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  • Writer's pictureBeerajaah Sswain

CPG, DTC, and Amazon

I think the CPG move into DTC -with Pepsi and Heinz as the most recent- is really significant. A good discussion on Linkedin sparked by a subscriber got into whether this is a pandemic tactic or a long term strategy and we will have to wait and see.

When Blockbuster closed down one brand was collateral damage - Haagen Dazs. Part of the ritual was picking up a couple of tubs every time you went to rent a movie. Then one day, that's over.

Haagen Dazs then moved into retail and now has 900 stores across 50 countries.  And a recent partnership with Secret Cinema moves them closer to DTC with fulfillment through Amazon Prime.

Big brands can learn from the agility of many small brands - and whilst many are active, experimentation should be a priority for everyone. 

This idea of CPG products being delivered directly rather than bought as part of a bigger retail store first found a scale with "Subscribe and Save" on Amazon. Today brands have to think about how to balance their Amazon strategy with their own DTC. Amazon is not making this decision easier for them. A new policy sees the economics of this service change in the UK and Germany- products are enrolled at no cost to the seller and Amazon funds a 5% customer discount. And if the brand wants to discount further, Amazon will weigh in another 5%.

Beauty is a vertical that has been hit hard - not least as Airports accounted for a huge share for many brands, and that is not coming back soon. So experimentation is critical.

Definitely interesting times ahead!

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