With the incredible growth of e-commerce over the past 2 years, consumer packaged goods (CPG) companies, many of whom had been sitting on the sidelines, have finally started to take it seriously. According to eMarketer, e-commerce sales will represent a whopping 15.3% of total retail sales (+17.9% growth expected this year). The promise of rapid growth has led organizations to reorganize their efforts and their budgets to meet this opportunity. Further, retailer website ads (retail media) will represent $30 billion in brand marketing spend this year - this is now a very big part of the marketing mix.
Implementing a winning CPG strategy hinges on making the right choices, and there are more choices than ever. In 2019, winning at e-commerce really meant winning at direct-to-consumer (DTC) websites. Other e-retailers were a far lower priority. The rise of the Coronavirus disease (COVID-19) bolstered online grocery sales, including curbside grocery pickup, and now big box retailers as well as new upstarts all deserve more serious consideration.
While choices abound in 2021, brands that spread their efforts across too many retailers will fail to achieve the quality or speed they desire. To succeed in this new landscape, it’s time to take “win, place or show” approach.
What is the win, place, show approach?
The “Win, Place, Show” approach is a strategy that CPG companies can use to cut through a saturated market and focus their energy and budgets on the e-commerce channels that provide the highest return on investment. In this plan, divide your time, energy and marketing spending strategically to squeeze the highest return out of your efforts. Here’s how the Win, Place, Show approach works:
First, deliver true greatness in WIN channels
Start by identifying your WIN channels. These are the channels that represent the highest business potential, and you’ll want to devote the most time and resources to these gold mines.
For most CPG brands, your WIN channels will now include the “Big 3” e-retailers or marketplaces. The size of these online retailers makes them a common choice for most CPG brands’ WIN category.
However, for an increasing number of brands, their DTC store will also be a “WIN” channel. Collectively, your WIN channels will likely represent 50-70% of business potential. Being good isn’t good enough in WIN channels. Invest in having the best data, customized content and great marketing and promotion. Almost all of your retail media spend will likely go to this category. To stay ahead of the competition, prioritize “test and learn” activity—A/B testing content, shopper targeting approaches, new tactics and more.
Adapt success models to PLACE channels
The next step is to identify your PLACE companies and adjust your approach. Basically, work smarter, not harder, when making plans for your PLACE channels. That means piggybacking off the successes you find with your WIN channels and replicating processes whenever it’s possible.
Most of these PLACE opportunities will also be with well-known retailers. What gets included in this category is dependent on “fit.”
With PLACE channels, you need to look great, but do so by reapplying much of what has been learned in the WIN channels. Remember that this group likely represents 20-30% of business opportunities, so allocate efforts accordingly. Focus on search engine optimization (SEO), but avoid complicated marketing – keep it simple.
Deliver “compliance” (only) in SHOW channels
The “SHOW” category will include pretty much everyone else. This is where companies often become spread too thin—spending too much money and energy on the wrong channels. Your SHOW category will likely include the longest list of retailers, but the smallest opportunity collectively, likely 10% or so. Here the objective is to reapply whatever you can and then customize only to fit the rules a particular retailer has (“compliance”).
A different skill set is needed to successfully manage your SHOW channels. Winning in this category isn’t about being flashy; it’s about getting those boring details right. A good content syndication platform will help your team to make short work of this.
To come up with your own priorities, you’ll need to go deep into the data. Gain a clear understanding of where current sales and growth are coming from. Conduct a full audit of your brand’s presence across retail to understand where your strengths and weaknesses lie.
Once a clear picture is established, begin the WIN, PLACE and SHOW prioritization exercise with the right members of your team. Challenge everything -- if one or more points of e-commerce distribution don’t seem worth the trouble today, maybe they aren’t. What’s most important, by far, is winning where it matters. Don’t let anything get in the way of that.