Turning a Wholesale Business into a Direct- to-Consumer Powerhouse
Your online, direct-to-consumer business.
Have you thought about doing more with your online, direct to consumer strategies? You’re not alone.
eCommerce sales overall are growing rapidly (~20% annually worldwide), and the fastest growing segment of those totals is direct to consumer.
The challenge for wholesalers is, after spending years building and growing a business through dealer partnerships and wholesale sales – shifting the focus away from that seems cannibalistic. You rely heavily on your dealers for the survival and future of your business, but taking back control doesn’t mean taking away from your dealer business.
Just as there is a consumer audience for your products, there is also a consumer audience for those who prefer to shop online marketplaces, multi-brand retail stores, and shoppers who prefer to buy directly from the manufacturer or brand.
For many established wholesalers, direct to consumer sales may never be the ‘breadwinner’ for your business. Becoming a direct to consumer powerhouse is utilizing those strategies to explode your overall business sales, from all channels. The brands that can deliver the best experience are in a position to win.
How will my online, direct-to-consumer strategies benefit my business?
Being successful online is about engaging your customers with your brand by creating pleasant and memorable experiences. Connecting all the necessary shopping points they would be getting from an exceptional in store experience, and fulfilling those needs online with the added convenience and accessibility of eCommerce.
Building up your online store content, usability and presence provides more meaningful engagement experiences with your audience to increase your brand awareness and recognition. In contrast, wholesale businesses rely primarily on their retail sales counterparts to establish these connections which gives you little influence to guide your brands reputation and message.
Using online strategic content, resources and your conversational/customer service strategies to build relationships with your customers help foster brand ambassadors and promoters.
Site usage, customer data, sales, reviews and other data all provide valuable insight into your business and performance. Not only can you use this data to influence dealer sales, but identify opportunities to grow and expand what you’re already doing through product development, market penetration and marketing spend.
Through progression of your online presence and the development of your own analytics efforts you can position your business with more confidence to grow your bottom line.
Comparatively you may identify some significant sales and engagement trends that differ from your dealer analytics exposing an additional buyer persona and strategies to capitalize on those separately.
Controlled Customer Experiences
“If a consumer chooses your product over a competitor’s on a retailer’s website, you might have won a sale—but you’ve lost the opportunity to build a relationship”
There is so much more value and longevity in a relationship when a customer is an advocate for your brand vs one that is only an advocate for your product. If your main source of meaningful interactions with your customers is through other retailers, you lose that opportunity to connect and establish that relationship. It’s also easy to be misrepresented through the sales channels of your dealers.
When customers visit your online store, you 100% control that environment. You have the ability to influence their purchase decision and experience. A positive and impactful purchase experience leaves an impression that can turn them into repeat purchases and promoters for your brand.
If customers only shop your products through your retail partners, you don't have that opportunity.
By taking advantage of each customer engagement with your brand directly, your influence gains more reach into your target audience to expand your loyal customer base.
Providing a little independence from dealer sales is always a smart move. Many times, ill prepared brands lost out significantly from the changes and failures of their dealers and having the safeguard of your own direct to consumer revenue makes a world of difference. Don’t let the illusion of security in your dealers mislead you away from generating success independently. Higher margins aren’t too bad either.
With more sales, independence and influence comes more leverage to exploit your own branding initiatives upon wholesale and industry partners to gain even more traction for future growth and market share.
With a larger audience and system opportunities, you have the ability and resources to launch more robust and effective campaigns to reach your target audience in new, more impactful ways. Those through paid and non-paid marketing will all have more of an impact with an established customer base connected directly to your brand and those channels.
If the appeal of large, successfully innovative marketing campaigns backed by a loyal customer following doesn’t excite you, then you need a pulse check.
Your competitive strategy helps you establish yourself amongst a saturated market. Using the data and awareness you develop through your D2C efforts can improve your market share and competitive positioning. Without those strategies and resources, you’re at the mercy of your dealers.
The last competitor you want to encounter is that of a new, direct competitor that’s emerged from your retail dealers own branded product lines – the private label. Their strategies, messaging and value are most certainly going to be marketed directly to your customer and align very closely with your own. Of course, they’re going to be dedicating a heavy amount of the support they previously allocated to you to their brand instead.
The product development departments of your dealers are littered with the products of their vendors. Evaluating and replicating the products in various categories to create their own, more competitive version to go to market. Once they launch, those vendor brands take a hit, because they’re cannibalizing the market with their own products. They often use the same manufacturer, materials, and technology all offered at a more affordable price to your customer base.
There’s heavy competition in many retail product categories, and many of your dealers, especially the larger ones are going to have competing products in the same category as your own. Their own branded biases can influence your ability to grow sales and penetrate new markets. Let your branding and messaging through DTC channels influence those biases more heavily to equip your dealer’s sales channels in your favor.
Whether it’s already begun, or soon on the horizon, your current and future competitors will be investing heavily in their own online, direct-to-consumer strategies. Where you stand in that transition is crucially important. Are you going to be a leader in your industry, or are you going to be following behind?
How will my online, direct-to-consumer strategies benefit my dealers?
As stated before, while there’s a growing number of customers who prefer to shop and research products directly from the brand, there’s always going to be the customers who prefer to shop elsewhere, including those who are loyal to specific retailer stores like your dealers.
Having strategies to support each of those selling channels is important, but none are as important as those strategies that develop your own D2C business because it benefits every one of your sales channels, including marketplaces and retail dealers.
A Brand That Sells Itself
How your brand is going to generate its own demand, or continue to generate its own demand is up to you. And that benefits your dealers! Having a customer walk into their store and ask for your products specifically makes their life easy. And if they don’t carry it yet, they will, but you have to generate the buzz on your own.
Product Information Readily Available and Accessible
From my experience within online retail (from the inside), many big box retail stores used their vendors, or brands website to pull information from in order to build out product and brand specific pages and promotions. If you make it difficult for them to find or obtain that information, you’re likely to have either off-brand, inaccurate, or incomplete promotional content.
By making sure your online store and product pages are the full source of truth for product information and shopping resources for your brand, you eliminate those opportunities for failure.
The accessibility of information on the web is HUGE. Use it to your advantage. The research depicting how much time consumers are spending researching products online before they buy is hard to ignore. But it’s easy to ignore brands that don’t invest in developing and making that content easily accessible to the public. Your competitors will if they haven’t already and you don’t want to fall behind.
Those consumers who are researching products make those decisions on a number of factors including: price, appearance, popularity, features, and personal recommendations (like quality reviews).
When you comprise all of that information – which takes time, it also takes time to develop your reputation with search engines and collect enough customer reviews to make your product seem compelling. So start now.
Teaming up with your wholesale partners to run large brand or product campaigns is a great way to share the success of both your own direct to consumer reach and your dealer’s customer base. With price mapping and heavy restrictions, it’s often difficult for dealers to get creative with their promotions. However, those the campaigns organized and initiated by the brands directly, often saw much larger lifts in sales across the board, benefiting both the brands and the dealer’s bottom line.
Confident Relationships with Future Prosperity
The more shoppers are actively engaging with your brand, the more promise that shows your retail partners. If you want to grow those business relationships and give them confidence in the promotion of your products you’ll do the leg work to prove that demand. And if they don’t buy directly from you, they’re buying from them.