The Wall Street Journal reports today that Procter & Gamble is launching an online learning lab store to feature new products.
Procter & Gamble Co. plans to launch an online store that will sell key brands, aiming to study consumer buying habits as it counters moves by traditional retailers, which have reduced the variety of brands they carry.
Amen. Procter and Gamble has a world-class product development organization capable of deep and broad innovation. BUT they hit a huge wall. Namely a big box wall. WalMart and Target’s business models do not support variety. The big box guys want to buy a limited selection of top selling mainstream items CHEAP. They won’t even take risks with P & G products, much less small and medium size businesses.
I saw this dangerous retail bottleneck when I worked at Playskool. In my two year tenure, our number of products went from about 350 to somewhere under 200. Why? Specialty toy shops were dying, and we had only four powerful customers dictating our entire product line: WalMart, KMart, Target, and Toys R Us. They aren’t in business to care about toys that support different development needs of toddlers. They don’t care that Playskool had a rich and talented product development staff capable of real innovation, and broad expert manufacturing capacity to support product variety. They just wanted big sellers.
Who won? WalMart. KMart. Target. Toys R Us. Who lost? Babies and toddlers. And Playskool employees who had to focus on the big mainstream products and drop the newer innovative products. And all of us.
I’m glad Procter & Gamble is taking matters in their own hands, in their version of “Citizen Commerce.“