We touched on this earlier, but for CPG brands, success comes from balancing product quality, brand image, and pricing. Sustainability is increasingly becoming a key factor as well. Here’s how these factors influence success and tie back to fulfillment:
1. Product quality: There is a comfort in buying CPG products. You know what you’re going to get, every single time. Which means quality, and consistency, in particular, is king.
Many popular CPG products must be replaced or replenished. Customers have lots of opportunities to have good experiences, as well as bad ones. All it takes is one negative experience with a brand or product, to initiate a switch when it is time to place another order.
One mistake to lose a customer. That means CPG brands which consistently deliver high-quality products are more likely to retain customers, and over time, generate more revenue. For these reasons, safety, testing, and quality control are especially important.
Fair or unfair, customers will also conflate shipping experience with overall product experience. An Ipsos poll shows that as many as 85% of online shoppers say “a poor delivery experience would prevent them from ordering from an online retailer again.”
2. Brand image and identity: With tight margins and the importance of customer retention, a distinct visual identity and consistent brand voice across all channels, including packaging, are essential.
Partnering with a third-party logistics (3PL) provider capable of supporting custom packaging needs is crucial for maintaining brand image. Otherwise, even the most beautiful CPG products will leave the warehouse in cardboard boxes and kraft yellow mailers.
3. Sustainability: Sustainability isn’t going anywhere. More and more, we’re seeing that consumers are willing to spend more on sustainable products. To reinforce that point, consider that a Pew Research poll shows that a majority of US adults – regardless of age – consider the climate to be a top priority.
The upshot of this is that if customers think you care about the environment, they are more likely to spend money on your products.
Sustainability can take many forms in the CPG industry. Changing up materials to use more recycled and biodegradable ones is one way. Another is through optimizing transportation routes to reduce carbon emissions. No matter what, though, it’s important to find a 3PL that is on-board with sustainable best practices. Otherwise, it’s hard to take action on these good intentions.
4. Price and value: It’s no surprise that pricing is always important in eCommerce. However, it’s more so the case in CPG, because customers must keep renewing their commitment with every purchase. They look at their receipts and order confirmations over and over again, and they must say, each time, “this is OK, I want to keep spending this money.”
With that in mind, while customers don’t want to overpay, most are willing to pay more for products that exceed expectations. Many will pay extra for sustainable products too.
Of course, it’s impossible to keep prices where they need to be when overspending on logistics. Postage, in particular, is a profit margin destroyer. Every public promise made by a CPG brand needs to be supported by a supply chain ready to keep those promises.
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