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04/22/2022

How CPG Brands Can Make Instant Commerce a Profit Center

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The CPG industry saw some bright spots in 2021, including continued growth in e-commerce sales and a welcome return to in-store shopping,but many of the major obstacles brands struggled with last year are continuing to keep executives up at night. 

From snarled supply chains to rising inflation to higher customer acquisition costs, a laundry list of ongoing challenges are prompting brands to find new ways to grow revenues and customer lifetime value while maintaining full ownership of their customer relationships and brand experience.

For DTC brands, which consumers often purchase from daily and tend to want right away, providing an excellent post-purchase experience that includes quick, reliable delivery can drive profitability. Brands that successfully deliver a frictionless instant commerce experience typically see an immediate boost in customer satisfaction as well as increases in conversion, repeat purchases and customer lifetime value. 

However, CPG brands face some particular risks when they hand over their instant commerce channels to third-party marketplaces. They lose control of their post-purchase experience, and risk disappointing the customers they’ve invested so much in acquiring. To ensure instant commerce is a profit center rather than just another operational cost, brands need to maintain ownership of their post-purchase experience and customer relationships and data.

Here are three ways CPG brands can build sales and loyalty through instant commerce:

Ensure Fast, Convenient Delivery

Consumer expectations have changed at an unprecedented rate over the past few years, and one of the most significant new demands brands must keep up with is shoppers’ need for speed. Two-day delivery simply doesn’t cut it anymore. Brands that offer instant delivery options, including two-hour delivery and scheduled same-day and next-day delivery, will drive conversion and lifetime value by offering flexibility that fits into consumers’ lives and meets their varied delivery needs.

Gather and Leverage First-Party Data

In a years-long study conducted by Google and Boston Consulting Group, the companies found that “those using first-party data for key marketing functions achieved up to a 2.9X revenue uplift and a 1.5X increase in cost savings.” 

“Read more: Coca-Cola, Kraft-Heinz, Unilever: CPG Companies Embracing the Data Revolution]

When brands hand over their instant commerce channels to third-party marketplaces, they surrender much of their data and lose control of their customer relationships, one of the most integral aspects of any successful business. To optimize instant commerce, brands need to take ownership of their delivery experience by partnering with platforms that integrate seamlessly with their e-commerce site and enable them to gather and use their own customer data.

Build Loyalty Through the Post-Purchase Experience

Providing an excellent post-purchase and delivery experience helps keep customers coming back for more, increasing order frequency, average order value, and lifetime value. According to CI&T’s 2021Connected Retail Report, great customer service was among the top three attributes that would bring consumers back to shop again, while PWCreports that one in three consumers are willing to walk away from a brand they love after just one bad experience.

Brands that are able to own the entire customer experience and keep their custom brand identity front and center all the way through checkout, order tracking, delivery and unboxing, can increase awareness and loyalty.

The post-purchase experience is a key to customer satisfaction, retention, and lifetime value. For brands looking for ways to grow their businesses and counter higher customer acquisition and operational costs, instant commerce is proving a profit driver rather than just another cost driver.

By partnering with technology platforms that leverage data analytics and localized fulfillment networks, CPG brands can customize their instant commerce experience to keep their brand story front and center, while maintaining ownership of their customer relationships.

—Ben Jones, Founder & CEO, Ohi

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