Packaged-Goods Companies Slash Marketing Spending As Amazon Makes Sales “All About Price”

Amazon’s dominance of all things retail-related in the US is starting to effect on how packaged goods are marketed: Big Brands are starting to give up on expensive advertising campaigns because customers no longer see the value in expert branding. Now, thanks to Jeff Bezos and his algorithms, they’re fixated at finding the lowest price available.
According to MarketWatch, as Amazon and Wal-Mart make bigger pushes into the packaged-goods categories, brand names are spending less on marketing and backing away from their original models, James Cakmak, an analyst at Monness, Crespi, Hardt wrote in a Monday note. The $800 billion consumer packaged-goods category includes name-brand detergents, foods and personal care items, with large companies such as PepsiCo Inc., Johnson & JNJ and Mondelez International Inc.
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Amazon’s Prime Service, which attracted millions of customers by offering two-day shipping, comprehensive music and movie libraries, monthly deals and even discounts to customers on government assistance. According to estimates from Morningstar, nearly 79 million U. S. households now have an Amazon Prime membership, up from around 66 million at the end of last year – a number that rivals the total cable subscribers in the US.

This post was published at Zero Hedge on Jul 10, 2017.