Having graduated from “The World’s Largest Bookstore”, Amazon is looking more like the great white shark of consumer goods. Over the past five years, annual sales have grown 289% and the stock price has increased 275%. Prestige Beauty and Consumer Packaged Goods are Amazon’s next targets, and the shark has made major strides in the latter. Of the Home Care and Personal Care brands in L2’s Intelligence Report: Amazon, 97.3% officially distribute through the platform.
Ninety-two percent of CPG executives agree that e-commerce is a strategic sales channel for CPG companies, but only 43% believe they have a clear digital commerce strategy. Procter & Gamble, however, is displaying a straightforward e-commerce plan that entails working with Amazon. P&G has entered into Amazon’s Vendor Flex program, a partnership where P&G shares warehouse space with Amazon to reduce shipping and inventory costs. P&G has also optimized its brand portfolio for the Amazon search engine – their brands appear on the first page of results for 40.8% of popular industry related long-tail search terms, more than any other enterprise. The strategy seems to be paying off; close to a third of the top 50 brands officially distributing on Amazon with the most reviews on Amazon Merchant Listings are from the P&G portfolio.
Procter & Gamble’s sales performance is indicative of how the enterprise has prioritized the platform. Of the brands remaining in P&G’s portfolio after the recent divestiture – namely the top 40 brands that pull in more than $500 million in annual sales – all officially distribute on Amazon.
P&G is ahead of the curve, as evidenced by their strong search performance, high visibility and robust inventory management on Amazon. In a time of rapid innovation and shifting consumer behavior, strategies for connecting with customers and guiding them down the funnel to purchase are constantly being revamped. And Amazon is at the forefront of this conversation with P&G leading the way.
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