 |
The rapid emergence of challenger brands and third-party sellers in the digital marketplace has created a big hurdle for major CPG brands, according to a new report from IPG’s Agentic Systems for Commerce unit.
“The Hidden Economy Taking Share from Big Brands” looks at sales figures from Amazon’s marketplace to illustrate how the rules of brand competition are changing in the world of online retail.
The big takeaway from the study, which is based on data compiled by retail price intelligence platform Intelligence Node, is that challenger brands have pulled far ahead of legacy brands when it comes to their performance on Amazon.
Across the 18 CPG categories that were analyzed, challenger brands were in the lead for 16 of them, with margins ranging from 52 percent (challenger) vs. 49 percent (legacy brands) in the oral care category to an overwhelming 93 percent of sales nabbed by challengers in the health care category vs. just 7 percent for their legacy-brand competitors.
The only two categories where major CPG brands still held an edge were dog food & treats and cat food & treats.
What accounts for the strength of challenger brands? One big factor, according to the study, is the network of third-party sellers who rack up sales for those brands. Third-party brands follow “a model that removes nearly all the barriers that once protected major CPG brands.”
 |
The lowered barriers are reflected in the relative strength of third-party sellers and major CPG brands on Amazon. Those sales numbers come close to matching the challenger brand/major CPG brand split, with third-party brands taking a 90 percent share in health care, an 82 percent share in pet health & grooming products and a 77 percent share in makeup.
Another advantage that third-party sellers have is agility. The study notes that they can “launch products almost immediately” and offer challenger brands the ability to “test, refine and scale products at a pace traditional retail structures never allowed.
In order to catch up, major CPG brands need to work at “machine speed,” optimizing product detail pages, search ranking strategies and retail media decisions quickly.
One possible solution for major CPG brands: adopting agentic systems that can continuously sense, decide and act across all part of the digital commerce ecosystem.
“Those that remain tied to legacy operating models and fragmented technology,” the report concludes, “may find the Emergent Brand Economy extending its lead in the years ahead.”
Zeno Group releases a report showing that while communications are a bigger factor than ever in strategy, growth, risk and workforce decisions for companies, most communications leaders don’t think they are totally ready for what lies ahead.
Most people are willing to trust AI—as long as it stays in its own lane. That’s the takeaway from Mission North’s “The New Rules of Trust," a report that looks at how the public evaluates corporate reputation and at what brands need to do to maintain credibility and relevance.
Executives are moving faster, embracing flexibility and making decisions with urgency even in the face of uncertainty, a new study from Padilla finds.
The global economy is threatened by a wave of insularity that is cutting people off from the world beyond their immediate environment and making them more unlikely to listen to—or do business with—people from other countries or with opinions different from theirs, according to Edelman’s 2026 Trust Barometer.
While the danger of being on the president’s bad side is seen as a major source of concern for brands, the potential negative effects of artificial intelligence pose an even greater reputational threat, according to Global Situation Room report.
