P&G gains from digital transformation during COVID-19

Procter & Gamble (P&G) has reported 5 percent increase in sales to $17.2 billion during the January – March quarter of fiscal year 2020.
P&G digital transformationP&G said its e-commerce business grew about 35 percent in the quarter. Its e-commerce business is about 10 percent of total business.

P&G said the two largest sources of growth in e-commerce business by far are the U.S. and China with some categories growing in e-commerce in those two markets, as much as 50 percent.

P&G has experienced an surge in e-commerce across the globe with the growth rate of the channel doubling in many countries during COVID-19 epidemics.

“Consumers are getting necessities delivered to their door in many cases with contactless delivery. Revenue growth management plays a key role in our current strategy as we shift towards package sizes that are fit for purpose online sales and as we reallocate consumer and trade promotions to digital,” Jon Moeller, vice chairman, COO and CFO of P&G. said during the analyst call.

P&G has increased in-app visibility with a focus on multi packs for grocery e-delivery companies.

“We are investing in digital capabilities to strengthen consumer connections and piloting several different digital-enabled initiatives using fulfillment methods, whether B2B to home or B2C platforms in many countries to capture online demand for at-home consumption in the future,” Jon Moeller said.

P&G’s global e-commerce organic sales grew 25 percent in 2019, accounting for about 8 percent of total sales.

Sales to Walmart and its affiliates represent approximately 15 percent of P&G’s total sales in 2019 and 2018 and 16 percent in 2017. No other customer represents more than 10 percent of total sales, says P&G.

P&G in its 2019 annual report said that it’s now just past the midpoint of second five-year productivity program and remain on track to deliver up to another $10 billion in savings. P&G said it is creating a synchronized network based on real-time demand signals to serve the evolving needs of consumers and customers.

P&G said it aims to create savings through areas such as more cost-effective multi-category manufacturing sites in geographically strategic locations as well as automating and digitizing these sites to minimize cost and maximize flexibility.

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