November 13, 2017
Customer preferences are the guiding star of the logistics industry.
Recently, influenced by the ease of online communications, shoppers worldwide have begun to reconsider how they get their goods.
The traditional process of browsing merchandise in a physical store is being seen as less important.
Now, companies that have never had to seriously contemplate selling directly to consumers have an opportunity before them.
If they can set up ecommerce fulfillment channels that rival those of more established sellers, they may be able to reap significant amounts of customer dollars.
Read: Jagged Peak Expands FlexNet Fulfillment Network
That is a big "if" however - people won't buy from a company just because it sells directly. They expect a good experience.
Giving a Reason to Care
The Harvard Business Review recently tackled the evolving best practices of the fresh Direct-to-Consumer (D2C) retail sector.
One important priority for organizations interested in selling their goods straight to the audience is delivering a unique sense of value. Buying from a reseller is a long-developed habit, and people need a reason to go directly to the maker.
Developing relationships with repeat customers is one way to win them over. The idea of tracking consumers carefully and giving them rewards and offers that reflect their connection to the brand is an important retail idea today, one producer can harness to their own ends.
Selling products today means working on social media. The Harvard Business Review suggested when companies decide to enter direct retail, they can take advantage of the various popular social networks, or at least the ones that make sense for their types of products. Creating a match between channel, audience, and item is the key to setting up a fresh retail presence.
Finding a Place in the World
The news provider also explained that there is no real problem working through third-party marketplaces, provided there is a good relationship between manufacturer and merchant. Selling through Amazon, eBay or one of the other markets thriving online means sacrificing a little of the direct brand-consumer bond, but it may open up useful new channels for outreach.
The Harvard Business Review posited that becoming adept at eCommerce isn't just a kind of expansion strategy or digital land grab for brands. Consumer goods companies could increasingly rely on their own ability to move items and strike up relationships with customers if third-party retail stores, especially those on the department store model, fall on hard times.
Where the Competition Is
Existing consumer packaged goods companies entering the D2C world are likely to find themselves in competition with aggressive young startups. This, according to Forbes contributor Zia Daniell Wigder, is part of a strategy in which new arrivals attempt to disrupt markets that have grown settled and stratified over time. Wigder noted that when small companies such as Dollar Shave Club go after the giants of the razor industry, they have agility and marketing on their side.
As young companies become more common and prominent, responses from the established players are not only expected, they may be necessary to keep up. The fact that the startups are exploiting a valuable niche means there is territory to be claimed, provided companies get their logistics in order.
Interestingly, the two sides identified by Wigder have their own fulfillment issues to resolve. Neither the small organizations bursting forth nor the large companies they're hoping to claim market share from are 100 percent ready to be D2C titans by default.
The young businesses are new - they're starting from scratch and going up against giants. Armed with startup capital and ambition, they have their work cut out for them. Meanwhile, the big brands are tethered to the traditional retail relationships that have defined their industries. They'll have to change drastically to get consumer relationship management and direct delivery systems up and running. Add in the pressures of high consumer expectations and the competition becomes intense and open-ended.
Building the Infrastructure
Every company is different, which means becoming a D2C powerhouse will go a little differently for each of these brands. The common thread is the intended end result: Every consumer goods company that hopes to sell directly to its audience will need to deliver an experience that keeps shoppers coming back.
The right eCommerce fulfillment solution will play a large role in determining whether these brands succeed at their goals.
Related: Jagged Peak Expands FlexNet Fulfillment Network with New Partner LEGACY Supply Chain Services