P&G tests if shoppers will embrace a Dollar Shave Club approach to buying Tide detergent
July 19, 2016 01:50 PM
Consumer packaged goods giant Procter & Gamble took years to push back at web-only upstart Dollar Shave Club. But now that its Gillette Shave Club has been up and running for more than a year, it is examining whether it can expand its direct-to-consumer online subscription model to other products, starting with Tide laundry detergent.
P&G is testing what it calls the Tide Wash Club, an online subscription service that ships its Tide Pods for free to shoppers. Shoppers can select the quantity and frequency that they receive the orders. Plans are oriented to shoppers who are single (P&G assumes they do about three loads a week), couples (five loads a week) and families (seven loads a week). For now, the test is limited to consumers in the Atlanta metropolitan area.
"We know that consumers are increasingly seeking new ways to purchase our products, especially online," says a P&G spokeswoman. "We expect this service will serve our consumers who don’t wish to venture out to replenish their supply of Tide Pods for their ongoing laundry needs."
The consumer packaged goods manufacturer is using the test to understand what drives consumer loyalty online, as well as to understand how it can adapt within the changing retail landscape, she says.
The move is just the latest attempt by P&G to figure out how to sell directly to consumers online, says Sucharita Mulpuru, Forrester Research Inc. vice president, principal analyst. “They have been trying to crack the digital sales model for many years now and this is another experiment within that realm,” she says. However, she doesn’t think the model will ever displace the company’s traditional retail channels.
Even so, the approach may catch on with some consumers. “There is always a small segment of the population that will try these things,” Mulpuru says. “The challenge for them is that it's not a unique product that is only available online. There isn't much friction in getting laundry detergent. With Dollar Shave Club, it was branded as a unique product and if you wanted it, you signed up for a subscription. If it was also available a la carte in a store, I don't think the subscription business would have done as well.”