Collaboration a key component of PepsiCo's e-commerce strategy

by Keith Nunes
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Frito-Lay e-commerce, PepsiCo
E-commerce represents approximately $1 billion in annualized retail sales for PepsiCo.
 

PURCHASE, N.Y. — Mention e-commerce and retail and two names immediately come to mind – Amazon and Alibaba. Yet similar to brick-and-mortar retail, the e-commerce market features a wide variety of competitors. For consumer packaged goods companies, opportunities exist in working with many of them.

Indra Nooyi, PepsiCo
Indra Nooyi, chairman and c.e.o. of PepsiCo

“ …We have a team of roughly 200 e-commerce professionals supporting our businesses to capture growth in the rapidly emerging e-commerce channels,” said Indra Nooyi, chairman and chief executive officer of PepsiCo, Inc., during an Oct. 4 conference call to discuss the company’s third-quarter results. “It’s made up of seasoned e-commerce and tech professionals, combined with our best entrepreneurial talent from within PepsiCo.”

She added that the department is run “more like a tech company” and the company continues to fortify and enhance its full suite of capabilities to improve its performance in the e-commerce channel.

“Importantly, we’re increasingly collaborating with our retail customers to make our e-commerce capabilities yet another point of differentiation in our value-added relationships with them,” Ms. Nooyi said. “For example, using big data and predictive analytics to shape real-time marketing messages, dynamic merchandising and tailored offers. Our team is enabling us to drive greater purchase instrumentality and higher basket size for our customers on-line.”

Pepsi e-commerce, PepsiCo
PepsiCo continues to fortify and enhance its full suite of capabilities to improve its performance in the e-commerce channel.
 

The results of the company’s efforts have been fruitful. Revenues are nearing $1 billion in annualized retail sales, and e-commerce sales in the United States are projected to be up 80% this year and nearly double in China, Ms. Nooyi said.

“Our e-commerce business is on fire in China and doubling in size every year,” Ms. Nooyi said. “And it's becoming a learning lab for us to learn how to do e-commerce for the rest of the world …”

She added that the penetration of food and beverage into the e-commerce channel is accelerating.

“In many cases, our on-line share exceeds our offline share, and we are gaining on-line pretty much across the board,” Ms. Nooyi said. “While overall penetration of food and beverage remains relatively low compared to most of the categories, it is growing fast, and its development is sure to be highly dynamic. And we believe we are well positioned to win in this space.”
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