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Leading CPG companies recognize that seizing the online opportunity is a critical step on their way of becoming a modern company. Those who strengthen core areas of e-Commerce today, will be the ones to deliver endless aisles, capture endless insights, and pursue endless opportunities for growth in the years ahead.

E-commerce, which used to be the least productive conduit to CPG sales, is now exhibiting an annual growth rate of 8.8 percent, far exceeding growth rates of other channels. If the pace of online sales growth continues—and there’s no indication, it won’t - e-commerce will be the fourth largest channel for CPG sales by 2022.

Technology has infiltrated many aspects of life, especially how fast goods are being bought and sold online. The rise of smart phones is allowing purchases to be completed at the click of a button. Technologies such as chatbots are allowing consumers to quickly find products in their online search, AI is creating a more personalized consumer experiences, beacon technology is allowing current deals and offers to be promoted directly to the consumers phone, alongside many more.

Some interesting stats around the rise of CPG in e-commerce are:

  • e-commerce could account for as much as 10% of total CPG sales by 2019
  • Online sales within the CPG industry represents a market share between $15-$50 billion
  • Petcare is ranked as the fastest growing CPG category online

Research from Nielsen and Rakuten Intelligence shows that e-commerce represented less than 5% of the CPG market for the year ended August 25, but 40% of the sales growth in the sector. As consumers buy CPGs online, they may indirectly become more comfortable with online grocery overall. Consumers' preference to physically see and choose their own groceries is the top reason they cite for not using online grocery, but the fact that CPGs are uniform from unit to unit — unlike fresh produce, for example — can help assuage this concern. If shoppers start ordering CPGs online and those orders are fulfilled without problems, they may decide to experiment with ordering other groceries online as well.

The US market for consumer packaged goods or CPG—food, beverages and other consumer goods typically sold in grocery stores—has been expanding slowly. But, online sales growth of purchases of such items continues to outpace overall sales and e-commerce for the segment is gaining market share, according to measurement and data analytics firm Nielsen Holdings plc and e-commerce market research firm Rakuten Intelligence, which recently formed a research partnership. Breaking down grocery items for the year ended August 25, Nielsen and Rakuten found that Americans spent $224 million on online cereal purchases during the year, up 41.7% year over year, making cereal the largest growing online grocery item. That was followed by a 25.8% increase in online tea sales and a 22.5% increase in online sales of nutrition drinks.