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P&G puts 50% e-commerce jump down to ‘strength of brands’

Procter and Gamble (P&G) have welcomed a 50% jump in year-on-year e-commerce

Procter and Gamble (P&G) have welcomed a 50% jump in year-on-year e-commerce sales on the back of the ‘strength of its brands’ in a chest-beating financial filing for the third quarter.

The household goods provider and owner of the Olay and Tide brands, among many others, has seen its market share in e-commerce equal that from bricks and mortar outlets as pandemic-struck consumers stock up on cleaning supplies.

Over the period net sales hit $18.1bn, with organic revenues reaching 4%.

‘Brand strength’ drives P&G’s e-commerce bump

  • P&G was on a roll through the first three months to April 2021, as acute consumer preoccupation with cleanliness drove sales of products such as Charmin toilet paper.

  • Basking in the solid performance chief financial officer Andre Schulten attributed the rapid growth in e-commerce to the allure of its established brands, coupled with its robust logistics infrastructure.

  • Schulten said: “The strength of our brands is a big effort when you come to e-commerce. It ensures that we can be on the landing page in the search top results.”

  • While all eyes have been on e-commerce for much of the past year, P&G is not turning its back on traditional bricks and mortar retail, with chief operating officer Jon Moelle viewing the battered sector as critical to ensure its brands retain their competitive edge as lockdown restrictions ease.

  • Explaining how further innovation can reinforce P&G's market dominance, Moelle added: “We need to tailor offerings in a way that best serve e-commerce and digital commerce. An example of one of the things we’re working on is packaging, particularly for liquid products, ensuring those products survive the journey to a consumer’s home.”

Why it matters

  • P&G is engaged in a cost-cutting programme on a mission to reinvest savings in advertising as the company seeks to pour fuel on consumer fire for cleaning, health and hygiene products.

  • The household goods conglomerate has also benefitted from an e-commerce boom driven by direct-to-consumer marketing campaigns such as a partnership between soap brand Olay and Shopee to deliver a more integrated approach to e-commerce.

  • The first fruits of this relationship came in the form of a scaled-up version of ‘Show Me My Home’, an experiential microsite designed to make digital transactions appear more tangible to consumers.

  • This forms part of broader efforts to bridge the worlds of high street and online retail by lowering spending inhibitions through live interactions.

  • Research by eMarketer indicates that the pandemic may have accelerated pre-existing trends toward digital shopping by as much as five years, with retail e-commerce sales surging 27.6% worldwide to hit $4.2tn last year.

  • Advertisers have been quick to respond, redirecting their spending toward online channels as budgets migrate toward platforms such as Amazon – which accounted for 10% of the US digital market last year.

  • Ad giants such as Publicis and WPP have been leading this charge, recognising that a surging e-commerce market offers a fast-track ticket out of the present danger zone of global financial instability.

  • Looking ahead, P&G will double down on its strategy to focus on ‘superiority, productivity, constructive disruption’ in areas such as packaging, brand communication and retail execution to deliver growth.

  • Moeller concluded: “Superior offerings delivered with superior execution drive market growth. Leading category market growth and superior offerings mathematically builds market share and builds business for our retail partners. We continue to invest in and behind superior offerings.”

  • P&G‘s resurgence is founded on strong performance in critical markets such as the US and China, with chief brand officer Marc Pritchard citing the latter in particular as providing a window on the potential of 5G to drive the future of marketing.

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