P&G to sell consumer goods on e-store
The web is posing new possibilities for multinational companies to market their products and directly sell to online consumers.
Although e-commerce is not a new idea, P&G announced this month that it would be putting an innovative concept on a trial basis. The multinational FMCG firm said it will launch a direct online store called e-store to sell consumer product categories such as beauty and grooming, health and well-being, and household care. The objective of the e-Store will be to test e-commerce concepts that unlock growth for online sales, said Proctor and Gamble.
The e-store will start with a pilot using 5,000 consumers. "Following a successful pilot, we expect the e-store will launch in the spring for US consumers. Pending a successful launch in the US, we will look to other regions however, we don't have details we can share regarding which regions or the timing", said the firm's statement.
The P&G spokesperson said: "The e-store is an example of our commitment to drive innovation to touch and improve the lives of more consumers in more parts of the world.
"P&G will work with PFSweb, an e-commerce services provider, to identify new concepts, programmes and marketing efforts to test via the e-store," he said.
Some observers analysed this move as a step to reduce costs depending less on points of sale and attracting consumers who are seeking to save on brands by eliminating the operational costs.
The FMCG have seen changes in consumers' preferences since the beginning of the global crisis mainly in terms of downsizing the portions they buy, upsizing for less money, and shifting towards less expensive brands.
P&G however said "the move tended towards testing concepts and programmes that could be reapplied with all our online retail partners in ways that grow consumer affinity for our brands and increase sales for P&G and our retail partners".
"Regarding the costs for P&G, the e-store works the same way as with our other retail partners. The retailer – in the e-store's case is PFSweb. What the e-store enables P&G to do is to test new concepts and programs that build greater consumer insight regarding FMCG e-commerce dynamics. This is important information we can share with all of our online retail partners to build online sales of our brands.
"We would expect our distributors continue to have an important role. The e-store is intended to be a learning lab for e-commerce and we view our retail partnerships as key to facilitating e-commerce success," said P&G spokesperson, adding: "We continually work to develop expertise with e-commerce consumers and shoppers, and create value for our retail partners by leveraging what we learn to benefit our businesses."
The e-store might be a beginning of a new trend say professionals in online marketing. P&G said that they would not be able to judge whether this initiative would be a trendsetter. The spokesperson said: "We can't speak of what other FMCG companies will do."
A representative of Unilever, the main competitor of P&G, said they did not have a similar plan and therefore would not be able to comment on whether it would be a future trend.
Emirates Business asked regional and local e-commerce websites whether such an initiative would be successful in the region.
Recent reports have shown a growing number of shoppers online, despite doubts regarding the security of the online payments systems in this part of the world. To overcome this challenge, cash on delivery is currently a popular option for shoppers in the Arab world, and particularly in the UAE.
Kajsa Dokakis, Managing Director, QuickDubai.com, said the e-commerce site has been approached by major skincare brands to study the possibility of starting an online store. Chocolates and sweets manufacturers are looking at the possibility.
Ronaldo Mouchwar, Chief Executive Officer of souq.com, said the question if a future trend could emerge from these initiatives, needs a further comparison between online niché e-stores and aggregators.
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