Major FMCG companies turning to the internet

25 January 2010

NEW YORK: A growing number of major FMCG companies are attempting to make greater use of the internet to sell their products to consumers. is a consumer-facing website specialising in the consumer packaged goods category, currently offering items from a wide range of suppliers, including Procter & Gamble.

It is also in the process of developing "e-stores" for 30 companies operating in this sector, including General Mills, Johnson & Johnson, Nestlé and Sara Lee.

Brian Wiegand, one of the founders of this platform, said "I feel by the end of 2010 every packaged goods marketer will either have a store or have a plan for a store."

"Consumers buy in a basket, maybe ten things from eight or nine different manufacturers. The secret sauce for ours is that we tie the back end in a shared way across all the manufacturers," he added.

The Middleton-based portal lets brand owners retain the margin typically taken by retailers, and has instead sought to monetise its site by offering a range of marketing-related services to its partners.

It has some 2 million visitors a month, and receives between $10 (€7; £6) and $12 from a typical purchase, either through voucher reclamation, sending free trial products or via loyalty schemes.

While is gaining traction among netizens, its growth has not been based on reducing prices, as manufacturers are responsible for determining how much their goods sell for.

"If you want the absolute lowest prices, you're still going to find them at Wal-Mart. Target is generally 5% higher than Wal-Mart, and that's generally where we fall in," said Wiegand.

As previously reported, Procter & Gamble has recently developed its own online "eStore" in conjunction with PSweb, through which it is in the process of running trials with a sample panel of 5,000 people.

It has also added "where to buy" links to its brand websites, and used, which formed part of its purchase of Gillette in 2005, to bolster its presence online.

The world's biggest advertiser generates around $500 million in sales from the net at present, and its chief executive, Bob McDonald, has set ambitious growth targets for this area of its operations.

"We want it multiples of ten times bigger than that. The eventuality is a one-on-one relationship with every consumer, and obviously e-commerce needs to be a big part of that," he said.

McDonald argued it was hard to predict if web sales would replace or supplement their bricks-and-mortar equivalent, but added that "so far our experience is that a good measure of it is incremental."

"I think the point is that we want to be everywhere our consumers want to shop or gain knowledge, and in that sense we have to be ubiquitous ... and that requires a big presence in e-commerce."

Data sourced from AdAge; additional content by Warc staff