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PepsiCo has announced that it will be investing in its e-commerce business, which now brings in approximately $1 billion in sales annually, according to Business Insider.
The exact amount that will be invested, and how it will be employed, was not revealed, but the funds themselves will be coming from PepsiCo’s savings under the new tax plan in the US. PepsiCo already has a team of about 200 employees dedicated to its e-commerce business, and this additional investment may further their efforts.
The investment may be an effort to get better at inspiring impulse buys online. E-commerce has changed how impulse purchases are made, and with approximately 30% of beverage sales coming from impulse buys, according to Ali Dibadj, an analyst at Bernstein, PepsiCo, Coca Cola, and other competitors need to find a way to inspire more of them online.
This investment by PepsiCo could go toward developing new digital channels and innovations to give consumers new and exciting ways to buy food and drinks. PepsiCo should also consider determining the best kinds of packaging and presentation to draw impulse purchases online. Since consumers can't feel a beverage’s packaging or see it as they would in-store, which is a driver of impulse buys, having specific e-commerce drink models or marketing could pay dividends.
With the advent of fast delivery and online grocery, food and drink consumer packaged goods (CPG) companies have a better chance of driving impulse purchases through e-commerce.
- One-hour delivery and instant pickup lockers give consumers the ability to get their impulse buys almost immediately. One of the main drivers for in-store impulse food purchases is that the customer gets to eat or bring the products home immediately. However, it's been difficult to replicate this experience with online sales. But with Amazon’s one- and two-hour delivery through Prime Now, consumers can get their products quickly. And Amazon’s “Instant Pickup” locations are also worth keeping an eye on, as they make online orders available as soon as two minutes after they’re placed, which would be even closer to the convenience of the in-store impulse experience.
- Online grocery is growing fast, and consumers’ main concern barely applies to CPG, which should help such companies thrive online. Seventy percent of consumers are projected to order food or beverages online as soon as 2022, up from 23% in 2016. One of the main holdups for online grocery is that consumers want to pick their own products. Luckily for CPG companies, this isn’t as important for them, because, unlike produce, their products are more consistent and worry consumers less, which could allow them to thrive in online grocery.
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