Need to Know
- The consumer goods giant reported an overall 8% increase in revenue, with a 50% increase in online sales.
- P&G saw a 30% increase in home care products, such as cleaning products, and double-digit increases in the oral care and family care categories.
- CEO Jon Moeller thinks the cleaning and hygiene habits brought on by the COVID-19 pandemic will continue past the vaccine rollout and anticipates continued growth for the company.
Procter & Gamble has seen a significant jump in digital sales, with e-commerce rising 50% for the brand, according to an earnings call this week.
P&G reported an overall revenue increase of 8%, noting that e-commerce now accounts for more than 14% of the company’s total global sales. According to COO and CFO Jon Moeller, due to a shift in consumer spending habits brought on by the COVID-19 pandemic, combined with the company’s huge roster of personal hygiene and cleaning products—categories that have soared in popularity due to the coronavirus—e-commerce could account for 20% of overall sales in the near future.
“There may be a continued increased focus on home, more time at home, more meals at home with related consumption impacts,” Moeller said, adding that he saw a “potential for a lasting shift to e-commerce” for P&G. “Our experience to-date makes us believe we are generally well-positioned in this environment,” he continued.
Procter & Gamble increased its spending on marketing by 7% per year and has been engaging in what CEO David Taylor calls “creative disruption,” which has benefitted the company in a time when consumer spending has shifted more strongly towards trusted brand names, such as those offered by P&G, than value-oriented products, which defies consumer trends in previous years. “These strategies enabled us to build strong business momentum before the COVID crisis, accelerated our progress in calendar year 2020, and remain the right strategies to deliver balanced growth and value creation over the long term,” Taylor said.
Moeller, too, noted that there is now an “increased preference for established reputable brands that solve newly framed problems,” such as the increased need for sanitation brought on by COVID-19. P&G saw an overall increase of 30% increase in home care products, such as cleaning products, which includes the Tide and Dawn brands, and double-digit increases in the oral care and family care categories.
P&G has been increasing its e-commerce efforts since last year; in the quarter ending in March 2020, when the COVID-19 pandemic had just begun in North America, the company reported that online sales for some of its brands had already increased by 50% year over year. E-commerce sales for the company neared $5.5 billion for its fiscal year in 2019. In July 2020, as a shift in consumer habits due to the pandemic became more clear—and seemed more lasting—P&G announced that it had partnered with Google Cloud to ramp up its e-comm infrastructure, leveraging its AI and analytics tools and providing personalized, real-time experiences for buyers.