Procter & Gamble is working with a third-party operated website, theEssentials.com, to sell its brands directly to consumers, thereby bypassing traditional retail outlets.
TheEssentials.com, which only sells P&G products, is part of a larger movement by consumer packaged goods (CPG) brands to test direct sales to consumers. P&G rivals L'Oreal and Estee Lauder, for example, have operated websites that sell beauty brands to consumers.
While it supports the operation of theEssentials.com, P&G spokesperson Paul Fox told The Financial Times, "We treat them like any other retailer as they buy product directly from us."
P&G's direct sales test is still somewhat uncommon among CPG manufacturers but is something that companies in apparel, electronics and other categories have used with varying degrees of success.
The Financial Times piece points out that some analysts believe selling directly to consumers online can help brands address competition from private label products.
Others, including manufacturers, are mindful of the delicate relationship with retailers, particularly large chains, and are treading cautiously into an area that can be seen as directly competitive.
Discussion Questions: Do you see CPG brands looking to bypass traditional trade partners and sell directly to consumers? Will more CPG brands look for non-traditional outlets such as Amazon.com and others to reach consumers? Can the learning that CPG companies gain from direct-to-consumer online sales be used to benefit traditional retail partners?