For better or for worse, the pandemic has ripped CPG brands from the protective arms of retailers and thrown them directly into the ring with customers.
And it’s changed everything.
Customers now expect brands to be available 24/7, whether it’s for online shopping or personalized customer service. They expect you to know them as individuals, to make connections, and to care about the environment.
And the thing is, if you’re not meeting them where they are, you can bet the competition will be.
So if you want to stay in that ring, here are 4 major expectations customers have for CPG brands right now.
1. Customers expect to buy from CPG brands directly
Image credit: M&M’s
Why consumers expect this
Before the pandemic, only a handful of traditional CPG brands were available in the direct-to-consumer (DTC) channel. And it was fine because consumers didn’t expect to be able to go online and order directly from your brand.
But all that changed during COVID.
In May 2020, for example, 16% of adults in the U.S. ordered groceries online for the first time. And sales of edible, non-perishable, and general food products, including CPG offerings, jumped from 38% of online grocery sales to a whopping 76%.
This shift to online grocery shopping, combined with supply shortages in retail, expedited a change in consumer behavior — suddenly consumers were seeking out CPG brands directly online.
And it doesn’t seem to be a fleeting trend. In fact, recent research from McKinsey tells us that the vast majority of consumers plan to stick with new shopping behaviors adopted during the pandemic, with 80% of those who tried a new digital shopping method intending to continue it post crisis.
What this means for CPG brands
If you’ve been on the fence about DTC sales, now is the time to take the plunge. The long-debated question of whether or not the channel is worth it has been answered — and it’s a resounding yes.
Not only do consumers expect you to be there, but the channel offers a slew of fringe benefits like access to first-party data and the ability to connect directly with consumers.
Pepsi, Kind Snacks, Oreo, Colgate, Heinz, and many more have taken note, entering the DTC space recently. Forester recently conducted an analysis of 29 CPG companies in the DTC channel, rating M&M’s as best-in-class due to product customization, a clear loyalty rewards program, and website interactivity.
2. Customers expect a personalized shopping experience
Image credit: PepsiCo
Why consumers expect this
Another by-product of online shopping is the consumer expectation for a highly personalized shopping experience, especially with pioneers like Amazon raising the bar over the years.
In fact, McKinsey posits that the expectation for personalization can even be considered a “hygiene factor” at this point — something consumers take for granted, but if a retailer or brand gets it wrong, they may switch to a competitor.
And consumers don’t just expect personalization on a segmented level anymore, with brands sending broad-based offers targeted at customers like them. They now expect personalization at an individual level, where brands remember their preferences and send communications that are uniquely relevant to them as a person.
What this means for CPG brands
Achieving this level of personalization can certainly be difficult, especially if you don’t have access to first-party data. But the payoff can be huge.
Case in point: Companies that use advanced personalization achieve a $20 return for every $1 spent. And 95% of companies that implement personalization see 3x ROI in the following year.
One way to achieve this level of personalization is by sending targeted communications that are both relevant and useful to the customer. When done correctly, this can create lasting customer loyalty and boost revenue growth between 10 to 30%.
(Sound complicated? Koupon can help you send the right offer to the right person at the right time. Get in touch to learn more.)
Plus, opportunities for personalization extend far beyond communication. As you can see in the image above from Snacks.com (one of Pepsi’s DTC websites), they do a great job of making the shopping experience feel personalized right from the start:
“We’ll take you step by step to find the right snacks for what you need, then save your order for next time so everything will be ready to go.”
Snacks.com also offers a customizable snack box that allows customers to pick exactly what goes into their variety pack.
3. Customers expect real-time, sophisticated customer service
Image credit: Reve Chat
Why consumers expect this
For decades, CPG brands didn’t have much to do with customer service. It fell mostly on retailers since that’s where people were shopping. But things started to change when social media came on the scene.
Suddenly, consumers expected to be able to reach brands directly — in real-time. And expectations have only risen, with 70% of consumers saying they have higher expectations for customer service than they did just one year ago.
Plus, 90% of consumers say customer service is important in their choice of brand and 58% have switched brands due to poor customer service.
What this means for CPG brands
To keep up with changing expectations, CPG brands need to focus on improving customer service by making it more personal and accessible. A good place to start is by making sure customers can connect with your brand via multiple channels. This means on your website and through email, phone, social media, and live chat.
You’ll also want a system in place that allows customer service agents to access brand interactions across all these channels. This way, if a customer reaches out initially via email but ends up using live chat, the agent can see the full picture — just like the customer.
And speaking of agents, another good step is to ensure they have what they need to solve customer problems. According to a recent survey of customer service professionals, only 50% felt they had the resources needed to do that.
A good example of empowered customer service agents comes from the customer-centric skincare and makeup brand Glossier. Glossier’s customer service department is known as the gTEAM. Members of the gTEAM respond to customer comments on social media and are tasked with creating individualized experiences with each engagement.
Glossier’s g-TEAM is actually part of their marketing department, as opposed to a separate customer service department. And g-TEAM members are called editors since content creation is a big part of Glossier's customer service strategy; they use likes, retweets, emoji-decorated DMs, and blog posts to make each piece of content engaging and authentic to the brand.
4. Customers expect you to be making moves towards sustainability
Image credit: Nestle
Why consumers expect this
According to the Global Consumer Confidence Survey, conducted in collaboration with Nielsen, 81% of global respondents feel strongly that companies should help improve the environment.
And this sentiment is shared across gender lines and generations — Millennials, Gen Z, and Gen X are most supportive, but their older counterparts aren’t far behind.
As Nielsen states, “Corporate responsibility and sustainability strategies may take different shapes around the world, but one thing is clear: Consumers are using their spending power to effect the change they want to see.”
Some specific expectations consumers have for brands include reducing the use of plastic packaging, improving product labels to highlight recycling, developing biodegradable options, and working towards the sustainable use of water.
What this means for CPG brands
According to the Consumer Brand’s Association, 50 of the top CPG brands have already made commitments to increasing recyclability, minimizing packaging, and/or reusing material.
Take Nestle, for example. Gerhard Niederreiter, Head of the Nestlé Institute of Packaging Sciences, explains that the brand has “accelerated efforts to bring functional, safe and more environmentally sustainable packaging solutions to market, shortening the time from idea to pilot or launch.
“Together with our global R&D network and external partners, we developed novel technologies and solutions to launch products in paper-based packaging, pilot new alternative delivery systems, and advance other reusable or recyclable solutions.”
The paper packaging on their Smarties product throughout the UK is a good example of Nestle’s move towards reducing the use of plastic through paper-based packaging. And as you can see in the image above, Nestle promotes this change boldly on its packaging, sending a clear message to consumers that the brand values sustainability.
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