Amazon pushes brands to bypass retailers

Online retailer invites CPGs to tour fulfillment centre

Amazon has taken another step in its bid to disrupt the traditional grocery market.

According to Bloomberg, the online retailer has invited executives from General Mills, Mondelez and other consumer packaged goods companies to tour Amazon’s fulfilment centre to convince them to bypass retailers and sell direct to consumers.

In an invitation obtained by Bloomberg, Amazon says times are changing and it believes “supply chains designed to serve the direct-to-consumer business have the power to bring improved customer experiences and global efficiency. To achieve this requires a major shift in thinking.”

News of the three-day event, which will include a presentation from worldwide consumer CEO Jeff Wilke, who reports directly to Amazon founder Jeff Bezos, breaks the same week Amazon began testing its grocery pickup service in Seattle.

Bloomberg suggests the move is to “upend relationships” between brands and brick-and-mortar stores and to encourage CPGs to design and package products in a way that can be shipped directly to consumers. Amazon has forced manufacturers to develop packaging that's easier to open through its "Amazon Certified Frustration-Free Packaging" program. According to Amazon, frustration-free packaging means unwrapping time should take no more than 42 seconds.

Grocery has been one of the slower industries to shift business online and while retailers continues to try and find the right balance, CPGs are looking for ways to connect with online shoppers. General Mills, for instance, says it promoted “how to” cooking videos featuring its products on grocery sites. So if someone was shopping for chicken on Amazon Fresh, the company says a video for tacos recipes with its Old El Paso products might pop up in an area suggesting additional items.  

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