COVID-19 is changing the game for retail and CPG brands in particular. While brick and mortar grocery stores have restricted hours and regulations, and restaurants have closed down, CPG brands are experiencing a 34% growth since March resulting from changing consumer behaviors and needs. Consumers at home are planning meals and stocking up on packaged goods with long shelf lives like canned and frozen foods. Stress eating is sending sales of packaged comfort foods through the roof, with ice cream and novelty food (such as baked goods and potato chips) sales up 900% year-over-year during the 10 weeks from March 1st to May 15th. Other top growing categories include toothpaste, soda, sports and energy drinks, and beauty and hygiene products. It’s safe to say there’s an opportunity for those CPG brands that can connect with their audiences.
However, with this opportunity, come challenges. Most retail stores and restaurants have been forced to temporarily shutter, driving consumers online. Supply chain disruptions, particularly for cleaning supplies and hygiene products, have forced consumers to consider brands they wouldn’t have previously looked at. There have also been demographic shifts in who is actually doing the shopping. While women are usually the buyers for the household, men are shopping more and are more likely to go for the best deal than remain loyal to a brand. Products that consumers would normally grab at a drug store are now being ordered online. Consumers that might not have worried about their budgets before, are tightening their belts and looking for greater value. Historically, CPG brands have lacked direct connection with consumers and so have not had much first-party data. The pandemic is providing CPG brands with the opportunity to make direct connections with their customers and rely less on a retail middle-man. CPG brands need to adapt their marketing strategy to address these new behaviors in order to reap long-term success post-pandemic.
We know consumers are home and online. Now is a great time for CPG brands to use digital channels to engage and grow their audience. Instead, during the 2008 recession, Procter & Gamble Co. increased their marketing budget and the strategy paid off. P&G experienced a 6% sales increase in the U.S. the last quarter of 2008, more than double the 2%-3% growth in retail sales it tracked in its categories and ahead of its 5% organic sales growth globally. The current pandemic is both global and doesn’t have an end-date. While brands should be budget-conscious, disengaging their prospects by going dark is the wrong choice.
Re-engage existing customers and prospects through remarketing. Create highly-targeted remarketing campaigns to reach consumers who visited your website on various digital platforms – especially e-commerce platforms such as Amazon.
Remarketing is a great way to increase conversion rates.
Pro tip: When re-engaging inactive subscribers remember to take into account how long they’ve been inactive. Emailing a customer who hasn’t been active in 5 years might be intrusive.
Brand Example: Overtone: Engages audiences through relevant email messaging
Hair color company, Overtone, has kept steadily emailing consumers since the start of the pandemic with relevant, varied messaging to promote engagement. The company emailed customers at the start of the pandemic to update them on their supply chain delays and what that means for customers’ orders. They also attempted to engage inactive customers with a “you’ve been on our mind” email. The brand knows that many of their customers get their hair professionally colored and they might be flailing at home, alone during the pandemic. So they also offered customers value-added content, including a tutorial by an influencer on how to tone your own hair at home.
Providing varied, personalized and compelling content is a winning strategy for a brand trying to keep their audience engaged during a pandemic.
Consumers are working from home – and home is the best place to reach them. The time is perfect for CPG brands to invest in direct mail. Direct mail campaigns can be extremely successful. According to research done by Data Axle, 58% of consumers regularly read the direct mail they receive and 40% of consumers would purchase a product they learned about through a direct mail campaign. Direct mail also outperforms certain digital channels when it comes to ROI.
Brand Example: Hello Fresh
Subscription-based meal kit delivery service, Hello Fresh, has invested heavily in direct mail marketing since their inception in 2011. As a result of the pandemic, in heavily populated areas, such as New York City, grocery delivery services don’t have the capacity to deliver to everyone who needs it. Many New Yorkers have turned to meal delivery kits, such as Blue Apron, Hello Fresh, and Purple Carrot. Hello Fresh frequently mails coupons and offers. They also reach out to lost customers through direct mail with generous offers to entice them to reactivate their subscriptions.
Another smart strategy during the pandemic would be for Hello Fresh to expand their target customers in high-density areas. While the urban professionals have always been a target market for Hello Fresh, they might now consider targeting parents who are homeschooling children all day and no longer have the energy to take on tacking the question of “what’s for dinner?” every night. Teens who are interested in learning to cook, because they are bored or to help their parents who are now working from home might be a smart move right now as well.
Due to the pandemic, consumers are buying more packaged goods. There’s a huge opportunity for CPG brands to increase their market share, but in order to do so they have to expand their current marketing strategies to engage at-home audiences who are in savings mode.
Learn how retailers are overcoming new economic challenges and meeting high consumer demands by downloading our whitepaper, The Retailer’s Guide to Marketing Data.
As Content Marketing Manager, Natasia is responsible for helping strategize, produce and execute Data Axle's content. With a passion for writing and an enthusiasm for data management and technology, Natasia creates content that is designed to deliver nuggets of wisdom to help brands and individuals elevate their data governance policies. A native New Yorker, when Natasia is not at work she can be found enjoying New York’s food scene, at one of NYC’s many museums, or at one of the city’s many parks with her two teacup yorkies.