Direct to Consumer vs Retail: what’s best for my brand?
The decisions you make about how to get your product to market are vital to your success. At first glance, the benefits of DTC seem countless. Your barriers to entry are low - if you can create a website and set up a social media account well, you’re ready to start- there are millions of potential customers out there. Result! With DTC, you can get to know your customers, which is great for getting feedback and can help you adapt quickly when you need to. You can provide your customers with one-to-one attention and a level of personal customer service that perhaps, you don’t feel a large retailer with millions of customers could match.
Of course, by cutting out the intermediary, you also have control over where your product is distributed and have total ownership of your brand. As part of its “Triple Double Strategy (2X), even Nike has grand plans to concentrate its attention on DTC sales by streamlining its current network of over 30,000 retailers, focusing on just 40 of them, to double both its speed to market and its direct relationships with customers.
Beginning to sound like wholesale retailers just don’t have a place in your strategy for getting to market, particularly when the media continually predicts the ‘retail apocalypse’?
It might not be that simple. It’s worth noting that despite the reduction in its distribution partners, 70% of Nike’s 2018 sales still came through retail stores. In the UK, there are many examples of retailers such as Selfridge’s, JD Sports and Zara going from strength-to-strength. In the States, Costco, TJ Maxx and Target continue to perform. Why? These are brands that have been proactive in evolving and as consumers’ appetite for a top-notch customer experience grows, these retailers have adapted to meet customer needs through experiential shopping, knowing their consumers and the price points they expect and providing the stock that customers want. There’s still no getting away from the fact that some customers enjoy the instant gratification of leaving a store with their purchase in-hand.
A multi-brand retailer potentially has a huge amount to offer, when you’re trying to get your product to market. Without huge outside investment and substantial marketing budgets, it can be challenging (or sometimes impossible) for small businesses to achieve the reach necessary to be successful. When Facebook algorithms make life difficult and Google Ads just aren’t cutting it for you, imagine having your product on the shelves of a trusted retailer, where millions of customers will be able to access it? Often a retailer can offer you a broad customer base, a wealth of experience, an exciting in-store customer experience and importantly, scale and reach. There’s comfort in knowing that the retailer is absorbing some of the risk and cost of being customer facing.
So, the solution is probably is a bit like a Nike cross-training shoe, designed to help you do a bit of everything. Combine building your brand, adaptability and direct customer relationships through DTC, with productive partnerships with trusted, experienced retailers and you might just find yourself sprinting towards success.
Alternatively, learn more about how Product Guru allows you to put your products in front of retail buyers for free and join our growing community of suppliers!
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