Ecommerce has changed consumer expectations, altering the way they think and act. Retailers and online stores are no longer just a vehicle for completing a transaction for something a consumer needs. Shoppers seek a deeper relationship with the brands they buy from, especially in consumer-packaged-goods (CPG) categories like apparel and footwear, health and beauty, and food and beverage.
The online buying experience top brands have built has created a new type of shopper who seeks authentic, personal interactions with brands and often wants to join a community of like-minded buyers loyal to a certain brand. Digitally native businesses (i.e. those that started online) have led this movement and put pressure on more established brands to build a meaningful connection with their customers.
Indeed, the ability of direct-to-consumer (D2C) brands to meet customer expectations has fueled the increasing popularity and sustained success of these companies. Bringing businesses and consumers closer together is increasingly valuable in a world where consumers are more brand-focused than ever before. More than a decade after the first D2C brands appeared, CPG brands now understand why these forward-thinking brands have taken off.
They have their own eCommerce sites that generate a significant portion of their revenue. While there is ample opportunity for these D2C sites to keep thriving, many brands are looking to expand into new markets to better meet the needs of their customers via wholesale, branded pop-up stores, online marketplaces, and even social media. This is a response to loyal brand followers who seek experiences with those companies in more places.
The ubiquity of eCommerce has allowed shoppers to connect with brands in a way that was impossible before the internet. No longer are brands beholden to brick-and-mortar locations to get their products in front of potential customers. Ecommerce has created global opportunities for businesses of all sizes, and in turn, has given consumers more choices than ever before.
It’s not just about having an online presence anymore – it’s about engaging with customers on their terms, and in the places they already are. Brands that don’t adapt will be left behind as D2C companies continue to grow and expand into new markets. For many established brands, going multi-channel is the best way to remain relevant and keep up with the competition.
The key is for businesses to not only launch those channels but thoughtfully link them together in a way that improves the customer experience while staying true to the fundamental principles of the brand they’ve already built. Meeting customer expectations everywhere they purchase goods is only possible with a prudent strategy and robust tools.
Breaking into these new channels does present some risk because the company is ceding control of its brand to partners. CPG companies can give specific direction to a retail store about how their products should be displayed and can create an online store page with logos and the company’s mission.
But this is like designing one room in another person’s house rather than building a new house to one’s exact specifications from the ground up. This makes it more difficult to build personal connections with buyers, especially since the price is the most important factor for most marketplace shoppers.
A company’s product is just one listing among many similar offerings. Price is front and center—customers often filter results to show the cheapest products first, and it’s easy to get into price wars on marketplaces where many people are selling the same item. A brand will need to dedicate resources to ensuring it is portrayed as desired across these third-party channels.
Another key difference with third-party sales is businesses either cannot access or must pay for data when using resellers. For instance, if a protein bar brand sells its products on Amazon, it receives no information about those buyers. The food manufacturer doesn’t even get buyers’ emails, much less their location or other demographics, while a direct-to-consumer online store gathers all that information at no additional cost.
While CPG companies should weigh these factors, they are not a reason to ignore additional channels, especially as multi-channel becomes less of a choice and more a requirement. Pulling in revenue through these other channels will only become more important in the years to come as a multi-channel strategy continues to become the new normal.
If you want to find out how we can help your business grow by becoming multi-channel check out our latest case-study below: