Sales Are Not the Main Goal for P&G’s New Online Store

Procter & Gamble is testing a new online venue for selling its products called eStore, a venture designed to deliver lessons in online selling that P&G plans to pass on to other online retail partners.

The initiative comes as less than 1 percent of P&G’s $79 billion in global revenue last year came from online sales via sites such as Walmart.com and Amazon.com.

Thus eStore’s goal, as P&G North American vp Kirk Perry explained when announcing the venture last month, is to test concepts and programs that can be reapplied with P&G’s retail partners that “exponentially grow consumer affinity for our brands” and increase sales for P&G and its partners. Perry further described the new site as a “learning lab.”

The test run, which involves 5,000 consumers (who were invited by the company), is designed to iron out any bugs before eStore launches broadly in the U.S., most likely in late March or early April. P&G plans to expand the initiative to international markets, though the company declined to say when and where it will roll out next.

The company has outsourced the eStore initiative to Dallas-based PSFweb, which has built the site and will own and operated it. PSFweb will buy the products from P&G and then sell and distribute them via its own warehouses, PSFweb CEO Mark Layton said. In return, P&G will gain full access to reams of data about consumer buying habits that it will share with other online retailers in hopes of boosting sales.

eStore will allow P&G to monitor sales volume and how tactics such as e-coupons and cross selling impact results. Just as Amazon suggests other books consumers may like based on what they just purchased, eStore could ask a mom buying Tide, if she needs a fabric softener as well, said Tressie Long, an external relations manager at P&G in Cincinnati. P&G will also be able to see immediately if such schemes improve sales. P&G will also work with PSFweb on how to best drive traffic to the site, be it through keyword searches or tie-ins to social media sites like Facebook and Twitter, Long said.

P&G execs will be able to compare different marketing and distribution tactics quickly and efficiently, as the site allows the company to modify its approach in real time and compare results. “What they will be able to do is to have some control over the marketing, the display of products and packaging, the look and feel, and the experience of the consumer and have that change frequently, be in control of the changes and be able to drive it themselves,” Layton said. “They can learn from that information about what works, what doesn’t.”

In addition, P&G hopes to find out what shipping options consumers like most and why. The cost and logistics of delivering goods to consumers in their homes has been the biggest barrier to packaged-goods companies succeeding online, said George Lawrie, a principal analyst at Forrester Research in London. “There’s no (consumer) behavioral barrier. The only barrier is around this supply chain, cost-effective thing,” Lawrie said. “If they can fix that (by using PSFweb), they’re in good shape.”