The Digital Conundrum: How to Remain Profitable on the Digital Shelf

How do other brands nurture their ecommerce business, creating growth and profitability while defending against the increasingly aggressive competitive landscape?

We sat down with ecommerce and data analytics leaders from multiple CPG companies to discuss this question and learn best practices. 

Achieving profitability in brick and mortar is well-established, although not without its own set of challenges. The recipe for success on the digital shelf is harder to achieve due to increased competition and because the requirements to win can change overnight.

You have various levers to use to transform your digital business. The number of actions you could take can be overwhelming – especially since the actions may differ between each retailer. 

To add further complication, today’s retail environment creates increasing pressure for you and your team in a number of areas:

• Competitive pricing moves from retailers that take away control of your pricing power
• Cost of goods due to rising transportation and raw materials costs requiring more frequent or larger price increases
• 3P Amazon sellers are looking to steal your customers using some well-proven tactics, which if implemented successfully, affect your profitability and loyalty
• Supply chain complications that challenge your ability to service your current and future customers
• Amazon is (at the time of writing), adding an additional 5% surcharge for US Sellers related to transportation costs (source)

Consumer goods brands without a robust approach to managing their digital business experience issues such as:

• Loss of price management and price compliance, resulting in eroded profits
• Competitive price gaps increasing, leading to competitive steal and lost sales
• Out of stocks and stock issues that create opportunity for 3P and competition to eat your lunch, resulting in lost sales and profits
• Falling out of the premium tier search results (share of search), effectively rendering your items invisible and ripe for others to win
• Eroded sales due to loss of the “buy box” to 3P sellers

Winners take a different path and the outcomes they achieve are driven by analytic applications that are built to mitigate threats. Winning CPG brands are able to:

• Create the optimal price-pack architecture that compliments your brick & mortar offering and keeps tabs on the competition and price gaps
• Defend against 3P sellers but managing price compliance across all their digital outlets
• Proactively respond to potential stock issues through automated alerts
• Ensure they are both discoverable and appear in the premier tier search results to win the click & purchase

It’s easier said that done – but it has and can be done!

Today’s brand winners leverage a competitive intelligence platform to deliver competitive insights into their business. Insights create tangible results, aimed at protecting your brand status, customer loyalty and organizational profitability.

Typical outcomes are proactive price management, strong product availability and optimal visibility. They leverage our price, promotion and assortment analytics, as well as our “share of shelf” insights to make a difference to their business.