Across industries, diversification is what drives the bottom line. To put it plain and simple: Who would want all their eggs in one basket when competitors are waiting for the opportunity to take advantage of a momentary slip-up?
Brands are catching on to this as their resellers react to the hyper-competitive retail environment, often in ways that damage their brands. But who can blame them? They’re simply catering to what shoppers want in order to stay relevant.
Almost 90 percent of shoppers named price as one of the top factors that impacted what they choose to buy. And, much to the dismay of brands, brand is only a key factor for just 45 percent of consumers. While brands would love to be able to fully control the price at which resellers are offering their products, the consumer wants what the consumer wants. And that is often a low price. So what can brands do to take the situation into their own hands?
Boosting brand loyalty
Brand loyalty is not what it used to be, but direct to consumer selling can bring it back. Brands can take the reins of their shoppers’ experience and wow them, instead of hoping that resellers won’t make any missteps that end up turning shoppers away from their brand.
Even in the era of the Everything Store and fast and free shipping, surprisingly shoppers still want a relationship with brands. After all, they are the experts on their products. Astound Commerce found that “59 percent of respondents preferred to do research directly on brand sites and 55 percent want to buy from brands directly (vs. multi-brand retailers)”.
This is good news for brands because on a retailer site with thousands of items or more, a brand’s products will always come up next to competitors’. This forces unnecessary competition, especially when it comes to pricing.
How direct to consumer improves pricing and presentation
If a shopper is searching for a black down vest on a retailer’s site, a higher priced item that comes up might not convey superior quality and craftsmanship, but get tossed out of their consideration set before the brand can even prove why their price point is warranted. Instead, when selling direct to consumer, brands can do the leg work of getting shoppers to their site, and inch them closer to checkout with excellent product content, reviews, and even promotions from time to time.
Going head to head with competitors is best avoided, as it leads to price wars, which no brand wants to be a part of. Selling direct to consumer erases one of the many barriers to sales.
Winning the sale creates a slew of benefits beyond just keeping more of the profit from each sale. For one, unboxing is a thing. YouTube stars make a living by simply opening product boxes for the world to see. As absurd as that sounds, a reseller simply can’t customize enough to provide that level of specialization that a brand can.
A retailer will have their unique way of packaging things, and that might not always fit with a brand’s image. For example, Amazon has come under fire multiple times for having a severe mismatch between product size and the packaging it comes in. They recently vowed to improve the product-packaging match up. But imagine being an eco-friendly soap brand and having single bottles sent out in boxes that could easily fit a dozen. It will be hard for customers opening those boxes to not feel a deep sense of irony.
Improving the customer life cycle
Taking control of the presentation of products is merely the beginning. After customers take those items out of the box, the customer life cycle shouldn’t be done. For brands selling direct to consumer, capturing that customer data is invaluable in terms of being able to get reviews and remarket.
When selling through a big box retailer, a shopper who bought that black vest might get additional emails suggesting warm sweaters to go under it. But those sweaters could be from another brand and that cross-sell would automatically count the original brand out, even if the customer really enjoyed the initial product.
Don’t get me wrong, selling through distributors has its perks, but it also leaves brands without customer data, heightened competition, and limited remarketing capabilities. This goes beyond the online presence of brands as well. Opening a store, especially if it starts off as a pop-up and focuses on experiences, can also boost brand loyalty and sales. This is an opportunity to provide an immersive, full brand experience in-store that will keep shoppers coming back and encourage them to spread the word.
Final thoughts
It’s time for specialization in retail. As we’ve seen over the past few years, retailers and brands that fail to figure out what they do best and go all-in are the ones that end up in bankruptcy court. Mediocre retail is dead and being a Jack-of-all-trades in the age of Amazon is a recipe for disaster.
Brands that choose to sell direct to consumer are taking ownership of their niche and their future.
