Accommodate Your Suppliers’ Direct Ecommerce

This week, Procter & Gamble Co., the world’s largest consumer packaged goods (CPG) supplier, announced that its ecommerce site at http://www.pgestore.com/ is open. How might you best accommodate the fact that your customers can now purchase any of more than 2,000 P&G products online and directly from the company?

• Be ready for your current suppliers to increasingly use ecommerce to scoop up consumer business directly. A press release from Alice.com says that more and more CPG companies are using the Alice.com engine to set up online stores. The threat to the retailer is greatest with habitual purchases of well-known brands. Consumers seeking convenience will be tempted to buy their Tide, Pampers, and Olay online. However, consumers seeking low prices and needing to purchase a full range of items may not be. At this point, the prices being charged by P&G don’t clearly undercut the prices at other ecommerce sites and at stores. The tips: Watch your pricing. Stay aware of what the suppliers’ ecommerce sites do to pricing on items you carry. Carry items that are not habitual purchases and work to change purchase preferences toward those items. Offer educated advice to help your ecommerce and in-store customers make the right purchases.
• In announcing the move, P&G says their major objective is to get closer to the customer. Like other manufacturers, the company has been using social networks to gather information about customer preferences. But they know the value of behavioral data and that the bulls eye target behavior is product purchase. By hooking purchase or absence of purchase to other data gathered on their ecommerce site, P&G could be faster to market with innovations profitable to retailers. The tip: Build on the insights gathered by P&G and the others by discovering why your customers buy or not.