Channel Profitability and e-commerce maturity

 In Australia

As more CPG companies fall in “love” with the idea of D2C/B2C e-commerce and digital marketing, a must read is “High growth, low profit: The e-commerce dilemma for CPG companies” article from McKinsey.
It provides a great summary on the low margins from e-commerce and additional logistics costs, while at the same time providing priority levers for margin improvement.
Although this isn’t covered in the article, the allure of D2C should not come at the cost or abandonment of existing channels, as there is a place for both the new and existing to co-exist.

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