The Amazonification Of CPGs

If you manage a large brand in a low involvement category the stakes have never been higher. Many brands are still latching onto big retailers to help them hit their quarterly numbers, but to me this is no different than Blockbuster enjoying its steady DVD rental business in the early 2000s

  • Consumers will continue to shift their purchases of CPGs to Amazon

  • Once powerful CPG brands can no longer rely on their powerful big box distribution to drive volume

  • Private label pressure is mounting both from Amazon (through Amazon basics) and big box private label (Walmart’s Great Value brand.

Here are a few new paths I’d be looking to pursue:

  • Create or buy on-demand services for consumers to collect first party data and direct sales channels (Wag, Glam Squad, Handy)

  • Create multi-category subscription services bundled with content to differentiate

  • Buy or build in-home hardware (Washing Machines, Vacuum Cleaners, Dishwashers) to use as a loss leaders to drive intravenous selling through proprietary smart home integrations

This is all new territory for an industry that has largely stayed constant since the days of the Ed Sullivan show in the 60s, but this is what true innovation means.