Sales moving online could affect marketing budgets

Procter & Gamble’s decision to sell its brands direct to US consumers online, via its e-store site, is a clear sign that the traditional business model between retailers and suppliers continues to be shaken up.

However, this latest initiative could potentially have wider – and major -implications, if it is successfully embraced by other brand-owners.
All marketing service sectors currently compete for a slice of the brand-owners’ total marketing budget based on perceived, or better still, demonstrable value added.

In this regard, the packaging design sectors have established a strong empirical link between branded packaging and the consumers’ point-of-purchase decision-making – typically, we say 80 per cent of all purchase decisions are made in-store.

If this strong link is weakened – by substantial sales occurring online, where product is king – this may well influence brand-owners’ decision-making, when they decide the branded packaging slice of their hard-pressed marketing budget.

Mano Manoharan, Joint managing director, LFH, London NW1