Just over a year ago, Amazon urged some of the biggest consumer package goods (CPG) companies to reconsider their direct to consumer strategies. These companies include Unilever, Procter & Gamble, General Mills, Mondelez, Reckitt Benckiser, Johnson & Johnson, Colgate-Palmolive, Nestle and L’Oréal, and a few more.
eCommerce News: Amazon encourages CPG manufacturers to shift to direct-to-customer strategy
According to a Bloomberg report, “Amazon.com Inc. has invited some of the world’s biggest brands to its Seattle headquarters in an audacious bid to persuade them that it’s time to start shipping products directly to online shoppers and bypass chains like Wal-Mart, Target and Costco.”
Clearly, in its quest to better understand consumer needs and drive sales, Procter & Gamble tapped into online stores, pop-ups and subscription programs such as the Tide Wash Club.
In fact, just last month, Procter & Gamble introduced “Tide Eco-Box”. As reported by CNN, Tide laundry detergent will soon be shipped in a shoe box, part of P & G’s push to adapt to online deliveries.
Unilever also took the challenge to sell directly to consumers by acquiring Dollar Shave Club. Known as a v-commerce brand, or vertically-integrated brand, Dollar Shave Club have built its brand through digital means. The company has been providing branded physical products via online channels.
Ultimately, this puts Unilever in a better position to offer an entirely different customer experience.
So, why did Amazon, a reseller of these very same CPG brands, encouraged manufacturers to provide direct to consumer products?
As quoted from Bloomberg’s report, “Times are changing. Amazon strongly believes that supply chains designed to serve the direct-to-consumer business have the power to bring improved customer experiences and global efficiency. To achieve this requires a major shift in thinking.”
While CPGs are just making its way through the eCommerce world, they are certainly not quiet about it. They see this new strategy as an opportunity to build new business from the ground up.
