During the COVID-19 crisis, U.S. consumers eat at home a lot more and order more groceries online. That’s been a boon to digital sales at Kellogg Co.
Online sales—which, for Kellogg consists mostly of online sales on other retailer websites, such as Amazon.com and Walmart.com—represent about 9% of its global revenue, almost twice the percentage of a year earlier, says Julie Bowerman, Kellogg’s chief global digital consumer and customer experience officer. The rate of ecommerce sales growth for the consumer packaged goods (CPG) manufacturer is about two to three times what it was before the pandemic, she says, without providing exact figures.
Analysis of U.S. online retail data and performance in 2022. Includes over 75 charts, forecasts for 2022 holiday sales, online penetration and offline sales, the fastest-growing categories in ecommerce, and a projection of the top online retailers in 2023.
Kellogg was ready for the crisis because of its strategic decision in 2018 to build its ecommerce capabilities, Bowerman says. Kellogg’s ecommerce strategy consists of what it calls three pillars. In the U.S. the most important is online revenue that comes via big retailers that represent the bulk of its sales. Those retailers include Amazon.com Inc. (No. 1 in the 2020 Digital Commerce 360 Top 1000) and Walmart Inc. (No. 3).
Another pillar is digitizing its business-to-business operations, allowing retailers to order wholesale stock online. The pillar is limited, direct-to-consumer (DTC) sales, primarily in non-U.S. markets.
To bring its ecommerce strategy up to speed, Bowerman says, the nearly 115-year-old company hired outside talent to boost its expertise. Kellogg also invested in training for the company’s leadership and sales organizations so they could “speak the ecommerce language,” which includes understanding how e-retailers sell products online and fulfill orders, Bowerman says. Kellogg also boosted its expertise in search engine optimization and advertising on search engines, she says.
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