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Digital shelf & eCommerce growing pains - why channel proliferation is one of the key battle grounds for CPG brands from now to 2030

Channel proliferation isn’t a new challenge for brands, media fragmentation has been occurring for over a decade, making the challenge of reaching audiences cost effectively a minefield.

But over the past 5 or so years, so too has the eCommerce market begun to fragment locally and globally, creating a new and unique set of challenges for CPGs brands.

With the rise and adoption of marketplaces locally, the emergence of quick commerce platforms, social media’s big pivot to social commerce along with the dawn of live shopping and conversational commerce there are now plethora of new ways for consumers and shoppers to discover and buy based on the different missions they are seeking to fulfill. Whilst core channels are still vital, CPGs increasingly need to balance driving growth from the core (e.g.  DTC or via core retailers), with investing and experimenting within emerging channels to remain relevant, drive incremental sales and build capability for the future.


Why being discoverable across an array of channels is now hygiene

Whilst instore shopping is still preferred by many and online retail is still one of the preferred way to shop online.  Australian consumers are increasingly using an array and mix of channels to buy. Nearly a third of consumers planned to shop via a comparison site (marketplace) in 2023 and social media was also planned to be leveraged by 13% of Australians, whilst DTC was also planned to be leveraged by a quarter of consumers who prefer to buy direct. What the below demonstrates, is that to remain relevant CPG brands need to be available in the places and spaces where consumers are discovering and buying products and prefer to buy, acknowledging that certain channels lend themselves to particular categories more than others.  

chart showing how Australian consumers plan to shop  in 2023shop
A closer look at the B2C and B2B2C eCommerce marketplace down under creating new opportunities and pain for CPG brands

Here at Arktic Fox, we like to talk about the market through the lens of six eCommerce domains, acknowledging that not all domains are relevant to every CPG as it depends on the category or categories within which they operate, and the missions they serve. Many of the domains are still emerging and evolving, but based on adoption and growth what is clear is that the market could look very different over the next 5 – 7 years locally.

Marketplaces: Whilst channels like marketplaces are not new - eBay entered the Australian market in 1999 - the growing dominance of marketplaces like Amazon and Temu cannot be underestimated. According to Pattern, marketplace shopping has become mainstream in Australia, with research highlighting 93% of people shopped on a marketplace in 2023 and 94% plan to buy from platforms like Amazon, Catch, Temu, and eBay over the coming year. As the cost-of-living squeeze is on many Australians are turning to these platforms to seek out better value – through bulk buying as well as the ability to review a broader range of products at low prices.  The social commerce space in Australia is expected to grow by 12.3% on annual basis to reach US$1.83 billion in 2024 with a total of 6.4m Australians engaging in social buying. In categories like health and beauty the shift to social buying has been swift and significant, whilst other categories it has been more subdued. But with TikTok’s relentless focus on expanding TikTok shops, and Meta still evolving its shopping tools, there is much growth. What social media does, that many other channels in the eCommerce fail to do well is enable product inspiration and discovery, making them ripe for impulse buying, gifting and more. And not without controversy is quick commerce, dominated by Uber who is partnering with brands across an array of verticals from grocery, to apparel to deliver on the need it now mission with the promise of fast hassle-free delivery.  

6 domains of ecommerce


Where Australian CPG brands are investing their time and energy

With an increasingly number of places to buy from, CPG brands are being challenged to re-think their eCommerce channel strategies to place emphasis and focus on emerging channels. Our 2024 digital, marketing and eComm in focus study has found that CPG brands in Australia (including FMCG | Manufacturing & Pharma) are currently leveraging 2.46 channels across the eCommerce ecosystem (a channel for the purposes of the study was a channel type e.g marketplace or quick commerce).  So whilst this doesn’t seem significant, it is once you extrapolate out the individual platforms and channels. For example Arnott's is leveraging Coles, Woolworths and also IGA as part of their core grocery | online retail channels. Arnott’s is also on Amazon and Catch. Arnott’s products are then ranged by various providers on Uber Eats and potentially even DoorDash, which means they are needing to actively manage 6+ channels from an eComm perspective. And that’s before you factor in any DTC stores – whilst there is evidence that there is a Tim Tam merch store, it is difficult to determine how active the platform is.

The study has found that CPG brands are already deploying a mix of channels to reach key and new audiences when it matters, and when combined with plans to adopt new channels demonstrates channel diversification is a key focus for many. More than 50% of CPG brands stated they are leveraging marketplaces and more than a third are already deploying social commerce (and 22% planning to do so in the year ahead), whilst 20% are leveraging quick commerce.


image showing which channels retailers are using

Whilst many brands are already on these platforms, one of the core issues is they are struggling to proactively manage the channel and go beyond a basic presence. Simply being there isn’t enough to reap the rewards, but not being there will erode share today and overtime and also impact a brands ability to build knowledge and capability in managing these platforms.  

So how can brands best grapple with the need to show up where and when it matters most to maximise share and sales across a growing number of channels?


Invest in and streamline product content management

To succeed in an environment where audience fragmentation is a reality, brands must put content at the core of their eCommerce strategy. Content plays such a critical role in driving discoverability, influences decision making and is the online equivalent of investing in packaging for the instore shelf. Few brands locally have really grasped the importance of effective product content management, opting for a “compliance” led approach to deliver the minimum for retailers and other channels, as opposed to thinking about the platform and how to best win within the different channel environments.

Brands need to consider the platforms that are core to their success, and consider what is required to win from a content perspective and work back from there to form robust content standards that stand the test of time, as product content needs and requirements will become more immersive to enhance the online experience and replicate that of instore.

Brands also need to consider how to effectively and proactively manage content across the environments that they operate. Aggregating product content into a central repository and enhancing product content to meet shopper needs, feed management and optimisation, syndication, search optimisation and content measurement and effectiveness are all important considerations and capabilities CPGs must wrestle with if they are to build the muscle to effectively manage their eCommerce presence.


Shift mindset only offering line and price to mission led offerings and merchandising

As can be seen within the 6 domains of eCommerce, different platforms and channels fulfill different missions for shoppers. To maximise share and drive growth, CPGs need to consider the missions and occasions that are driving shoppers to shop across different platforms and how to effectively merchandise and build propositions that meet different needs. For example a grocery CPG brand might offer individual SKUs within core grocery channels, whilst on marketplaces they may bundle to offer great value on a bulk purchase, and then within quick commerce they may develop a meal solution that enable a consumer to quickly bring together ingredients in a meal.


Pricing management

As products are disseminated across a greater number of channels, pricing management becomes even more critical to enable brands to maximise margin and ensure pricing is managed in a proactive and intentional way without diminishing brand value. What is also important here is to more proactively manage intermediaries like distributors – determining if they can show up on 3rd party platforms and define any guardrails to how they show up from a pricing perspective online.


Shifting resource from offline to online and clarifying accountabilities

One of the more challenging aspects of managing a burgeoning number of eCommerce channels is the need to effectively resource eCommerce. It is not unusual within the Australia market to see even large CPGs allocate one resource to manage all things eCommerce. The lack of understanding of the influence digital plays on driving instore sales, combined with a lack of clarity around the true value of eCommerce sales, sees many grossly underestimating the value and return of eCommerce for their businesses and brands which results in few resources invested to tackle the opportunity.  eCommerce and digital is resource intensive particularly if we are to go beyond a “pay to play” approach through retail media and seek to tap into the organic opportunities that channels afford.

Whilst additional resources are a must to consider, so too should brands consider the broader accountabilities across the teams to ensure eCommerce is embedded as BAU instead of being seen as the role of one or two individuals. Brand and marketing and sales play an important role In managing product content, nurturing partner relationships and understanding what is possible with channel partners and without clarity of role key activities can fall through the cracks and eCommerce is not prioritised by core parts of the business.    



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