The Importance of a Wholesale and Digital Balance in the Post Pandemic World.
It's no secret that Amazon has been dominating the online retail market for years. When the world was plunged into a pandemic, that dominance was reinforced, along with other marketplace and e-Commerce options. Suddenly, people are forced to stay home and shop online for fear of being infected in public places. This model accelerated the opportunity for start-up brands to engage with the consumer, where they knew they'd be.
But Amazon isn't the be-all and end-all of online retail. In fact, as we start to see a light at the end of the pandemic tunnel, brands need to consider a balanced mix of wholesale and digital when it comes to their post-pandemic go-to-market strategy.
In certain industries, Direct-to-consumer (DTC) businesses will work no matter how healthy the economy is, but in most cases, DTC-only models are short-lived in times of crisis. When people are forced to stay home, they want the convenience of shopping from their couch. Amazon and other marketplaces capitalize on this by offering free or expedited shipping. However, once the crisis is over, people return to their normal routines, and businesses solely reliant on DTC show some weaknesses.
There is no question that Amazon is very good at what they do and has forced physical retail to get better if they want to survive. Location and selection are no longer enough to capture sales. Both physical and digital retailers need to deliver an advanced consumer shopping experience.
Think about Cabela's, a hunting, fishing, and outdoor recreation retailer, that has been able to buck the trend of digital-only retailers by delivering an advanced consumer shopping experience. People enjoy being able to touch and feel the merchandise before they buy it. Through selection, merchandising and associate expertise, Cabela's offers an in-store experience that is impossible to replicate online. They have been able to parlay their brand loyalty into a successful mix of in-store and digital sales.
Now more than ever, it is important for businesses to have a balance of wholesale and digital options. Amazon will likely continue to dominate the online market, but there is still an important/vital place for brick-and-mortar stores.
It is worth repeating, the pandemic accelerated some trends that forced businesses to reevaluate how they operate, not just retailers, but big Brands as well. Short-term consumer tendencies have led many companies to make decisions that look better on paper, which has later turned out to cost valuable market share. Again, it is important to find Balance. Where do their consumer's shop and where can a brand engage with its target audience? The money will come if a brand figures out where to connect with their early adopters and brand aficionado.
As the line between physical and digital continues to blur, businesses must protect the values of their products to create harmony between the physical and digital retail space. To do this, product values in the market as a whole must be protected. It is so easy to shop different outlets to find margin crushing prices that rob your brand equity. The consumer thought has to be that the price for the products that I want are going to be the same everywhere and I have the ability to get it where I most enjoy shopping.
The effort to protect product values across the retail landscape can seem overwhelming and the enormity of this endeavor is the reason Counter Diversion was created. Some steps to follow to get started.
Understand your Sales policies. What are your enforcement steps? Are you enforcing your policies? If not, why not? If you are, are your enforcement efforts creating holistic marketplace improvement, or are there unauthorized 3P Sellers that evade your reach?
Have a Tracking Partner. Constant e-Commerce tracking is a must. The Grey Market is opportunistic, a void left by one seller will be filed by another. Through consistent tracking, analysis, and enforcement, you can be left with strong retail partners that value your brand as a part of their business model.
Make the tracking data actionable. Create a process to ingest the data you are paying for and take action beyond enforcing sales policies against know wholesalers. Schedule a time with us, we're always happy to discuss this piece of the puzzle.
For more advice on tackling the Grey Market, check out this blog post.
For an example of what success looks like, check out this blog post.
It is more important than ever for businesses to protect the values of their products to create a balance between the physical and digital retail space. To do this, companies must take measures to ensure that the prices of their products are not being undercut by unauthorized sellers. This can be a daunting task, but with the help of a tracking partner and data analysis, it can be accomplished. Protecting product values is essential to creating a harmonious marketplace and preserving brand equity.
Counter Diversion can help your business succeed in the post-pandemic world, a.k.a. the new "New Retail Landscape." We offer a variety of services to help protect the values of your products that are essential in creating a balance between the physical and digital retail space.
Counter Diversion is a boutique SaaS company - we don't have marketing and we don't use high-pressure sales tactics. Our goal is to have solid, honest conversations about the issues at hand and then either recommend our service or another one that is a better fit for your needs. If you'd like to engage in that type of discussion, please schedule a free consultation.