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CPGs Demonstrate Strong Online Growth

14 May 2010 - 09:09 by David Aiken

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Retail sectors that many of us may once have regarded as the preserve of bricks-and-mortar stores are now becoming an integral part of consumers' safe shopping online habits. The latest sector to report significant online growth is that of Consumer Packaged Goods (CPGs).

CPGs include items such as food, beverages, tobacco and cleaning products, which with high consumption rates result in regular replenishment orders.

According to figures from Nielsen, recently released in the United States and with the same trends reflected here in the UK, shopping online has resulted in the CPG sector now standing at some $12 billion. This figure is up by three times when compared with figures from 2004 when the CPG sector was worth just $4 billion.

Analysts predict that the online CPG sector will continue to demonstrate significant growth, potentially being worth as much as $16 billion by 2012. To put this into context with other e-retail sectors, this is over 3% of the total e-commerce sales predicted for 2012.

So who is selling CPG items online? In some cases it is specialist category-specific stores, together with online chemists and the major supermarkets. There are some products that are identified as being particularly significant in driving the growth of the online CPG sector. These include food and drink; pet products; and over the counter medicines. Various factors including improved delivery infrastructure are helping in driving CPG sales in the UK.

Some of these products are particularly high growth, with many purchasing them as part of their wider safe online shopping activities. As an example, sales of online pet products grew by 20% year on year according to statistics produced by Forrester Research and Barclays Capital. Meanwhile, medicinal sales grew by 18%, as did those of food and beverages.