FMCG brands go direct

The pandemic has significantly shifted consumer behaviour as sales of online groceries and other household goods increase. To keep pace with the consumer, FMCG brands are innovating new ways to mitigate the loss of in-store sales and keep consumers loyal. Supply chain disruptions and lockdowns stemming from Covid-19 are accelerating FMCG brands direct-to-consumer strategy.

DTC comes with it own set of challenges as consumer interest in buying direct from brands could die down when things return to normal, however the prediction is that DTC sales will continue to grow even after the pandemic.

The potential is huge in terms of long-term revenue growth. Pepsico generated $69 billion in sales from 23 brands and $1billion is attributed to each from direct retail sales. It will be interesting see how distributors respond.

Here are some examples of FMCG brands going DTC.

PepsiCo launch snacks.com and pantryshop.com in only 30 days and sell bundled food and beverage packages direct to consumers.

Gibu Thomas, PepsiCo’s SVP and head of e-commerce, said PepsiCo is investing in DTC “in these uncertain times, as more and more consumers are using e Commerce channels to purchase food and beverage products Watch the interview

Food giant Heinz has launched an online service called Heinz to Home

Consumer are now able to purchase product ‘bundles’ and have them delivered to their door. The move comes in response to shoppers’ frustration at not being able to easily purchase staple items in-store, as consumers stockpile their pantries during the pandemic. Read more

L'Oréal launches virtual make-up with Google

Shoppers searching Google for cosmetics will be able to try them on virtually through a deal with L'Oréal, as the French group looks to make up for lost store sales caused by coronavirus lockdowns by expanding online. Read more

Magnum, the Unilever ice-cream brand, is sending out DIY kits via Deliveroo to tap into the trend for home baking and crafts during the lockdown

Unilever has given customers the opportunity to customise their magnums (simulating the Magnum pop-up store experience), whilst supporting their Ruby range.

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Gonca Bengherbia is the founder of Vollodigital.com, a digital consultancy specialising in customer acquisition and retention. Contact info@vollogroup.com

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