Can Wholesale Consumer Brands Successfully Pivot to D2C?
With the rise of consumer platforms, brands no longer need to solely rely on their distributors to stay in business (and they shouldn’t).
Today, channels like Facebook, Google Shopping, Pinterest, and of course Amazon – offer traditional wholesale brands an opportunity to expand into the world of selling direct to consumer.
According to a recent survey, 59% of respondents preferred to do research directly on brand sites and 55% want to buy from brands directly (vs. multi-brand retailers).
So, how do brands navigate those awkward conversations (not to mention logistic issues) with their distributors or approach CEOs and other leadership on the possibility of DTC selling?
Experts on Brands Selling Direct to Consumer
It’s a unique process for every brand, but there are ways to achieve a new equilibrium and balance of power between the brand and the distributor.
It’s a lot to process, and it definitely doesn’t happen overnight which is why we spoke with Eric Best, CEO at SoundCommerce to discuss how brands can transition from B2B to direct to consumer.
For retailers looking to accelerate GMV growth, and for brands looking to augment the wholesale channel with direct consumer engagement, SoundCommerce provides strategic guidance and validation on approach, goals, budget, infrastructure investment, and unit economic goals.
Essentially, what Sound Commerce offers is the ability to build a better direct relationship with your target end customers.
According to Best, there are thousands of (small to mid market brands in the U.S.) that have their own manufacturing facilities or conduct their manufacturing overseas.
“Most of these companies have mature business practices when it comes to the wholesale model. Unfortunately, they are typically not very digital native or data driven decision makers.”
“We talk about the importance of consumer behavior and signals from the direct channels and informing things like inventory, planning, and merchandising assortment.”
“It takes a cultural and capability shift to go from intuitively hoping you are on the right track with your product road map to using real time data to make those decisions. There’s a lot of elements involved in B2C that go far beyond just marketing.”
For a comprehensive review of the benefits of D2C selling for brands, and the most common strategic and operational challenges of the shift to D2C, take a look at Tara Johnson's complete story over at CPCStrategy.