Why CPG Brands Should Take An Omnichannel Approach, not DTC.

Direct-to-consumer is dead for the majority of CPG categories. That’s a bold statement, but our analysis of thousands of fast-moving consumer goods companies makes it clear: a DTC digitally native model is a dead-end strategy unless you own a platform or are vertically integrated to offset your customer acquisition costs. CPG startups hoping to scale need a better approach, and that’s precisely what you will learn in this article.

Positioning, Design, Testing

A 67-point purchase intent score followed a full brand and packaging redesign for Gut Hydrations.

The new design system clarified use occasions, strengthened brand trust, and differentiated the product’s unique gut health and hydration benefits in a competitive functional wellness category.

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Why Direct To Consumer Alone Doesn’t Work

Cheap digital ads and abundant third-party data fueled the early success of CPG DTC brands. Today, both costs and privacy restrictions have changed the game. The brand impact of omnichannel tactics now surpasses that of single-channel strategies.

A strong brand’s omnichannel presence reaches consumers where they actually shop, across both digital and physical environments. Building a brand omnichannel approach ensures visibility from awareness to conversion, not just online.

Leading companies using omni-channel marketing integrate DTC, retail, and marketplace strategies to create unified brand experiences. Modern shoppers are actual consumer omnichannel buyers—researching, comparing, and purchasing across multiple touchpoints.

For consumer packaged goods fulfillment, success means synchronizing online and in-store logistics to deliver consistent, fast, and reliable experiences.

Why A Single-Channel Approach Will Not Work

Over the past two years, we’ve seen a significant increase in the cost of acquiring a customer through paid media, which may be partly due to changes in consumer data privacy, as well as the fact that many brands have adopted a direct-to-consumer approach.

Unless you hit a grand slam through viral TikTok marketing, Google ads campaign, or Liquid Death-like digital signage solutions, generating profits with a direct-to-consumer approach is a long shot for any CPG manufacturer. Like investing in index funds, the omnichannel retail approach strikes a balance between return on investment and risk. Unlike index funds, a CPG omnichannel strategy benefits from the cross-pollination of retailer and customer data.

Whether through data analysts or AI tools, CPG brands can learn through various channels. With cross-team communication in place, marketers gain valuable insights to inform their strategy.

32%

Design

Increase in purchase Intent
with millenials.

Our data-driven design process creates category-winning packaging that not only looks great, but also sells.

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Existing Retail Channels

For CPG brands, growth depends on understanding the difference between advertising CPG vs retail. One builds awareness, the other drives conversion. A defined brand omnichannel approach ensures consistency across every environment, from digital marketplaces to brick-and-mortar shelves.

Choosing the right CPG channel early allows brands to maximize visibility without overextending resources. Building a scalable channel strategy helps identify which retail partners and platforms deliver the strongest ROI. Successful brands diversify across multiple CPG channels, balancing direct sales with distributor and retail relationships.

A strong CPG commerce strategy integrates data, pricing, and merchandising to create unified consumer experiences. Streamlining operations through CPG cost take-out initiatives helps maintain profitability while expanding reach. While digital remains vital, CPG D2C should complement traditional retail for long-term category growth.

Brick N Mortar Retail

In-person shopping isn’t going anywhere. Physical stores still matter because they connect directly with your target audience and create immediate brand impact.

Success in retail depends on managing inventory efficiently while ensuring visibility across shelves and displays. For shoppers, convenience drives choice, allowing them to find what they want precisely when they want it.

Retailers are now utilizing mobile apps to integrate digital discovery with in-store purchases, resulting in a more seamless experience across various channels. This blend improves efficiency in marketing and operations.

Access to real-time data from retail partners provides powerful consumer insights, enabling brands to optimize assortment and pricing by location and item.

Most importantly, being consistently available in trusted stores builds long-term trust—something that online-only brands struggle to replicate.

Ecommerce

The most significant disruption in retail will come through ecommerce. We say this since most brands have a single-channel or multi-channel approach. Today, you have multiple options for ecommerce and can take a digital-only omnichannel strategy (we don’t suggest this).

Your ecommerce options include the following:

1. Direct to the consumer through your website
2. Specialty online retailers (Petmeds.com, Bodybuilding.com)
3. Grocery or department store online retailer (Huckberry.com, Thrivemarket.com)
4. Through Dropship platforms (Amazon.com, Wayfair.com)

Each ecommerce approach requires a specific strategy and an internal marketing campaign. Manufacturers of consumer packaged goods can no longer depend on external marketing efforts for the last three options. Instead, you must understand how to market within each channel.

Social Commerce

Whereas social commerce played nicely with each retail channel, TikTok has now set the stage for other social media platforms to become retail competitors. Here’s a look at how you can incorporate social commerce into your strategy.

1. Through social, to consumers
2. Through social, to online retailers
3. Direct to the social media company (coming soon)
4. Directly Through Influencers? (we see this happening)

Platforms are unlikely to eliminate the option of promoting outside of their channel. However, since these are for-profit companies, we expect a silent shift toward promoting the products they manage. Through increases in advertising costs and algorithm throttling, social commerce will lean towards its warehouse or dropshipped offerings.

Agentic Commerce

Agentic commerce is the next iteration of online shopping, where AI agents make purchases on behalf of consumers. Instead of users searching, AI agents anticipate and act based on preferences, data, and context. This changes how CPG brands must position and prepare their products for commercial intent searches that occur through both typed and voiced queries.

Here’s how to prepare for agentic commerce:

Optimize for structured data and metadata to ensure clean, machine-readable product information.

Highlight key value propositions, product features, and benefits for AI parsing.

Use consistent formatting to maintain uniformity across listings and channels.

Be active in developing a strong reputation across all sales channels and online review websites.

Agentic commerce will not replace ecommerce; it will integrate with it and become a part of every aspect of online shopping.

Virtual Commerce

The future of commerce is virtual. New channels will emerge in Web 3.0, where shoppers complete transactions in a virtual world. Will existing retailers or social media companies be the first to adopt this approach? We don’t know the answer to this, but there will be a race toward virtual shopping, and we’re excited to participate.

In the future, virtual commerce will allow you to sell:

1. Direct to Consumer
2. Direct to the retailer (of all kinds)
3. Direct To The Platform for Dropshipping

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Innovation

Increase in purchase preference.

increase in purchase preference through pouch modifications that solved consumer frustrations and a winning big idea to help transform Kool-Aid from a low-cost product in the KSSB space into a fun and engaging brand experience for modern households.

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How To Construct A CPG Omnichannel Team

Omnichannel retail is certainly not as simple as D2C, but with capital and strong team leadership, the sum becomes greater than its parts.

Omnichannel Marketing

Where brands could once get away with a CPG marketing director and creatives, now the team requires specialization across more channels than before. A team may now consist of a marketing director, TikTok manager, PPC manager, & print advertising manager (yes, print ads still work), and creatives.

While they previously worked in isolation, the marketing team requires consistent communication with the sales team to understand the intricacies of each commerce channel. Most marketing efforts will need to be assigned a target channel. While marketing may serve multiple channels, focusing on a primary channel leads to clear insight into how the campaign generates revenue.

Omnichannel Sales

Having a single sales director to support every channel is dangerous. For small brands, there may be no other option but to have a single person in charge of the channel’s success. Again, with proper team communication, these sales directors work together to create a synergistic revenue-generating engine, capturing market share through a joint initiative.

Omnichannel Support

A notable fact about most direct-to-consumer brands is their lackadaisical approach to customer support. Minimal contact information and the use of chatbots can lead to a poor customer experience. We can say this about any brand, but customer support will be a critical factor in the future of the CPG industry.

Customer engagement is a key driver of purchase that many consumer goods brands overlook. No longer is brand loyalty based solely on social acceptance; consumers now determine it by its social impact. We often refer to social impact on the planet and society. Still, consumers want their personal needs met, which is why personalization is a frequent topic of conversation among industry experts.

Supply Chain Management

They often go unrecognized, but a supply chain team is essential to ensure that product fulfillment goes smoothly and supports success through an omnichannel approach. You need motivated team members to source and supply vendors, ensure brands meet all deadlines, and retailers receive products in good shape. Supply chain mistakes are where most brands fail at the omnichannel approach, so don’t take this lightly.

CPG Omnichannel Retail Strategies

We’ve touched on some challenges within the omnichannel approach. Adding more channels to your brand strategy doesn’t work without a means of standing out. An omnichannel strategy demands differentiation at each point of purchase.

Sometimes this is a single change; other times, it combines differentiation factors. Here’s a look at ways to provide a unique marketing angle to a new channel.

Create Multiple Sizes

Reports suggest consumers are buying different sizes of consumer packaged goods. While a single SKU might have been effective across two channels, you need to consider the consumer demographics within each specific channel. How do the needs of the boutique shopper differ from those of shoppers on TikTok?

For example, TikTok currently performs well at $35.00 or below. A pet food product selling raw food for $59.99 in small shops can create a smaller pack size to create consumer demand through this channel.

Maintain A Direct Response Mindset

An omnichannel business model can sometimes be overwhelming, and it may feel like you are losing control. Within your omnichannel strategy, maintain a focus on collecting consumer data to inform your marketing efforts. CPG marketers often overlook the importance of having general information about their customers.

Besides building a relationship that warrants customer loyalty, this starting point enables audience understanding (age, gender, interests). These data sets are fundamental now that information through social media marketing is limited.

Create an Omnichannel Flow

In the game of chess, two things are essential.

1. You need to consider your next move carefully.
2. You need to see further along in the game.

Omnichannel CPG marketing begins with considering which channel is most accessible for us to execute, which gives us the most leverage, or a combination of the two. We then need to consider how moving into this CPG retailer impacts the next retailer, which in turn affects the subsequent retailer.

You get the point.

Create Time-Sensitive Omnichannel Experiences

More and more companies are testing pop-up shops, limited-time in-store offerings, and digital experiences such as NFTs. It’s as if the idea of a “campaign” has gone from marketing to an actual retail presence. In this experience economy, positioning yourself as “available for purchase” for a limited time can encourage bursts of revenue growth through a more viral form of consumer purchasing.

Omnichannel Mistakes

We can reverse much of our discussion and turn those into mistakes. But let’s give you one more to consider.

Excluding Existing Relationships

Through Web 2.0, many brands shifted from traditional retailer relationships to direct-to-consumer models, which didn’t work for most. Why? Because retailers stood with the philosophy that “either you’re for us or against us.” While some of this was unavoidable, excluding retailers from your new channel promotions can be costly in the following retail phase.

While retailers understand a brand’s desire to grow, they want to feel appreciation for the relationship built. Inviting them into social commerce or offering to engage in their social commerce efforts will reinforce the existing relationship.

Packaging Design & Consumer Testing Agency

At SmashBrand, we do more than packaging design; we help brands win on shelf. From design to print, we help CPG companies create a winning look and strategy for their products. Our consumer testing guarantees that brands see an increase in purchase intent.

Book a time to discuss your project with our team.