PepsiCo Goes Direct to Consumer With Launch of New Websites
Consumer packaged goods (CPG) companies have long resisted eCommerce, touting their longstanding relationships with retailers. Why focus on eCommerce when I can easily distribute my products through retailers I’ve had relationships with for decades? Then a pandemic hit. With consumers spending more online due to COVID-19 there isn’t a single CPG company that isn’t reevaluating its distribution strategy.
As the pandemic shifts more shopping online now is the time to rethink the best way to reach consumers. One CPG company that has acted quickly is PepsiCo. It is the first major CPG company to launch its own direct to consumer websites as a result of the crisis.
PepsiCo’s new direct to consumer websites which launched on Monday of this week are PantryShop.com and Snacks.com. They give consumers a way to easily buy their favourite snacks and pantry staples online. Speaking about the new initiative PepsiCo’s Senior Vice President and Head of eCommerce Gibu Thomas said: “in these uncertain times, as more and more consumers are using e-commerce channels to purchase food and beverage products, PantryShop.com and Snacks.com offer shoppers another alternative for easy and fast access to products they love.” "We very early in the crisis realized that consumers were going to need an alternate way to buy snacks, given that shopping habits are changing so quickly" said Frito Lay’s Chief Transformation Officer, Michael Lindsey.
PantryShop.com sells bundles of popular PepsiCo foods. One of the bundles offered is “Rise and Shine” and for $29.95 or $49.95 (family pack) customers get Aunt Jemima pancake mix, Tropicana juices, Quaker Chewy Granola Bars, Quaker Instant Oatmeal and other products to get your day started. Describing the bundle, PepsiCo says: “it’s said breakfast is the most important meal of the day. We couldn’t agree more! That’s why we put together this collection of family favorites, to help make mornings a little easier and get the family gathered around the table. “ There are also bundles for snacking and working out on the website.
Snacks.com as the name gives away is all about your favourite snacks. Unlike PantryShop.com snacks can be purchased a la carte. From Cheetos to Doritos to Lays chips there is something for everyone. There are over 100 snacks on the site and PepsiCo is planning to have 250 snacks on the site within a month.
PepsiCo recognizes that it still needs to focus on its traditional distribution channels as they represent the vast majority of sales but this presents the company with a new opportunity for sales as well as better customer data. “Retail is obviously our primary way in which consumers will experience our brands and purchase our brands, and we don’t expect that to change at all” Thomas said. “This is more about providing complementary solutions.”
CPG companies like PepsiCo and Coke have reams of consumer data from retailers, Nielsen as well as focus groups and studies but they don’t have the type of data Amazon has. Going direct to consumer will help PepsiCo to have a deeper understanding of consumer shopping habits and in real time. “What is different about this is we’re getting data on what people are doing versus what they say they will do” said Thomas. “People are voting with their wallet, so we know exactly what resonates.” “The quality, fidelity and speed at which we get consumer feedback is just changed by having this direct touchpoint with the consumer.”
PepsiCo created and launched these new websites within the past 30 days which provides a blueprint for the company for how to get new concepts developed and into the market at a faster pace. PepsiCo’s executives are thinking about ways to "keep that willingness to try, willingness to iterate" as well as trying to figure out "how do we keep that culture that this crisis has created, how to keep that alive and well in pockets across the organization."
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