Some 10% of consumers bought consumer packaged goods via
e-commerce last year, double the amount from 2009. Nielsen Co.
projects e-commerce will rise from around 6% of total
packaged-goods sales in 2009 to 10% by 2015 in the U.S., surpassing
club stores and matching drug-stores' share.
This rapid growth, combined with a very different mix of major
players and shopper-marketing strategies from traditional
retailing, led Ryan Cos. to launch the new unit recently, with
Reckitt Benckiser and Mars Petcare among early clients.
Last year saw the launch of several new online retailers
specializing in packaged goods, including Alice.com, Soap.com,
Petflow.com and Procter & Gamble Co.'s own PGestore.com. Then
came Amazon's $450 million acquisition of Quidsi (owner of
Diapers.com and Soap.com)* and
Walmart.com's counterattack, which saw the retailer adding
thousands of CPG items it hadn't sold online for years since a
lukewarm consumer response to the idea a decade ago.
Today, Mr. Katz believes the channel has plenty of room to grow.
Household penetration of online packaged-goods shopping is still
well below the 25% level in the U.K., for example.
As it stands, CPG e-commerce in total still pales alongside
sales in conventional stores. Walmart alone had sales of $260
billion in its U.S. division last year, more than 20 times the
sales of all CPG e-tailers combined. But e-commerce is also growing
a lot faster for Walmart and others. In a Feb. 22 earnings call,
U.S. CEO Bill Simon said the retailer's online sales outpaced the
overall 11% growth in e-commerce growth last quarter, even as
Walmart's same-store sales slid 1.8%.
"The opportunity for e-commerce in the U.S. is akin to years ago
when drugstores started selling grocery products because they
wanted to bring people in to increase frequency," said Greg
Grudzinski, director of syndicated data for Etailing Solutions.
"You're starting to see that online now with Amazon," he said,
noting that the online retail giant last month began a promotion
offering to deliver groceries free.
That idea appears to be working for drugstores, which increased
share of CPG sales by 1.1 points to 11% last year, according to
panel data from SymphonyIRI that covers all retail outlets.
Market-share gains in food accounted for the majority of that share
Mr. Katz, who said Etailing Solutions has been working with
Amazon, said packaged goods are, in a similar vein, a major piece
of its strategy to quadruple Amazon's sales to $100 billion by
increasing the breadth of offerings and frequency of visits.