If ever there were a time to put your direct-to-consumer (D2C) strategy on the fast track, this would be it. Shops are closing, traditional retail roles are changing and consumer preferences are evolving.
These shifts aren’t just trickling in a little at a time. They’re occurring at a remarkably quick pace, fuelling major changes across the entire retail landscape. And one of the biggest transitions we’re seeing right now is the need for more manufacturers to expand their D2C efforts.
You already know that selling direct to consumers can open the doors to a wide range of benefits, and it may be something your manufacturing company has been considering. However, if you’ve been sitting on the fence, it’s important to know that the stakes are now higher than ever.
Here’s a quick look at three key trends to help inform your strategy.
1. Legacy wholesale retail channels are struggling
Shortly after the number of empty shops, pubs and restaurants soared by more than 4,400 in 2018, a new report suggests as many as 10,000 more brick-and-mortar stores in the UK will close by year’s end.
Citing a “culture of discounting” and consumer tendencies to price check online, industry analysts say there’s “no doubt” big-name retailers will continue to struggle. As long-standing high street stalwarts face unprecedented challenges, the nature of many traditional wholesale relationships are being questioned — and potentially put at risk.
Any steps you can take to diversify your marketing and selling mix now will help safeguard your product brands against future closures.
2. Traditional roles are changing
It’s not just the changes occurring on high street that will impact branding manufacturers. Some significant transitions are happening in online retail, too.
As consumer expectations fuel major changes not seen in decades, the line separating retailers and manufacturers is fading fast. Perhaps one of the biggest implications is the burgeoning array of private-label products — including many that are displacing long-entrenched brands.
For example, Amazon alone now sells more than 450 of its own exclusive brands worldwide.
As consumers become accustomed to this growing array of competitive options, their loyalties are easily swayed by price and convenience. To maintain market share, manufacturers will need to find new and creative ways to convey the value of their products, and to make purchases about more than price alone.
The only way to achieve this is by speaking directly to consumers.
3. Consumer preferences are wildly different from years past
If the above reasons haven’t already convinced you it’s time to accelerate your direct-to-consumer efforts, here’s another, far more inspiring argument for adapting your model:
Your customers want to buy from you:
- 40% of consumers expect that more than 40% of their spending will go toward direct-to-consumer brands in the next five years
- More than half of consumers opt to visit brand websites (rather than retailer websites) because they offer more comprehensive information and guides
- 78% of shoppers trust manufacturers when researching products — over social media, news sites and even experts
In the midst of all this change, consumers are responding very positively to the brands that speak directly to them. They trust you more, like shopping with you better and will stay loyal to you longer. Yes, it may be challenging to change your model after spending so many years focusing on traditional wholesale. But the sooner you can make the move, the better it will be for both your company and your customers.
What should you do next?
With so many changes occurring in such a short span of time, waiting much longer to sell direct to consumers may soon put your brand at risk. All manufacturing brands should be working toward a diversified strategy that involves selling beyond traditional retailer relationships.
We often get the question: What’s the easiest, best way to get started? While there’s no one set standard — this process will look different for every manufacturer — we’ve seen a lot of success among companies that leverage third-party selling on e-commerce marketplaces. These platforms have a built-in audience of existing customers, and offer an array of options for marketing, selling and fulfilling.
The Manufacturer’s Guide to Marketplace Selling: Making a Successful Transition to the D2C Model
Our e-commerce experts have pulled together best practices for third-party marketplace selling in this eBook. We highly recommend it to every branded manufacturer that’s either thinking about or is in the midst of transitioning away from a wholesale-only model.GET MY FREE EBOOK