P&G Explores F-Commerce Opportunity

Discussion
Jun 10, 2011
George Anderson

Back in October of last year, RetailWire reported on Procter & Gamble adding a "Shop Now" button in Facebook pages, allowing visitors to make a purchase using Amazon Webstore.

Now comes word that P&G is expanding the number of shopping buttons on the Facebook pages of its various brands. In a change, however, the buttons will link shoppers to the consumer packaged good giant’s own e-store. Amazon, apparently, is out of the picture.

There are plans to eventually add links to retail partner stores. Walmart, according to a report on Advertising Age’s website, is considering linking with P&G brand Facebook pages.

P&G restated that it is not looking to get into the retailing business itself.

"Social-network selling is an extension of our overall focus on innovation and brand building," Tonia Elrod, a spokesperson for P&G, told Ad Age. "We expect testing commerce via social networks like Facebook will help us accelerate e-commerce growth as consumers buy more of our categories online."

Discussion Questions: What is your reaction to P&G testing product sales through Facebook? How do you expect the company’s trading partners and competitors to react?

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11 Comments on "P&G Explores F-Commerce Opportunity"


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Paul R. Schottmiller
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Paul R. Schottmiller
9 years 10 months ago

The potential margins of selling direct are no doubt tempting for CPG companies. However, IF they are able to generate real scale with this approach, it will end up linking to retail partner(s).

David Biernbaum
Guest
9 years 10 months ago

P&G’s testing of product sales through Facebook makes so much timely sense that I can’t imagine why anyone would be critical. Facebook has become the town square. Why wouldn’t P&G sell product where millions of consumers are congregating?

Dean A. Sleeper
Guest
Dean A. Sleeper
9 years 10 months ago

Answer to #1: Duh! It’s a brave new world and keeping your head in the sand will only lead to extinction.

#2: I expect them to flail and scream for awhile and then we’ll settle into a pattern that is acceptable to all (such as the partnership approach Mr. Schottmiller suggests).

There were a few things truly disintermediated in this internet revolution…but nothing as entrenched as the CPG/retailer/consumer troika. Yes there are shifts…but the value of retailers in this equation are as old as time itself.

Check out the music industry. People thought it was over forever. Truth is it’s just forever changed. The most recent Apple announcement is a great example of the kind of thing that should have been done early in the cycle vs. spending millions on legal fights and denying the inevitable.

Kudos to P&G for doing some of the missionary work. I can’t wait to see how it works out.

Julia Staffen
Guest
Julia Staffen
9 years 10 months ago

P&G selling products on Facebook makes complete sense. When online, Facebook is where people are spending their time and females 35+ are the fastest growing segment of the Facebook user base which, in many cases, is P&G’s target audience. The potential for word of mouth marketing impact is also much greater when selling directly through Facebook. Any action completed within the Facebook online shopping site can then be instantly shared by the purchaser with their entire network creating instant, authentic top-of-mind advertising for the brand.

Cathy Hotka
Guest
9 years 10 months ago

Interesting concept, and we’ll all want to hear the results. But will people really want to order their pomegranate body wash through Facebook, presumably without a coupon, and having to pay shipping costs?

Gene Detroyer
Guest
9 years 10 months ago

If you had the ability to provide a link for consumers to immediately buy your product, why would you not?

I can sell the Tide now or risk sending the consumer to the store and lose the sale? We are in the business of selling and the internet has given us a closer link to our customer. Sell it now, not later.

Craig Sundstrom
Guest
9 years 10 months ago

My first reaction? Yawn. My second reaction: Yeah, just what people need, a multi-step process for buying laundry detergent.

I don’t mean to be unkind, and this certainly seems like a low-cost/low-risk step, so why not? But I wonder what happened to all those people who were always so busy they didn’t even have time to return a phone call…I guess the Great Recession really has idled everyone.

Roger Saunders
Guest
9 years 10 months ago

P&G is guiding their associates to understand that the “Digital Age” has arrived. Over the course of the next 5 years, it will become one of their leading strategic drivers. That will mean conducting more quantitative and qualitative market research online. It will mean making use of “new” media–like Twitter, Facebook, instant messaging, blogs, and other social networks.

These new media forms will not eliminate other media, but they will set new media allocation sets, and thus cut into “Traditional” forms’ share of budget.

Over the past two years, every 6 months,the BIGresearch Simultaneous Media Usage (SIMM) report of 24,000+ respondents has been showing 2 to 3 point jumps in Consumer response to “How Media Influences Purchase” for Internet Advertising, Text Messaging, Social Networks, Blogs, and Instant Messaging. P&G knows that the consumer is here. They are taking the right steps.

Companies that don’t accept the fact that “new” media belongs in the mix, will be left in the dust.

Max Goldberg
Guest
9 years 10 months ago

Hat’s off to P&G. They are regularly in the forefront of experimenting with new media. Most importantly, they are willing to try, test, fail and succeed. Not many CPG companies can make that claim.

Alison Chaltas
Guest
Alison Chaltas
9 years 10 months ago

No doubt P&G has discovered the power of engaging the shopper where and when she wants to shop, personalizing her brand experience, and making it easy for her to buy at a good value. In typical P&G fashion, they are methodically attacking the opportunities social media presents, and leveraging their successes. What retailer wouldn’t want to be a part of that?

Watch for the same “destination building” model across search and resource sites across digital and mobile platforms. That’s where shoppers are increasingly moving, and where brand loyalty will continue to build.

Dan Frechtling
Guest
9 years 10 months ago
There’s an interesting sub-plot behind this. P&G doesn’t need to spur e-commerce innovation in its categories. The non-perishable nature of personal care and paper goods has already spawned internet pure-play retailers like Quidsi (Diapers.com, Soap.com), which sell a lot of P&G product through a brand new channel. So why would P&G redirect traffic to itself? Amazon acquired Quidsi last Fall, and already launched a shopping experience on Facebook. By inviting Walmart.com to participate, P&G helps even out the playing field for the top two e-commerce players and balance its channel partners. P&G is also taking the opportunity to build advantages for itself. By being its own merchant, P&G: *Captures more conversion and purchase data to analyze*Gathers Facebook browsing data for retargeting purposes*Enables Facebook users to “share” their purchases, creating greater virality*Gains preferred placement on Walmart.com (it would be the first time Walmart.com has sold products entirely within Facebook)*Maintains the option to refer traffic to retailers, one-by-one E-commerce continues to add new parties to the traditional manufacturer-retailer relationship. In this case we have a third party… Read more »
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