As the digital shopping experience improves, manufacturers are seeing an opportunity to increase their sales directly to consumers. Some manufacturers are opening retail stores while others are selling online. This marks a big shift from the days when manufacturers used to help retailers sell their products. Retailers are struggling to hold onto market share in this new ecosystem and are looking for ways to improve their marketing and customer loyalty.
In the U.S., at least half, 52%, of consumers are now shopping directly at a brand site. These shoppers say they are dealing directly with the manufacturer because of:
- Lower prices 44%
- More choices 41%
- That’s all I needed 30%
- Love of brand/loyalty 29%
- Better warranty 24%
- Good stock availability 23%
- Better service 17%
- Customization/personalization 12%
- Better experience 8%
- Other 3%
In the just-published PriceWaterhouseCoopers study, Demystifying the Online Shopper, analysts say the direct-to-consumer trend of manufacturer selling will “explode over the next 5 years”. To fight back, retailers need to get creative and advertise their unique qualities. PWC analysts say that “core strengths” of retailers might include good voucher/coupon programs and a wide range of product availability. Another strategy might be to creatively promote joint specials from 2 or more manufacturers. In addition, retailers, especially those with strong bricks and mortar channels, can hold onto market share by stocking and marketing the types of products that consumers still buy in person. These include jewelry, sports equipment and outdoor goods.
Retailers in any channel can also increase sales by promoting tactics such as fast delivery, a good return policy, and exclusive access to products. When promoting these services with “innovative marketing”, retailers have a better chance to compete with manufacturers who are aiming to change the metrics of the traditional distribution channel.[Source: Demystifying the online shopper. PWC.com. Jan. 2013. Web. 6 Mar. 2013]