P&G Sets a Goal of $4 Billion in E-Commerce9 Sep, 2009 Response This Week
BATAVIA, Ohio – Procter & Gamble (P&G) is setting a goal to capitalize on its digital media investment and create $4 billion in online sales, reports AdAge.com. Though E-commerce has never reached 1 percent of the company’s overall sales, new CEO Bob McDonald is planning on using retail sites – including Amazon and Walmart.com – as well as P&G Web sites to reach the goal.
If P&G reaches $4 billion in online sales (the company totaled $79 billion in sales in 2008), that would equal more than eight times the $500 million a year P&G earns today from E-commerce.
“Some categories see as much as 30 to 50 percent of their business in E-commerce,” says Lucas Watson, global team leader of P&G’s digital business. “Our forecasts don’t suggest consumer products will ever work like that. But it’s not out of the realm of possibility E-commerce will be more than 1 percent of our sales. Getting north of 10 percent would be an aggressive goal, but somewhere in between that would be, we think, within the realm of possibility.”
Currently, out of P&G’s $12 billion in global Walmart sales, only $2 billion comes through E-commerce. Earlier this year, Nielsen projected E-commerce sales in general will grow 20 to 25 percent annually for consumer packaged goods.
P&G has increased marketing spend on digital to 4 percent of all first-quarter spending. However, Watson said P&G likely would never make direct sales a major part of its business model and looks mainly at the impact of offline sales to measure impact from digital spending.