For many years retailers have been increasing their dominance over brand owners:
- They have become masters at copying branded products, and selling them at lower prices. This has got worse with the recession
- They charge high fees to get listed, and there is the constant threat of being booted out if you don't keep "supporting" the retailer with investment
- They control in store pricing
- They own valuable data on shopper behaviour
Well, at least one company is doing something about this, rather than just getting spanked.P&G are experimenting with online retailing to sell their brands direct to the consumer.
P&G's first move is to expand theessentials.com, an online store set up by Gillette to sell spares for its electrical brands, such as Oral B and Braun. Since buying Gillette, P&G have added their other brands to the site. So now people buying spares also have a chance to buy other P&G brands. Whilst this is never going to be a huge business when the range is limited, P&G get access to interesting data on shoppers, and the chance to do targeted direct marketing and online research. And the site is run by a 3rd party, and so doesn't take up valuable management time.
Taking a share in Ocado
The second move is P&G's move to take a 1% share in fast growing UK online grocery retailer Ocado. Again, this gives them access to valuable insight on shopper behaviour, and allows them to learn more about online retailing. And for the relatively small sum of £5million, they get a share of what could one day be a valuable business.
I posted on this new brand of clothes cleaning products, aimed to cleaning without washing, by removing creases and odours. This brand also has an online store where you can buy products direct.
Time will tell if these moves are more than just P&G dipping their toe in the water. But at least they are being pro-active in exploring the area of getting more direct contact with their shoppers.