Cost cutting P&G challenges retailers with direct sell website

LONDON - Procter & Gamble, owner of brands such as Gilette and Crest, is taking on its traditional retail partners by supporting the launch of theEssentials.com, a website that sells P&G brands directly to customers.

As part of a long-term cost-cutting strategy, the worlds largest advertiser invested in the website after dramatically cutting its media spend earlier this year due to rising costs of commodities.

P&G has been forced to raise the price of its products recently, as Irwin Lee managing director for P&G UK and Ireland assured retailers last week that consumers will continue to put brand value ahead of price during the credit crunch.

The move to sell its products directly to customers will put P&G in direct brand competition with its retailers, providing further evidence that e-commerce has effectively changed the traditional relationship between the two sides.

P&G's rivals L'Oreal and Estee Lauder have been selling their brands online for a number of years. The website will be operated by a third party, which owns the P&G inventory, including everything from single tubes of toothpaste, to diapers and electric razors.