When you’re green, you grow; when you’re ripe, you rot. This well-known adage speaks to the marketing concept that the only way a company can survive is through continuous growth. There is no standing in place when it comes to the consumer packaged goods (CPG) industry.

Continue reading “Why market share is important for growth: A guide for CPG brands”

It’s no secret that many CPG product categories have fierce competition and are often purchased on price. This is perhaps why the CPG market is considered to be the most difficult for even established brands to grab a larger share of. If your goal is to increase market share, a mobile CPG marketing strategy that penetrates a consumer’s time in-store could help you achieve it.

Mobile app marketing is a cost-effective method for increasing market share for CPG products. Alternative options, like ramping up advertising spend, are expensive and not always guaranteed to offer a significant return on investment. Marketing via mobile apps, however, can give you a competitive advantage by differentiating your product as they reach customers in the moment of truth in-storen, driving consideration for your product.

Below, explore how your company can leverage mobile tools like geolocation, timely contacts, and shopping rewards to deliver the conversion you’re seeking from your marketing dollars. Strategies for how to increase market share of a product can be as simple as partnering with a mobile app.

Common Barriers to Market Share Growth in the CPG Industry

There are several common market share growth barriers in the CPG industry that could block your attempts to gain attention for your products. These barriers are the things that keep consumers from choosing your product, despite advertising and shelf visibility, so you must find creative and effective ways to combat them in order to grow.

Generally, a market share growth barrier will fall into one of the three following categories:

• Loyalty: It seems odd to treat loyalty as a negative, but it certainly is when a significant portion of your product’s target demographic is loyal to a competitor. Customers who are already engaged with a brand are five times more likely to choose that brand’s products over another.
• Similar products: The CPG market in the US alone is worth $670 billion, which should confirm to any CPG marketer that competition is fierce. If your product is difficult to differentiate from others in its category, it can be next to impossible to make a dent in your market share. The less your product stands out, the harder it will be to garner new attention from consumers. This is especially true if your product’s price point is higher than your competitors’ without offering some additional benefit.  
• Price point: About 10% of consumers are willing to stick with the lowest priced product, even when they’re aware of a similar product which will provide a superior experience. Consumers who are focused on price point will always be focused on price point. Because of this, pulling these consumers to your brand will only work if you discount your prices lower than others. However, as soon as your price increases again, you will likely lose that customer—and the market share they represent.

A majority of the issues that CPG brands run into when trying to increase market share for a product is that their barriers span all three categories. Their product may be difficult to differentiate from others and may not have the lowest price point, meaning they can’t gain the price-conscious consumers. However, they also haven’t earned the loyalty from consumers who are focused on quality over price. One strategy to stand out from the CPG crowd and combat each of these barriers is utilizing a mobile app to showcase and differentiate your product.

Learn How to Increase Market Share of a Product Using Mobile Apps

Despite the common barriers listed above, it is still possible to gain greater market share in your category. One of the most effective marketing strategies you should leverage is mobile shopping apps. These apps allow you to reach out to customers when they are in the moment of making a purchase decision. Third-party apps in particular, like shopping rewards apps, are ideal for increasing market share as they allow your brand to connect with a new and receptive target audience.

Here is how mobile apps help you combat the barriers to increasing market share of your products:

• Compete against lower price points without cutting prices: If you don’t want to lose margin by discounting, or want to focus on quality, shopping apps offer an alternative to incentivize price-conscious shoppers via rewards. While consumers don’t receive an immediate discount, they do earn rewards points for their purchases. This allows them to feel thrifty and budget-minded while eliminating the negative impact of discounted prices on your bottom line.
• Utilize geolocation to gain contextual relevance: Shopping apps can be designed to work hand-in-hand with beacons and other location technology. Via these technologies, shopping apps notify a consumer when they’re near your product and provide information about it. If you’re in a product category with high competition, this can allow you to gain the attention of your target audience at the right moment—i.e., when they are ready and able to make a purchase decision.
• Convert loyal customers with a trusted audience: Consumers who use shopping rewards apps tend to be very loyal to their favorite app. Often, their trust of the app will extend to any featured product or brand as well. This can be enough to pull a competing brand’s loyal customer to your side of the endless CPG aisle.

Shopping apps can increase your product’s market share without the high expense of awareness campaigns or competitor acquisitions. By partnering with a well-established third-party shopping rewards app, you can easily overcome common market growth barriers like competitor loyalty, lack of product differentiation, and price-focused consumers. Mobile shopping apps allow your product to stand out on overcrowded store shelves by communicating in the moment to an engaged and interested audience.

Shopkick’s mobile platform is used by a wide range of partners looking to increase their market share. If you’re interested in learning more about what Shopkick can do for your brand, contact our team today.

Image courtesy dolgachov

Competition among consumer packaged goods (CPG) brands is daunting; the industry is estimated at $2 trillion and most segments are highly saturated. In fact, an estimated 56% of U.S. consumers said the number of brands they consider for a given product or service has increased significantly over the past 10 years. It makes sense, then, that when brand affinity is not a factor, consumers will often make purchases based on price alone.

When markets are mature and saturated, it can be difficult for your brand to gain greater market share. Loyal customers want to stay with the brands they’ve already chosen. Cost-conscious consumers want the lowest price. Among all this competition, how can your brand hope to gain market share from its competitors? The answer is in leveraging digital marketing partnerships to reach new customers and build brand awareness.

The significant growth of the CPG marketplace over the past decade means that mass advertising and shelf placement are no longer sufficient to excite shoppers and convert them into customers. CPG brands often turn to coupons to entice and grow their customer base, but in the modern age of digital shoppers who are looking to deeply connect with a brand for more than just its price point, these steep discounts often result in nothing more than a one-time purchase—at a loss.

If your CPG brand wants to remain competitive in the new world of digital marketing, you need an alternative to the expensive discount programs of the past. This alternative can be found in mobile apps that drive consumers toward your brand as they shop. When consumers receive brand messages in real time while they are in a retail location, the sales funnel becomes short and effective, allowing your brand to naturally convert awareness into a purchase.

How Your Brand Can Leverage New Technology to Improve Market Share

In a study involving a diverse group of consumers, eMarketer noted that 73% of consumers cite price and value as top sales drivers. This hasn’t changed much in the history of selling CPG products. What has changed is how brands make consumers aware of their value and quality. Brands have to be able to gain the attention of consumers—and the digital space is the place where they must do it.

62% of millennials, one of the largest groups of consumers, use digital services to locate products. To gain the attention of these shoppers, your brand needs to shift its focus to the digital world, particularly mobile apps that travel with shoppers. The top benefits of mobile apps for CPG brands trying to determine how to gain market share from competitors are:

• GPS technology accompanies consumers on their shopping trips: Given permission, smartphone GPS technology allows companies to follow consumers throughout their day, offering mobile deals when they’re most likely to buy—and close to a store entrance. Those quick trips to the store can be used to remind consumers of a particular brand, ensuring it is at the forefront of their mind while they’re about to make a purchase.  
• Online rapport with customers: 81% of consumers research products online before making a significant purchase—and that number continues to grow. With reviews, comparisons, and the like available at their fingertips, savvy shoppers are becoming increasingly likely to turn to the internet before a purchase. That means that you may be able to take market share from CPG companies that are without a digital presence simply by having one yourself.  

As we review the statistics above, it becomes clear that a digital presence is crucial for any CPG brand competing in today’s retail market and attempting to gain market share over their competitors. However, developing an online presence requires time and significant investment, even for well-known brands like Band-Aid or Kleenex, names synonymous with a particular product. 2 million blogs, according to Hosting Facts, are published every day, with countless brands all trying to create an online presence.

Brand awareness is a major component of gaining market share. That’s no secret. But gaining that brand awareness requires the ability to stand out on digital platforms, which are often saturated with other brands attempting to do the exact same thing. To gain an edge in a highly competitive market, your CPG brand can’t start at square one. Instead, you need to find a way to use strategic partnerships to gain notoriety in the digital space.

Building Partnerships with Popular Shopping Apps

Instead of a high-cost, full-scale online marketing campaign, many brands are finding ways to work their way further down the sales funnel, reaching out to consumers where and as they shop. By leveraging the ease and flexibility of existing mobile retail apps, CPG companies can incentivize consumers without damaging their bottom line. Partnering with popular app offerings which have an established foothold in the retail market offers brands the opportunity to build product awareness and consumer trust which, in the end, leads to a greater share of their target market.

How is this accomplished? Consumers want to feel like fiscally savvy shoppers. However, CPG brands, often operating on slim profitability margins, can hardly afford to slash prices to make a sale, especially since this can lead to long-term devaluations of their brand name. After all, greater market share and customer loyalty don’t necessarily equate to profitability. Shopping apps that aggregate rewards from partner brands benefit both the consumer and the brand in three ways:

1. They can help reduce overhead associated with a full-scale digital marketing campaign: A full-scale digital marketing campaign is not a cheap endeavor. However, by working with an established app as a part of their entire marketing campaign, brands are able to reduce some overhead costs.  
2. They target motivated consumers: Shopping apps don’t target the general population. Instead, they target consumers who are interested in learning more about products. When consumers download these apps, they want the app to contact them about the brands they partner with. Rather than simply advertising at consumers, these apps interact with consumers. That interaction leads to brand affinity and ultimately larger market share down the road by creating a value exchange between the brand and the shopper.
3. They offer an existing audience base: One of the biggest challenges in app marketing is gaining adoption. This is particularly challenging for CPG brands as consumers are very unlikely to download an entire app focused on one single product. This is why established shopping apps are ideal for CPG brands: they offer a built-in audience.

CPG brands spend roughly $225 billion on marketing each year, with discounts that cut into margins. Brand managers are beginning to approach marketing in a new way, however. App-based advertising programs are becoming a highly profitable addition to digital marketing strategies as they draw in consumers without requiring companies to compete at a loss.

Brand awareness breeds greater market share. Partnering with the right shopping apps can significantly increase awareness of your brand, allowing you to claim a greater share of your market segment from your non-digital competitors. By leveraging strategic partnerships with popular mobile shopping apps, your CPG brand is given access to an active user base in the digital space—and all without the risk and high cost of a stand-alone digital program.

Shopkick offers our retail and CPG brand partners a new voice in a saturated marketplace. To connect with Shopkick, contact us today.