General Mills creates buzz with Amazon Prime Day cereal promo
- General Mills is celebrating Amazon Prime Day — which technically spans July 16-17 — now through July 31 by giving away a free family-size box of Honey Nut Cheerios to Prime members who purchase $40 or more on Prime Pantry, according to Yahoo Finance. In addition to the box of cereal, these customers will receive $10 off their order.
- On July 16, the free cereal offer will extend to Prime members who make a qualifying purchase on Amazon Fresh and Amazon Prime Now.
- Amazon launched Prime Day in 2015 in celebration of its 20th anniversary. The promotion includes more than 100 deals for those who sign up for a Prime membership, which now costs $119.
Last year’s Prime Day was the biggest sales day in Amazon’s history, and the company added more Prime members in one day than ever before. While it didn't disclose specific figures, Amazon said "tens of millions" of Prime members bought something on Prime Day last year, up more than 50% from 2016.
That is a really big audience for General Mills to showcase the country’s top-selling cereal. According to IRI, a Chicago-based marketing and data firm, Honey Nut Cheerios generated more than $656 million for General Mills last year. The Big Food manufacturer, and other cereal companies, could certainly use a bigger, more captive audience of engaged shoppers to bring some excitement around the wilting category. According to IBISWorld, cereal sales dropped 17% from 2009 to 2016.
Additionally, General Mills, like other major CPG companies, has been hindered by higher transportation costs and has had to scramble to find cost-saving measures. Encouraging online sales through Amazon’s delivery network could perhaps alleviate some of this pain.
By putting the spotlight on Honey Nut Cheerios, General Mills also sets up its flagship cereal for new growth or, at the very least, better accessibility. The number of American households that buy their groceries online is expected to grow from 23% now to more than 70% within 10 years, according to a report from Food Marketing Institute and Nielsen. Consumers’ shopping behaviors are changing quickly and it is incumbent on CPG companies to change with them. That means putting their brands front and center online.
Amazon can benefit from this promotion as well. As the company gradually shifts to a subscription-based model for its Pantry service — from $6 per box to $5 a month — it will have to rely on some CPG favorites to draw more customers in. Amazon can also leverage these types of incentives to drive Prime members to shop at Whole Foods. According to Forbes, there are 100 million Prime members, but only 20% of them shop at Whole Foods.
There are challenges with these strategies, however. Pantry faces stiff competition from other online retailers such as Jet and Boxed (neither of which have membership fees), as well as Target as it continues to rollout same-day delivery with Shipt — which at $99 annually is cheaper than Amazon’s $119 fee.
And, as Bloomberg reported last month, Amazon’s grocery offerings are disjointed. Offering Prime deals through a variety of its channels, including Pantry and Fresh, could cause further confusion. But, as Amazon Prime's membership numbers prove, the company's customers seem to be loyal whatever the channel.
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