The store is no longer the only place where consumers can discover and shop for consumer packaged goods (CPG) products. Younger generations are finding products via search and social media, while Amazon Prime Day offers shoppers the opportunity to stock up on essentials for less.

Perhaps because of this, CPG’s share of digital ad spend and its ad spend growth will see a comeback next year after a few years of decline, according to our forecast.

Here are five charts on how an increasingly digital world is changing the CPG industry.

1. Gen Z is more likely to discover CPG products on search than on store shelves

Over a quarter (28.0%) of Gen Z consumers have discovered grocery products via search engines, compared with 16.7% that have discovered products while browsing store shelves, per our May forecast.

Age is the determining factor in willingness to try new products, with millennials and Gen Zers more likely to branch out than Gen Xers or baby boomers, according to our CPG and Grocery Product Discovery 2023 report.

2. Social media is also playing more of a role in discovery

Gen Zers are also prone to finding new products via social media, with TikTok and Instagram being the leading platforms where they discover CPG items, per a Tinuiti report from March. On the other hand, total shoppers (or at least those that do discover new products through social media) prefer Facebook.

Brands that want to boost discoverability of their products on social media need to know where their target audiences are spending their time and tailor their messaging to that platform.

3. CPG digital ad spend is expected to bounce back next year

CPG is the second-largest industry spender on digital ads behind retail, per our forecast.

But the industry’s digital ad spend growth and its share of spend have declined over the past few years, according to our US CPG Industry Digital Ad Spending 2023 report. Both are due for a comeback in 2024 as the economy stabilizes and CPG companies begin to feel less pressure on their bottom lines.

4. Though on-site ads dominate CPG, off-site formats are growing in importance

US CPG companies will spend $39.50 billion on digital advertising this year, according to our US CPG Industry Digital Ad Spending 2023 report. The majority of that will be spent on display ($22.33 billion) and search ($16.18 billion) but dollars are flowing to other formats like email, lead generation, and mobile messaging.

Retail media networks looking to secure CPG ad dollars need to consider off-site formats too, like social media or connected TV (CTV), as evidenced by the Path to Purchase Institute’s April survey of ad agency professionals worldwide.

5. Amazon Prime Day patterns are shifting in favor of CPG

In addition to using Prime Day discounts to shop pricier categories like consumer electronics and appliances, consumers have begun to use the shopping event to stock up on more CPG products, including household essentials, grocery, and pet care items, per Numerator data.

As Amazon’s second Prime Day approaches, CPG companies should make sure their strategies are tailored to these behaviors and use deals to drive spending across Prime Day and similar retailer sales events.

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