The ecommerce incrementality boost: What is the true impact for CPG brands?
As online grocery shopping becomes more popular, CPG brands are wondering: what is the incremental sales impact when a shopper begins purchasing groceries online? And how long does the “incrementality boost” last for key brands? These are just some of the critical questions for CPG brands to understand as more households engage with ecommerce. As noted in our recent omnichannel report, "Among monthly ecommerce trips over the past year, what started as a spike in trips due to necessity and safety concerns has shifted into a maintained-to-increasing behavior across the spectrum of ecommerce loyalty." Ecommerce or online grocery shopping presents enormous opportunities for brands—but only if they have the right insights to maximize results.
The incremental sales boost
Ecommerce incrementality is a measurement approach that helps brands understand the incremental sales impact of shoppers engaging with ecommerce, including online grocery. Through testing, brands can gain insight into how customers change purchasing behavior when they begin shopping online. This helps identify how much of an incremental boost ecommerce provides for specific categories and brands. For CPG brands, knowing the true impact of ecommerce sales is crucial. Common questions include, has ecommerce attracted net new customers or are the same customers shifting their purchases from in-store to online? Which brands benefit from this incrementality? Ecommerce incrementality enables brands to quantify the sales uplift from households trying online grocery shopping for the first time and other segments. With this data, brands can prioritize marketing to make it relevant for valuable customers.
The cost of not being online
To fuel ecommerce growth effectively and efficiently, brands need actionable insights. In working with clients, we’ve uncovered insights such as:
The cost of not being online, i.e., how incremental ecommerce is to the brand
Which brand products see positive versus negative uplift from a shift to ecommerce
How long the incrementality boost lasts
The regions with the highest incrementality
Which brands should be prioritized for ecommerce investment
Which brands experienced negative incrementality while their competitors haven’t
Ecommerce incrementality testing reveals these insights and more. For instance, when households first try online grocery, they may stock up on certain brands and categories, driving an initial spike in sales. However, this boost may be short-lived before shopping patterns normalize again. Understanding the length of the incrementality window enables brands to make informed decisions and plans. It also helps forecast sales realistically once the initial boost subsides.
As households add online grocery to their shopping habits, ecommerce incrementality measurement provides crucial insights for brands on the sales impact. Testing incrementality reveals learnings such as the value, duration and location of the incremental sales boost, enabling proactive decision-making to win with omnichannel shoppers.
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