CPG brands: The digital effect of COVID-19 is here to stay

Guest Column: Sandeep Balani, the Head of India at Outbrain, writes that a new appetite for digital purchases of food & beverage is on the rise

e4m by Sandeep Balani
Updated: Aug 26, 2020 5:19 PM
sandeep balani

Throughout the world, restaurants have reopened in countries that passed their first Covid-19 peak. While people wasted little time reacquainting themselves in their communities by going to packed establishments, this recovery may ultimately be a short-lived trend, with Leicester, Melbourne, Beijing and other cities are going into the second round of lockdown. Considering the rise of digital retail and consumer habits moving online, it seems that the digital purchasing of food and beverages is not only catching up but is here to stay. 

The ‘New’ Appetite for Consumer Packaged Goods

Similar to almost every other retail category, online sales of food and beverage has risen considerably in light of Covid-19. However, the pandemic has only fast-tracked a more permanent shift to e-commerce that was already underway, with alcohol sales being a main beneficiary. In the UK, online alcohol sales were growing four-times faster pre-Covid than in physical establishments, indicative of a broader shift taking place around the world. Young consumers, especially millennials, have led the pack in online alcohol purchasing. They’ve also driven the trend to re-create a bar drinking experience in their own homes, leading to a boost in sales of pre-bottled cocktails, bitters and vermouth. The current crisis has only led consumers, including those previously hesitant or unsure of buying alcohol online, to experiment more and stock their home bar. Data insights firm, Kantar, recently estimated that 30% of new customers who buy alcohol through digital channels would remain long-term users. 

Buying Online Is Now A Permanent Option

To understand if our premier publisher audiences in the European counterparts felt differently about ‘drinks at home’, we ran a survey on Outbrain’s network in the last week of June. The results shine a light on consumers’ attitudes towards premium drinks and online advertising. Since mid-March 2020, 65% ordered or considered ordering a home delivery of premium drinks, of which 81% were exposed to advertising related to buying drinks online. Two-thirds of respondents also enjoyed the same drinks at home as they would order at their local pub. Conversely, one in three of those who hadn’t ordered drinks online hadn’t seen any advertising for it. These insights clearly show that online advertising is not only a key touchpoint for consumers to explore new options for packaged goods, but acts as a catalyst for purchasing. 

Get Discovered with Native Advertising

At the start of confinement, people leaned on alcohol brands that they knew and loved. However, as time went on, people were eager for a new experience, looking to discover new brands to buy from. In fact, 12% of consumers say they've tried new brands or new varieties of beverages during the lockdown. Additionally, Gen Z consumers have been experimenting the most with new brands since March, according to a June survey by Drizly. 

As people explore the open web and visit their preferred news sites for daily updates, native advertising provides that ‘what’s next’ moment for consumers, allowing them to discover and interact with new brands. Unlike display, native advertising is user-initiated and doesn’t disrupt a consumer’s digital journey. Best of all, consumers who discovered brands on a premium publisher were 54% more likely to make a purchase. In fact, their purchasing intent was twice as much as receiving an email offer from an unknown brand, and higher than seeing an influencer endorsement on social channels. 

A CPG Success Story with Native Advertising

For brands to boost long-term loyalty and consideration in this new normal, using their influence for social good goes a long way to strengthen their bond with consumers. A Kantar global survey showed that 75% of consumers want brands to talk about their efforts in addressing the pandemic, and another 54% said they want brands to balance great products with powerful purpose and activism. 

Naked Wines, an online wine retailer in the UK that sells from independent winemakers worldwide, showed they have an authentic ‘double bottom line’ by promoting its $5 million support fund across digital platforms for winemakers affected by Covid-19’s disruption.

The company relies on native advertising as a key channel to deliver some of its highest quality new customers. Over the past year advertising on Outbrain’s premium publisher network, Naked Wines has generated over 200,000 leads and sold 80,000 wine bottles. Most importantly, their campaigns on Outbrain have delivered a 40% better lifetime value than Naked Wines’ average customers. This demonstrates the power of the ‘halo effect’, which is created when consumers trust in publisher sites and, therefore, trust and purchase products advertised in these spaces. 

Successful brands will navigate through this current situation by learning and adapting their strategy with the consumer in mind. Online purchasing of food and beverages will never elbow out the restaurant and bar experience, but the rise of WFH (wine from home) presents a real opportunity for brands. Moving forward, people will likely take a mixed approach, and in the event of a “lockdown, relax, repeat” scenario, it is only logical that CPG brands ensure they have an effective digital strategy to ensure their brands are keeping bar cabinets and kitchens filled for a night in.

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of exchange4media.com.

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