Procter & Gamble Maintains Focus on Millennials
By John Karolefski
Every CPG company knows that the target shoppers of the future are the Millennials who are now starting families and setting up homes. This key consumer insight is not lost on Procter & Gamble, which hopes to win the hearts and wallets of Millennials for its stable of traditional household brands such as Tide, Cascade. Swiffer, Bounty and others.
“For P&G, it’s time to forget the old ways of doing business, aimed at the lifestyles and mindsets of the baby boomers, and adapt to the next generation Millennials on which the future depends,” writes Pamela N. Danziger in the October 24, 2017 edition of Forbes.com.
The consumer products giant is apparently aiming to do just that.
“Millennials do have different needs and preferences versus their parents in some areas,” said Jon Moeller, Vice Chairman and CFO of P&G. “One example is the affiliation with Naturals products across the categories in which they shop. We continue to develop new Naturals offerings to increase the relevance of our brands and products with the Naturals consumer and the increasingly environmentally concerned shopper, whether she is a Millennial or a baby boomer,” he said in a recent presentation to analysts at the Morgan Stanley Global Consumer & Retail Conference.
He said that over the past year, thirteen of P&G’s brands were market share leaders among Millennials, including Always, Bounty, Cascade, Charmin, Crest, Dawn and Downy, Gillette, Olay, Old Spice, Swiffer, Tampax and Tide.
“Innovation builds brand relevance including for some 80 million Millennial consumers in the U.S.,” he said.
Moeller acknowledged that Millennials do a lot of their shopping online, and reported that P&G’s e-commerce sales exceeded $3 billion last year. The goal, he added, is to build e-commerce sales by an additional 30 percent to just under $4.5 billion.
In response to question from Dara Mohsenian, analyst with Morgan Stanley, Moeller said, “We generally see the online environment – and this is a generalization and certainly not an absolute statement – as being actually a limited assortment channel, not from a physical availability standpoint but from a shopper behavior standpoint. Very few shoppers go past the second or third page of a web search. And large brands who meet the performance criteria that I talked about generally fare fairly well in that environment.”
But he was clear about marketing through all retail channels. “We want to be fully relevant across channels and let the consumer decide what is the best shopping experience for them.”
P&G has been the target of criticism over the last year in the business and consumer press. Writers pushed the notion that Millennials don’t want to buy their mother’s or grandmother’s brands, implying that many of Procter’s products fall into that category.
“Research shows Millennials rebel hard against old brands,” writes Ken Fisher in the Oct. 1, 2017 edition of usatoday.com. “They crave slick, cool new micro-brand names. They shop via social media and their network of friends’ word of mouth. They want the new, not the old.”
Moeller didn’t comment on any of the criticism, and the analysts at the conference didn’t specifically ask about it. But he made the point that P&G is a “profoundly different company” that it was just a few years ago.
“As a result of portfolio transformation, significant productivity improvements, and organization and culture changes, we significantly enhanced our growth and value creation hand for the future,” he said.
Moeller stressed that “the product category” is now the one organizing principle for the company. All other operations are in service for the strategies of the 10 product categories.
“Product categories own responsibility for innovation, manufacturing and marketing,” he said. “Category leaders have ownership and accountability all the way through to the staffing levels of salespeople in the market. These category leaders have full profit and loss responsibilities, focused, agile and accountable.
“We have made a different choice, to double down on meaningful superiority, products, packaging, brand communication, retail execution and superior value in each price tier where we compete,” he continued. “We’re raising our standards of competitive advantage in each of these areas. We’re making good progress against this new higher bar, achieving this cutting edge aspirational standard across all five touch points now 40 percent of the time, up from 30 percent about a year ago.”
The article is based in part on a transcript provided by Seeking Alpha. For more information: www.seekingalpha.com.