27pc of consumers want digital delivery for CPG products: Deloitte

By Brielle Jaekel

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June 26, 2015

Mobile delivery and ordering is becoming more prevalent as technology grows

New research from Deloitte reveals that 27 percent of consumers are interested in home delivery for recurring purchases ordered through digital platforms, but few are actively exercising these features.

Only 11 percent of those surveyed claimed to use such services, which alludes to a divide between consumer interest and the practices of CPG manufacturers and retailers. Another important note is that research also showed 55 percent of customers turn to digital tools in the decision-making process for shopping.

“The key takeaway is that digital channels present a tremendous opportunity to reach consumers on the path to purchase regardless of where a transaction takes place but CPG companies may not be as prepared as they should be to meet consumers where, how and when they want to shop,” said Rich Nanda, principal at Deloitte Consulting LLP. “For example, in our American Pantry Study, nearly 40 percent of consumers told us they are interested in online grocery orders for in-store pick up, but only 11 percent already use this kind of service.

“To us, that signals unmet demand and opportunity,” he said. “In addition, this year’s study showed that 55 percent of consumers, an increase from 45 percent last year, are using digital channels to research food, beverage and household product information.

“So even if they are not making a purchase online, they are reaching for their devices to look up ingredients, plan tonight’s dinner, or validate product quality or experiences through reviews from people like themselves.”

Delivering relevance
Consumer packaged goods manufacturers and retailers are missing out on a huge branch of sales through mobile and digital delivery, as many customers are interested in delivery but brands have not yet perfected it.

A study by Deloitte discovered a gap between customer interests in digital delivery and usage. The number of retailers involved in digital ordering and delivery are significantly lower compared to consumer interest, leaving a substantial opening for retailers to take advantage.

As mobile and digital ordering become more prevalent through technology and brand acceptance, consumer interest grows. Although many startups and retailers are introducing digital delivery into their Web sites and mobile apps, a greater amount are not taking advantage of its potential, especially the CPG industry.

As mobile delivery services grow more widespread throughout retail, it will be become an issue for retailers not to take note. Customers may become frustrated once the most of the retail world jumps on board, leaving others behind and delivery transforms into a standard.

Also, the rise in consumer usage of digital for product research is likely a reflection of the increase in mobile resources for retail information. Many mobile users are also creating shopping lists and meal plans through devices.

In terms of CPG products, health is becoming an issue looked at more and more in the eyes of consumers. However, this does mean convenience will be sacrificed, as almost nine out of 10 consumers prefer a convenient option that is also healthy.

The study also showed that many customers are interested in the best prices, rather than being loyal to the brand they liked. Changes in the economy and excessive price comparison information through mobile could have been the factors in this behavioral change.

Retailers jumping in
McDonald’s has joined the shift towards mobile delivery by partnering with mobile application Postmates for a test at 88 New York locations, news that coincides with a business turnaround plan to increase profits and focus on consumer-driven decisions (see more).

Also, Whole Foods Market made grocery shopping more convenient by allowing customers in 15 United States cities to use a mobile application to have groceries delivered to their door within an hour in a move into the growing mobile grocery-delivery space (see more).

“These are strategic points in the shopping journey where there is an opportunity to interact with customers,” Mr. Nanda. “However, many CPG companies have been slower to deliver the functionality that would connect consumers with product information or reviews.

“These companies should create experiences that play to how their customers are shopping for their products and do more than direct shoppers to the point of purchase if what they really seek is inspiration or information.”