How to Sell and Merchandise on Virtual Stores and Ghost Retailers

The way in which we buy and sell goods is changing. 

For consumers, convenience is king. Why wait, if you can have it immediately? And why go and get it, if you can order it straight to you?

In fact, consumers are so used to conveniences that it might not be enough to just be quick anymore. Now, customers are expecting their purchases to be personalized to their needs.

How can CPG brands keep up with all these changing consumer needs? 

One way is to work with virtual stores — also known as ghost retailers.

3 dogs dressed up as ghosts, sitting in front of a Jack-O-Lantern

What are virtual stores and ghost retailers?

A virtual store exists only on the internet, with no physical shop front. They might still have their own warehouses to store the goods, but shoppers can’t visit them in person. Just like a ghost, you can see it — but you can’t touch it. 

Ever heard of a ghost kitchen? It’s the same concept but applied to takeout. You can’t eat-in at a ghost kitchen, it’s essentially a large workspace where chefs from numerous restaurants gather together and cook side-by-side. Customers can order from any of the restaurants and have it delivered all at once. 

You could (probably) have a starter from one restaurant, mains from a second, and dessert from a third. What an incredible world we live in. 

Virtual CPG stores sell all sorts of different name brands on the same “shelf”, just as they would in a supermarket. Some delivery services are so instant, you won’t need to wait 3-5 working days for your delivery. A courier will go and pick it up for you right away.

If you order something right now, you might even get it by the time you finish reading this article.

The booming industry of speedy grocery delivery

How big is the ghost retail industry?

According to Bloomberg, online food delivery will account for $75.9 billion in gross merchandise volume by 2022. Even more astonishingly, grocery delivery service Instacart achieved its 2022 sales goals by the third week of COVID lockdown. 

Over a quarter of shoppers plan to buy their groceries online more often. So if you don’t get your CPG in the game, you could be missing out. And better still, smaller food and beverage brands — working with ghost retailers and virtual stores — may have just found a way to leapfrog their mainstream rivals.

Because despite their huge market shares, bigger grocery stores are struggling to keep up with the changing tides. Due to fierce competition, major name retailers have super slim profit margins of 2-3%. This doesn’t leave much wiggle room to dominate the evolving world of eCommerce. Unfortunately, it’s not as easy as just accepting orders online. 

On the other hand, these disruptive ghost retailers are enjoying ultra-low costs. Their costs are significantly reduced by going without a physical storefront. It means fewer employees, warehouses, trucks, rent, and so on. 

Some ghost stores get by with none of those at all. 

How can CPG brands partner with ghost retailers?

As eCommerce continues to grow, new and niche online marketplaces are emerging.

There are dedicated organic, vegan, gym-friendly, or sustainable marketplaces — doing the product research on a customer’s behalf. Getting your CPG into these ghost retailers will make it so much easier for buyers to find you. 

Do your homework to explore the range of virtual potential partners for your food or beverage product. And once you’ve found your ideal fit, get your product into their hands. Each retailer might work slightly differently, but it’s likely that they’ll have their own warehouse. This way, they can ship and order as soon as it’s placed.

Normally, the virtual store will take a commission from the products sold. They may have a standard fee or commission, but it’s always worth a negotiation to get your brand the very best deal.

How can CPGs benefit from virtual stores and retailers?

We’ve said it once and we’ll say it again: convenience is king. If a customer is in need of a food or beverage product and yours is available at the click of a button, you’ll win a sale. 

It’s not just convenient for the customer, it’s also convenient for you. As soon as you’re partnered with the virtual store, you gain access to all of their customers. They need their virtual store to succeed, so they’ll pretty much be marketing your product for you. 

With convenience sorted, it allows you more time to focus on personalization. What exactly does your audience want?

This is particularly important for health-conscious consumers. They want to know what they’re putting into their bodies. They want to know what nutrition they’re getting from your products. They want their diets to be tailored to their needs.  

You can offer these shoppers all sorts of personalized products, whether it’s low in sugar, dairy-free, gluten-free, or more.

It might be worth enquiring with the virtual store to see what your customers are searching for when they purchase your products, or what other products they’re buying. Using this data could help you to improve or create new products too. 

The industry is moving towards these low-cost, virtual business models. CPG brands that ignore the change could risk being left behind.

A curly haired woman sits on the floor with her laptop

How to merchandise your brand on virtual and ghost stores

Choose partners wisely

Be picky about who you’re working with — trust is essential when you’re handing over control. The last thing you’d want is for them to send out an outdated product, old labels, or even counterfeit products. 

Set minimum advertised pricing

Let’s say you get your CPG stocked in five different ghost stores. Now, the virtual retailers may try to compete with each other by lowering the price. You don’t want to cheapen your brand, though, so set a minimum advertised price to ensure this doesn’t happen. 

Invest in informative packaging

Does your packaging communicate all your benefits? Can shoppers spot which ingredients you use and what flavor to expect? Don’t leave it up to the customer to research it for themselves. All your key product info should be easy to read in thumbnail size.

Craft engaging product descriptions

Could-be buyers have two ways to differentiate your brand from the others: the image of your packaging and the product description you use. This is an excellent opportunity to showcase your brand voice and make shoppers pay attention.

Don’t use too many words, though. People will still want to read quickly and digest the need-to-knows. 

Feeling spooked? Don’t be

Ghost and virtual retailers take some getting used to, but you don’t have to go it alone.

If you’re looking for expert help in getting your food or beverage product into the right retailers, Buffalo Market is just the team for you. We’ll get your CPG brand where it needs to be.

Drop us a line today.

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