How CPG Companies Can Optimize Online Selling Strategies To Maximize Ecommerce Margins

The Covid-19 pandemic has boosted online sales of consumer packaged goods and, according to a recent Prosper Insights & Analytics, 44.6% of adults aged 18 and over change their purchasing behavior and buy less in stores. As a result of this change, even CPG categories that have historically been slower to embrace e-commerce, such as the food and beverage industry, have started to shift strategies and dedicate resources to online channels.

This same Prosper Insights & Analytics reports that 45.2% of adults aged 18 and over believe that the changes they have made to their shopping behaviors due to Covid-19 will become habits after the pandemic ends, so it is clear that the tapping these online channels is crucial as businesses look to the future. However, e-commerce presents unique challenges, and many companies are treading cautiously to avoid having thinner margins than they have because of the proven brick and mortar channels.

I met Chuck Coyle, Director of Ecommerce at Idaho Foods to discuss how this leading brand of freshly dried mashed potatoes has successfully integrated e-commerce into its omnichannel strategy. Idahoan kick started its e-commerce efforts in 2019, navigated uncharted waters during the pandemic, and implemented a number of effective online strategies along the way with the goal of becoming an e-commerce leader during the course of the pandemic. five years.

Gary Drenik: How did Idahoan Foods get into the world of e-commerce?

Chuck Coyle: We kicked off our e-commerce effort in earnest in 2019. Like many brands, we started out on home delivery services like Amazon and online sales platforms like Instacart. As our presence increased on these channels, we saw the need to create a centralized repository of digital assets and content that we could easily distribute to all of our partners. This allowed us to have consistent messaging across all platforms, with the ability to effectively grow our business. We focused on the best ways to build awareness of our brand and intercept consumers throughout their buying journey through digital marketing. On March 1, 2020, we took our e-commerce efforts to the next level by launching the very first direct-to-consumer website.

Drenik: How has the Covid-19 pandemic affected Idahoan’s e-commerce strategy?

Coyle: Overall, the pandemic has accelerated the adoption of e-commerce by four to five years. The changes we expected by 2025 – such as the growth of in-store grocery collection and delivery, consumers’ adaptation to new technologies, and more – are happening now. We had to be nimble and pivot quickly to keep up with the new buying behaviors that quickly emerged over the past 18 months.

At the same time, Idahoan has kept its priority on promoting the business attributes that set us apart from our competition: offering a convenient side dish made with 100% Real Idaho potatoes, our primary relationship. plan with our retail partners, and how we provide a product-friendly prep.

The pandemic has caused a significant channel change for many consumers, many of whom have shifted their in-store shopping habits to online, and it became clear that we need to work to retain our current customers and introduce our products to people. new consumers.

Drenik: What are the main challenges that CPG companies and food brands face when it comes to e-commerce?

Coyle: The main logistical challenges that many CPG companies face relate to shipping, warehousing, and generally on-demand in a channel where forecasts can be more unpredictable. In Idahoan, a struggle we overcame after launching our DTC site in March 2020 was the wave of orders we experienced at the start of the pandemic. It was light years ahead of what we had planned and initially put a huge load on our warehouse.

However, it was important that we were available to our customers for an unprecedented time. Everyone from senior management to the order fulfillment teams stepped up to ensure that shipments were delivered in their entirety and on time, while keeping our teams safe. We have also leveraged our fantastic relationships with our retail business partners as they worked on implementing new e-commerce strategies. This has proven to be an extremely valuable lesson for our team, putting us in a better position to handle demand in the future.

Drenik: How does Idahoan work to retain current customers as they change their shopping habits to include more online shopping?

Coyle: It is important that we make sure Idahoan products are easily detectable through keywords and product placements on our partner sites, while reminding consumers of the unique attributes of our products such as our process. exclusive and the way we use real potatoes in all of our products. Additionally, digital marketing has been part of Idahoan’s strategy for a long time, and many of our long-term tactics are helping drive traditional retail sales and e-commerce. We use targeted advertising on buying decisions and recently implemented a global social media flavor recipe strategy to encourage consumers to “travel the world” through their taste buds. Last year, we coordinated the TikTok challenges that increased brand awareness with over 14MM views and a 20% engagement rate, surpassing the industry benchmark. When working with Instagram influencers, we’ve even been able to direct consumers to our DTC site via ‘Swipe Up’ on Stories and links in their bio, and we’ve created unique coupon codes for the DTC site. for subscribers of these partners.

Drenik: What are the key elements that make the success of a direct-to-consumer website?

Coyle: We see our DTC site as an opportunity to engage directly with our consumers, to surprise and delight them. We do this by shipping the majority of our orders the same day using 2 day shipping. We always include additional freebies like stickers, recipe cards, and a note from our CEO. We now also offer a DIY variety pack, so consumers can order 12 of our Idahoan Flavored Mashed Potatoes in their favorite assortment, a unique e-commerce opportunity. Any of our products can even be ordered as a subscription, where consumers have them delivered regularly, at a reduced price with free delivery.

Drenik: What steps has Idahoan taken to optimize its e-commerce strategies each year?

Coyle: In 2019, we were just starting to get our feet wet, but we had an amazing year as we worked to expand our presence on home delivery services and online sales platforms. The launch of our DTC site was a big milestone in 2020, and the pandemic has sped up the process in ways we never expected. Additionally, with our B2B functionality in our e-commerce store, we can now make our catering products directly available to business owners.

In 2021, we focused on growing sales on each of these platforms by educating consumers about the availability of our products through e-commerce channels. With the growing trend towards online grocery shopping, we are ensuring that our existing fans include us when they choose to shop through e-commerce channels. But we also have the opportunity to increase our household penetration by engaging with new buyers of our brand. Going forward, this is how we plan to become a leader in the e-commerce grocery industry.

Drenik: As more businesses look to adopt online sales strategies, thank you, Chuck, for your ideas on what made Idahoan’s e-commerce efforts successful.

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