How PepsiCo Is Growing E-commerce Profitability
As part of this, PepsiCo added daypart bidding to identify when returns might be higher in different parts of the day. Jones said they’re also making significant investments in supply chain automation and net revenue management, though he didn’t provide additional details.
Based on ongoing consumer surveys, PepsiCo expects 90% of consumers will continue, at least in a hybrid way, to leverage digital channels for some of their shopping. It’s good news for the company, said Jones, because the omnichannel shopper tends to be the most valuable consumer for its retail partners.
It also presents an opportunity for both retailers and CPGs to recognize the impact these changes will have on their shared ecosystem and develop an end-to-end approach to deliver upon consumer experiences.
“I think it is an opportunity for us to sort of get away from the traditional model where you would have a merchant and a CPG salesperson, and they’re really the primary point of contact, and all the other functional teams are held at an arm's length distance,” he noted.
To break down these silos, PepsiCo remains focused on bringing its technology and data teams together, as well as supply chain and store operations teams, and site merchants and e-commerce teams.
“I realize it will probably require a little more openness and trust than has existed historically in some of the relationships,” said Jones, “but I think it's necessary for all of us to get to the right solution.”
PepsiCo garnered significant headlines when it quickly stood up the Snack.com and PantryShop.com direct-to-consumer e-commerce sites during the early pandemic. While Jones acknowledged the sites remain a very small piece of businesses relative to its overall portfolio, he stressed their values stem less from driving revenue and more from building consumer relationships to leverage for data and insights.
[See also: Setting the Right Data Foundation for DTC]
“We can do test-and-learns about new product innovations. We can do things like sampling. We can even learn about how consumers act with different combinations of our products in a digital format,” he said. “Having that relationship, that ability to do the test-and-learns, we can take that back and actually help across our portfolio and help drive our broader retail business.”
With that said, the company does see a few areas of significant DTC opportunities, including its SodaStream business, the customizable Gatorade bottles and GX pods on Gatorade.com, and a Gatorade sweat-reading patch that provides personalized hydration recommendations.