Consumer Packaged Goods Merchants Leverage Subscriptions for Huge E-Commerce Growth

Feb. 15, 2016

Consumer Packaged Goods Merchants Leverage Subscriptions for Huge E-Commerce Growth Consumer packaged goods (CPG), a category that historically has not performed well in e-commerce, rose 42 percent in 2015 on the back of the subscription model, according to a new report. CPG outpaced e-commerce retail in general, which still produced a very healthy 30 percent gain from 2014 to 2015, said data analytics firm 1010data. While the New York City-based company said much of the growth in CPG was fueled by a single company—Amazon—it was the way Amazon sold the products in that category that presents interesting opportunities to other e-commerce retailers.

1010data found that 20 percent of overall growth in CPG e-commerce sales came from Amazon’s Subscribe and Save feature that automatically sends consumers products like pet food, diapers and coffee on a certain schedule. Subscriptions are, increasingly, being used to sell all kinds of products and merchants are finding more creative ways to leverage the model than ever before. CPG is simply the most recent.

“E-commerce is still less than 10 percent of total sales [in the U.S.] and often less than 5 percent for major CPG manufacturers such as P&G, J&J, Unilever, Mondelez, Coca-Cola, and Pepsi,” said 1010data’s Aaron Mendez. “However, the majority of their sales growth in the U.S. is coming from e-commerce in many categories.”

Educational sessions on subscription billing will be featured at this year’s CNP Expo, May 23-26 in Orlando, Fla. Hear a panel composed of merchants and subscription-billing technology providers as they discuss how to optimize authorization and the importance of reporting and data analysis for merchants that want to leverage subscriptions to increase revenue. Check out the CNP Expo agenda and register today .