The beverage business needs to crack the code of how to prompt shoppers to buy on impulse online.
The bulk of consumers still purchase their groceries in traditional brick-and-mortar stores, but analysts expect more to go digital. Skipping the grocery store and shopping online could put impulse purchases, and some profit, at risk. However, big companies may be equipped to tackle the shift.
Online purchases represent only 2 percent of food and beverage sales, compared with 12 percent of total retail, according to Kantar Retail data presented by Macquarie Research analyst Caroline Levy at the Beverage-Digest Future Smarts conference on Friday. That's on pace to grow to 5 percent by 2020.
In theory, the web offers an unlimited shelf where consumers can access an infinite number of brands. However, that concept has been debunked, said Alliance Bernstein & Co. analyst Ali Dibadj, citing research showing 64 percent of customers buy the first three items, and 81 percent buy on the first page.
That makes product placement more important than the endless shelf concept suggests. Getting the best spots involves buying them, giving big companies a potentially better advantage than smaller ones.
"Everybody's talking about the endless shelf and long live smaller brands," Dibadj said. "Go look at Amazon over the last 12 months and see how many sponsored ads there are. Deep pockets are paying for those sponsored ads."
Of course, consumers can search for the specific products and find those online. But first they have to build the brand. That can include getting samples into their hands so they know what they're trying to find.
Consumer product goods companies as a whole haven't properly addressed how to push impulse online, Dibadj said. Some would likely argue against that.
has touted its e-commerce efforts. It's trying to cover all areas of the map, incoming North American President Jim Dinkins said in a presentation at the conference on Friday. One technology it has tested to prompt impulse purchase through digital is a click-and-collect technology that encourages people to add a Coke product to their purchase.
It's too early to say who will win the online wars and how they will win it. But with the cold beverage category growing 72 percent on Amazon in the third quarter, according to One Click Retail data from Levy, companies like Coke, and are sure to continue trying to figure it out.
