E-commerce forces CPG brands to think differently
Consumer packaged goods companies have always had to adapt their businesses to meet the needs of retail customers as new and growing channels of distribution (dollar stores, warehouse clubs, etc.) emerge. This is certainly the case over the past 20+ years as brands have been challenged in previously unforeseen ways by the development of digital commerce.
CPG giant Procter & Gamble is a clear case. The brand manufacturer is among the first to dip its toes into the direct-to-consumer space while also working with new customers (Amazon.com) and established ones (Walmart) on a variety of fronts. One example of this is P&G’s Tide Eco-Box, an ultra-concentrated liquid detergent contained in a cardboard box designed to be shipped to consumers’ homes. The detergent is currently listed for sale on Amazon, but not on the Target or Walmart sites.
P&G says this new lighter but sturdier option eliminates the need for bubble wrap and other precautions that distributors typically use to safeguard liquid detergent for home delivery. Because the item uses less water and plastic, it is also lighter and less expensive to ship. The packaging design also takes up less space than bottles in the back of delivery vans, meaning more SKUs can fit.
“We know that the ‘last mile’ remains the biggest challenge both economically and ecologically in eCommerce,” said Isaac Hellemn, brand manager for eCommerce innovation in P&G’s fabric care group, in a statement.
Sundar Raman, vice president of P&G’s fabric care business in North America said the Eco-Box uses “a fundamentally different approach than we’ve taken in the past and represents our relentless obsession with delighting consumers — wherever they want to purchase our brands.”
While the arguments for the Eco-Box seem straightforward, concerns have been raised about the packaging design, which has been compared to boxed wines. In recent years, P&G received criticism by consumer advocate groups and in the press when young children became ill after eating detergent in the form of Tide Pods.
- P&G Thinks Inside the Box with New Tide Eco-Box – Procter & Gamble/Business Wire
- Of course Tide knows its new detergent packaging looks like boxed wine – Vox
- Why is Amazon trying to convince CPG giants to go consumer direct – RetailWire
- Will consumers buy subscriptions for Tide from P&G? – RetailWire
DISCUSSION QUESTIONS: How do you see online commerce affecting the CPG industry over the near-term and further out? Which CPG brands do you think have been most effective to date in adapting to the changing demands of online shopping?