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Household goods manufacturers have long sold their products to consumers through middle men, whether it be pharmacies, chains, department stores or individual resellers. But in a world increasingly connected to the internet, why not go direct to consumers?
That's an approach that Proctor & Gamble is trying with a new site that went live today. Consumers can now purchase any P&G product for a flat shipping rate of $5. But do consumers have the kind of manufacturer loyalty that will make this a popular shopping method? P&G thinks it's worth finding out.
The new site, www.pgestore.com, has been in beta with a test base of 5,000 shoppers for the last few months. P&G worked with e-commerce platform and fulfillment provider PFSweb as well as Digital agency Resource Interactive to create the site.
At least in New York, there's no tax on products available on the site. In addition, the e-store is connected to various social networks, has product ratings, shopper feedback forums and a Facebook fan page that also sells products directly.Will consumers shop P&G products directly rather than the various outlets that already exist online for such things? P&G isn't betting on that. So far, the company is using the site as an incubator to get insight into the ways consumers shop online. P&G currently gets less than 1% of sales online (about $500 million). Bob McDonald, the company's CEO, would like to see that increase ten fold. He told The Financial Times: “We want to maximize our sales through retailers but we also want to be where the consumer wants to shop.” That means the new e-store will compete with retailers like Walmart, Target, CVS and Walgreen that also sell P&G products. But the manufacturer says it is using the new site as a "living learning lab," not expressly to create sales. Which is good, considering that there's not much incentive for consumers to use it. P&G allows customers to use any coupon for its products in the new e-store, but the products are not noticeably cheaper than other outlets and unless consumers expressly purchase P&G household goods, they may not venture to shop with the site. But the trend to sell products directly online is continuing with other brands as well. Alice.com hosts stores for almost 30 marketers on its site, with all of the features that Alice has built in. From the site's about section: "The benefit of the marketplace sale is that it eliminates the retail middleman and saves lots of costs that manufacturers can pass directly on to you. And in addition to saving you money, the Alice marketplace allows participating brands to have a direct relationship with you—to reward you, personalize things for you, and work smarter for you. It is a win-win that gives you fantastic convenience, free shipping AND tangible savings."
Alice has perks that P&G has not incorporated into its store, including a subscription service that reminds customers when they're running out of products and when to reorder. If P&G is really looking to increase brand loyalty across its verticals, giving customers an easier way to purchase its products would be a good way to get started.