Why Wholesale Brands Are Moving to Direct To ConsumerA brand that ignores this opportunity ultimately may not survive...
Jul 31, 2018
Traditional wholesale brands are in serious trouble. As more retailers shut their brick-and-mortar locations there are fewer buyers, especially on the larger scale. This has lead many wholesale brands to experience reduced sales and have excess inventory as they struggle to cope with the new normal.
The smart move, many brands are finding, is to move to direct to consumer models. This trend is very popular with startups not already in the traditional supply chain as well as more established companies who are seeking stronger or additional revenue streams.
Here, we’ll examine the advantages of Direct To Consumer as well as what is needed in order to make the transition…
One of the biggest advantages of the Direct To Consumer model is brands have complete control of the pricing, imagery, and distribution of their products. This means they now become overseers of the total shopping experience, from marketing to sales to fulfillment. Brands no longer have to worry about merchandise being deeply discounted or put in a sale bin, for example, sending the wrong message about desirability.
Additionally, various surveys have shown between 55-90% of consumers want to be able to purchase direct from their favorite brand. Modern ecommerce platforms coupled with a rise in mobile shopping confidence has made the opportunity to connect easier than ever. Visitors to a brand’s online store can still compare products and look for discounts, but all within a contained environment free of competition.
The D2C model allows brands to get to know and understand their customer base in ways that aren’t possible selling through a traditional wholesale model. Finding and nurturing the core customer is crucial; according to a report by Adobe, 40% of revenue comes from returning or repeat purchasers, who represent only 8% of all visitors.
These consumers, if satisfied with the the experience, become deeply loyal and are willing to create profiles, join mailing lists, and talk about the brand. They’ll read emails, share social media posts, and ultimately buy more things over a longer period of time.
Using an experienced marketing team, brands can carefully craft their messaging as well as get quicker and more meaningful feedback from advertising or new products. This helps companies to focus their ad spend as well as experiment with different marketing ideas to see what has the greatest impact on Direct To Consumer sales.
One of the most critical components of a Direct To Consumer strategy is customer service, an area in which wholesalers are usually unfamiliar. A customer service division could be created in-house or outsourced; however, the key is maintaining a high level of satisfaction. As social media can be a brand’s best friend, it can also be its worst enemy if things go wrong.
“Customer service is the new marketing”- Gary Vaynerchuk
Wholesale brands also have to begin developing new marketing and advertising campaigns targeted at the consumer. Social Media, of course, is a huge part of the equation; some studies show it overtaking word-of-mouth in terms of effectiveness. New brand accounts will have to be created as well as monitored and coordinated across many different platforms to present a cohesive image.
Existing wholesale brands making the switch may have to deal with retailers who aren’t so keen on the idea. However, many brands have been able to successfully combine the best of both worlds. This can done by working through traditional outlets while selling exclusive or limited-edition products through retailers and general merchandise through a brand portal, or vice versa. Examples of this trend include GE and Nike, who have expanded their Direct To Consumer efforts in recent years while still working with wholesalers.
Retail may be on life-support, however, it isn’t completely dead. A hybrid B2C/D2C plan can also benefit retail partners as many people prefer to search first online (at the brand website) but complete a purchase in-store. Wholesale brands also have a chance to open their own flagship stores to capture more sales; a survey by Astound Media found 8 out of 10 shoppers visited a brand store after doing research online.
Still, the trend for the foreseeable future is this: Move To Direct To Consumer. Any brand that ignores this opportunity ultimately may not survive.
The Avex Solution
The best way for a company to make the transition to D2C is to partner with Avex Designs, brand strategists based in New York City with a track record of success. Avex can help with design, development, and marketing, creating elegant, intuitive websites that entice visitors and reflect your brand in a positive light.
Every brand story is unique and we strive to express and support it through the online experience. We do more than just develop; we imagine, enhance, and execute websites, ecommerce platforms, apps, and more.
The first thing we will do is talk about where your brand is today and what direction you would like it to be going. We’ll look at your product offerings and target market, discussing the best way to connect them.
From there, we’ll create prototypes of the experience powered by Shopify, the leader in ecommerce development. When it is ready to launch, we will support the transition with targeted marketing campaigns that are designed to be innovative and engaging. We’ll also provide detailed analytics to help keep you on track to achieving your goals.
Recent satisfied clients include Nutrex Hawaii, O.N.S., and Enlightened. If you’re ready to have total control over your product, increasing brand awareness and customer satisfaction, contact Avex to help make the switch to D2C today.