers in France (30%) and the U.S. (28%), while “frequently purchased together” style recommendations were particularly popular with 25% of UK shoppers. Conversely, 36% of German shoppers made it clear they are unlikely to be swayed by recommendations, with over a quarter of shoppers in France (30%), the UK (29%) and the U.S. (28%) saying they don’t use or like recommendations.
Online Shines Bright for CPG in the Future
A significant number of respondents noted that they plan to prioritize online channels when making CPG purchases. In fact, over a quarter of U.S. (27%), French (26%) and UK (26%) consumers surveyed indicated they will predominantly be shopping online in the future, with one-fifth of German shoppers saying this will be their preferred channel.
However, CPG companies looking to boost online purchases across more products and category selections will need to emulate the engaging experience that consumers have when visiting a physical store. For example, meal recipes that show cooking ingredients on a virtual table could help draw the consumer along a shopping journey, while those exploring a haircare or beauty purchase could be given opportunities to upload their photo and virtually try out a new hair color or makeup look.
“The survey shows that capturing the growing online consumer demand will require CPGs to build out their digital capabilities for strong omnichannel strategies. CPGs should focus on managing both digital stores and key account relations for digital, including assessing online channel performance, understanding how consumers shop a category online, and identifying innovation opportunities from online trends. It requires the same rigor that has been applied to physical stores for years,” said Brian Elliott, managing partner at Periscope By McKinsey. “As respondents are motivated a lot by price and convenience when shopping online for CPG products, it is key for companies to have professional online Category Management capabilities in place to better leverage consumer insights to appropriately curate assortment, improve digital share of visual inventory, personalize conversations, and run promotions that maximize returns across channels. At the end of the day, leading CPG organizations will evaluate their broader channel strategy and make the necessary investment in their omnichannel brand experience.”
For complete details on the survey’s findings, download the 28-page report, "CPG Goes Omnichannel: Shoppers Grasp the Digital Opportunity".
In March 2018, Periscope by McKinsey conducted online research targeting consumers in France (505), Germany (500), the UK (500) and the US (1026). Respondents were aged between 18 and 70+ and responses were selectively evaluated by age category and gender.
About Periscope® By McKinsey
Founded in 2007, Periscope® By McKinsey offers a suite of Marketing & Sales Analytics Solutions to help companies achieve sustainable revenue growth. The Periscope® By McKinsey platform combines world-leading intellectual property, prescriptive analytics and cloud-based tools with expert support and training. It’s a unique combination that drives revenue growth, both now and into the future. The platform offers a suite of Marketing & Sales solutions that accelerate and sustain commercial transformation for businesses. Periscope leverages its world-leading IP (largely from McKinsey but also other partners) and best-in-class technology to enable transparency into Big Data, create actionable insights and new ways of working that drive lasting performance improvement, and typically sustain a 2-7% increase in return on sales (ROS). With a truly global reach, the portfolio of solutions is comprised of: Insight Solutions, Marketing Solutions, Customer Experience Solutions, Category Solutions, Pricing Solutions, Performance Solutions and Sales Solutions. These are complemented by ongoing client service and custom capability building programs.
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