The Financial Times reports that Procter & Gamble has launched an online store - http://www.pgestore.com - that is designed to sell its brands directly to consumers, bypassing the traditional brick-and-mortar and virtual retailers that sell its products.
According to FT, the move is a “sign of how digital commerce is shaking up relations between retailers and their suppliers,” and is “part of the company’s drive to increase its total online sales ... P&G, the world’s largest consumer goods company, argues that the initiative represents a direct challenge for retailers, describing it as a ‘living learning lab’ that will ‘help us listen, learn and collaborate with online shoppers’.”
According to FT, the move is a “sign of how digital commerce is shaking up relations between retailers and their suppliers,” and is “part of the company’s drive to increase its total online sales ... P&G, the world’s largest consumer goods company, argues that the initiative represents a direct challenge for retailers, describing it as a ‘living learning lab’ that will ‘help us listen, learn and collaborate with online shoppers’.”
- KC's View:
-
This is a lot more than a “learning lab” or experiment. This is a broadside shot across the bow of the retail community.
You actually could see this coming from a mile away. P&G has long experimented with direct-to-consumer online sales of products like cosmetics. This is the next step in an inevitable evolution.
It may simply be that P&G is tired of paying slotting allowances, tired of sponsoring golf tournaments (which it doesn’t do much anymore), tired of helping to support companies that suddenly are in love with private label, tired of exhibiting at trade shows where it doesn’t sell much, and tired of having to bow and scrape to a retail community that it sees as being sometimes adversarial and usually self-serving.
In my mind, the question is not whether P&G will be successful in these efforts. The real question is how many other manufacturers are considering similar moves.
