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Virtual Virtues

Every day is Cyber Monday for packaged-goods brands. By Jason Katz and Angela Edwards. Sales jumped 18 percent on Cyber Monday, according to a USA Today headline this past holiday season. Clearly, online shopping has arrived and it’s here to stay. Purchasing books and electronics online is now the norm and recent trends suggest that packaged-goods categories, with compound annual growth rates at 20 percent, are the next to explode online.

E-commerce is dramatically changing the face of retailing for consumer goods. Pure-play e-tailers like Amazon have pushed beyond books and electronics and placed a strategic priority on developing their packaged-goods offerings. In doing so, they are moving beyond pushing for the occasional purchase of bigger-ticket items and gift-buying to capture stock-up and fill-in trips for household items.

Amazon has capitalized on its first-mover advantage, featuring strong consumer value-propositions to gain market share and lock-in loyalty. In many packaged-goods categories, Amazon has more than 50 percent market share of US online sales. This poses a significant threat to traditional brick-and-mortar retailers, especially for “center store” items … read >>