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In a recent article, L'Oréal Chief Marketing Officer Marie Gulin-Merle attributed her company’s “digital transformation” to a focus on storytelling and personalized digital experiences, but also to the power of customer segmentation.
In 2007, when food giant Nestlé purchased Gerber for $5.5 billion, the company controlled 81% of the US baby food market. Founded in 1928, Gerber essentially created the market when Dorothy and Dan Gerber developed a process for mass producing strained peas at the family’s canning company.
But just a decade after its purchase by Nestle, Gerber’s market share has fallen to about 60%. Startup brands like Plum Organics and Ella’s Kitchen, now both owned by larger Gerber competitors, have gained market share by promoting healthy and organic offerings. What’s more, the amount of baby food sold has declined, as more and more parents prepare their own pureed foods at home, thanks to new devices that make it easier than ever to do so.
In response to these trends, Gerber decided to undertake a two-year, comprehensive brand overhaul. "It's not like launching a campaign that normally takes us three months to do,” Alberto Hernandez, Gerber’s VP of integrated communications, told Ad Age. “This is basically about changing everything we do."
Last week, Amazon launched Business Prime, giving customers of its industrial supply division access to the free two-day shipping benefit that has garnered regular (consumer) Amazon Prime more than 80 million members.
Amazon Business offers a full range of B2B supplies, from hydraulic valves to lab equipment. Launched just two years ago, the B2B e-commerce vertical has grown rapidly: It’s now available in five countries (the U.S., Germany, the UK, Japan, and India), and over the summer, it surpassed the 1 million customer milestone in the U.S.
Why are B2B shoppers flocking to Amazon Business?
On September 18, Toys“R”Us buckled under its $5 billion in debt and declared Chapter 11 bankruptcy. The company pinned particular blame on their Babies“R”Us business, which accounts for nearly 40% of sales. Specifically, the company bemoaned intense competition and “very, very aggressive pricing online.”
Indeed, Amazon, with its bottom-of-the-barrel pricing, accounts for 19.6% of online baby products sales, versus Toys“R”Us’s 5.1%, according to IBISWorld. And the problem only threatens to get worse, as the number of millennial parents increases.