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Industry NewsWATCH: Amazon wants to convince CPG brands to sell direct to consumer

WATCH: Amazon wants to convince CPG brands to sell direct to consumer


Thursday, April 6, 2017 Inc. wants to convince some of the world’s biggest brands to sell their products directly to shoppers online, thus bypassing retailers such as Walmart, Target and Costco.

Executives from General Mills, Mondelez and other packaged goods makers have been invited to attend a three-day gathering in May at Amazon’s headquarters in Seattle, according to a Bloomberg report. Attendees will tour an Amazon fulfillment centre and hear a presentation from Worldwide Consumer chief Jeff Wilke.

Amazon is looking to upend relationships between brands and brick-and-mortar stores that for decades have determined how popular products are designed, packaged and shipped, Bloomberg says. If Amazon succeeds, big brands will think less about creating products that stand out in Walmart aisle. Instead, they’ll focus on designing products that can be shipped quickly to customers’ doorsteps.

“Times are changing,” Amazon says in an invitation obtained by Bloomberg. “Amazon strongly believes that supply chains designed to serve the direct-to-consumer business have the power to bring improved customer experiences and global efficiency. To achieve this requires a major shift in thinking.”

Manufacturers would have to re-imagine everything from the way products are made to how they’re packaged. Laundry detergent could come in sturdier, leak-proof containers. Instead of flimsy packages designed to pop on store shelves, cookies, crackers and cereal could be packed in durable, unadorned boxes. Plants could spit out products for individuals rather than trucks-full of inventory.

Amazon has been struggling to crack the food and packaged goods market, a  category still dominated by Walmart and other traditional chains. Persuading brands to design their packaging and operations for the online world would make it easier for Amazon to ship common household goods to urban dwellers in less than an hour. Amazon must convince brands that even though online purchases represent a small part of their sales, e-commerce is the future.

Amazon’s pitch comes as brick-and-mortar competitors try to blunt its momentum by enhancing their own online shopping options. Walmart and other big-box retailers are experimenting with things like buy-online, pickup in store. Startups like Instacart Inc. and Deliv make deliveries from stores to homes, helping retailers keep up with Amazon.


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