Brands turn to direct selling online

Food and FMCG manufactures are increasingly looking to develop direct selling channels online to build engagement with consumers, according to a study.


More than a quarter (27%) of food and grocery manufactures are considering building branded e-commerce stores to sell products directly to consumers, according to research by grocery analysts IGD .

Companies such as GlaxoSmithKline have already launched online stores in a bid to better understand its customers’ online shopping habits and improve its marketing.

Others, such as Procter & Gamble, have turned to social networking site Facebook which offers an opportunity for brands to build a direct relationship with “fans” and sell products through the site.

The opportunities from online selling are increasing for both brand manufacturers and retailers.

In its “Building capability for a digital future” report IGD reveals that 43% of brand manufacturers expect 10% of their total revenue to come from online by 2015. Currently only 18% of manufacturers currently reach this.

Online grocery shopping is expected to double in value by 2015 accounting for 5.4% of the online grocery market with sales reaching £9.9bn. The channel was worth £4.8bn at the end of 2010 and accounted for 3.2% of total grocery spend in the UK.

While online is the fastest growing category in grocery, delivery charges and reliable delivery slots remain the biggest barriers to shoppers using online services.

Joanne Denney-Finch, chief executive, IGD, says: “The strong growth predicted for the online grocery channel presents an opportunity for companies of all sizes and types – retailers, manufacturers, local producers – to meet the needs of today’s multi-channel shopper. It is encouraging to see manufacturers looking to flex their business models, participate in the digital explosion and engage with consumers in different ways.”

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