A lot of the buzz around the direct-to-consumer model in ecommerce is focused on upstart digitally native retailers who’ve found a captivating product, a loyal fan base, and with tech partners, a way to sell and deliver their goods without a middle person.
But that doesn’t mean that legacy brands and manufacturers are not working to cash in on the channel that is transforming ecommerce.
Dan Neiweem is a co-founder and principal at Avionos, a cloud-focused consultancy that helps design ecommerce plans for companies, including some who decided to sell digitally only recently.
In the video interview below, we talked with Neiweem about the thinking behind going direct-to-consumer for brands and manufacturers who historically had sold through retail channels.
As Neiweem pointed out, selling directly to consumers is a great way for established brands and manufacturers to take advantage of some of the data they’d been missing out on by turning over the sales transactions to a retailer, who in turns builds a relationship with each consumer.
Direct-to-consumer isn’t simply setting up a website
But as Neiweem noted, it’s not as easy as a brand simply setting up a website and selling its wares to all comers. Doing so, of course, puts the brand in direct competition with the stores and retail ecommerce sites that are also selling the brand’s goods.
So, smart brands differentiate the products they sell on their own sites. Maybe they sell a new, untested product that retail outlets and sites would be hesitant to take on anyway — at least until they’re proven.
And what better way to prove them that to market them directly and see how they fare? With those that fare well, Neiweem says, brands can go to their retail partners and tell them, “Here’s what’s really selling and what your customers really want. And here’s the new product we’ll be launching to address that need.”
Far from being competitive, that approach allows the brand to learn about the consumers of its products while also being helpful to the retailers it works with.
Beyond that, as Neiweem mentioned in the video, brands and manufacturers can provide genuine personalization by selling directly to consumers. It’s something that retail outlets would struggle with.
In our extended interview, Neiweem used the example of a cereal maker. What they do, and what they’re good at, is making cereal, putting it in boxes, putting boxes on pallets and putting pallets in a store, he says. They will never lose that focus, he adds, it’s their bread and butter, to stick with the breakfast food theme.
Personalization and customization are the key
But selling directly to consumers, what if the cereal maker wanted to put a kid’s name (or image for that matter) on a box of cereal at that kid’s family’s request? They could do it. Once the box is shipped to a retailer, that becomes much more difficult for the retailer.
A small example, but think how personalization and customization might apply to apparel, furniture, jewelry, even appliances.
It all makes sense in a time when consumers have higher expectations and Amazon and the upstart digitally native retailers are threatening the market share of those who have come before.
In a future post, we’ll talk to Neiweem about how those often-talked-about digital natives are using direct-to-consumer strategies to make some waves of their own.
Photo by iStock
Contact Mike Cassidy at firstname.lastname@example.org; follow him on Twitter at @mikecassidy.