The global pandemic has disrupted how businesses do business. For manufacturers, the effects are seen in multiple ways, forcing a change in the day-to-day and challenging the old guard norms. An April 2020 Price Waterhouse Cooper survey found:
From supply chain disruptions to customer servicing, manufacturers are also seeing resellers and distributors dropping out. Leaving manufacturers asking: how can manufacturers sell directly to consumers if they lose a core component in their selling path? Especially as consumer confidence is shaky, how can maufacturers provide an exceptional customer experience? There are a few ways of tackling this challenge.
As the pool of resellers/distributors narrows, how can manufacturers support the ones that remain? What are competitive pricing and terms that help these businesses get through the economic turmoil? What self-service tools can you implement that make contactless, remote, business as easy as possible? How can you educate and support your resellers in their eCommerce and in-store initiatives?
We’ll take a quick moment to mention the elephant in the room: Amazon Business. It is, as many have written, a double-edged sword. For manufacturers looking to sell directly to consumers, it offers a quick solution with a built-in customer base. As Brian Beck noted in 2017, manufacturers can benefit from Amazon
However, there’s an enormous risk to manufacturers relying on Amazon. Amazon is in the business of capturing the data that drives business. As they facilitate your sales, they are learning about your customers, your products, and your industry. Understand your uniqueness and how easy (or not) it would be for Amazon to make incursions into your product line. A recent report from the Wall Street Journal outlines how Amazon employees used sellers' product data to create competing products
Also know that Amazon can advertise against, delist, or bury, your products without your control. It creates a codependence over which your business has no control.
If you are nervous about a single entity’s control of a distribution channel (see Amazon Business), you can build marketplace diversity. A platform like Mirakl can let you control the experience, distribution partners, and customer and product data when implementing manufacturer D2C.
With disruptions in distribution, supply chain challenges, and new health considerations (low-contact order fulfillment), manufacturers have sped up a move to direct-to-consumer eCommerce channels.
One great use of manufacturers selling direct to consumers case is in food, where a number of brands have launched new direct-to-consumer websites:
Traditionally in manufacturing old guard has held on to the existing supply chain structures. But the global pandemic and economic fallout has required a rethinking of the way manufacturers do business.
With disruptions in distributions, now is the time to rethink how and why you manage a manufacturer D2C channel conflict. Think strategically about how you can support your resellers, your existing sales infrastructure, while building a sustainable direct-to-consumer channel. Consider pricing structures for partners, incentive programs for sales, and product mix across channels. Get alignment on serving your customer, get your channel on board, and build initiatives to keep the players motivated and engaged.
It likely won’t. In fact, hiding your pricing can make you look less trustworthy. In the age of Amazon and eCommerce, your pricing will come at no surprise to anyone doing the research. Instead, show your retail pricing upfront, and offer discounting behind a verified login. You can offered tiered pricing and volume pricing. You can build your business on brand, loyalty, and customer experience.
We bring this up for posterity. Spring 2020 has revealed new weaknesses and opportunities. Customers are now needing to shop online, whether from stay at home orders or store closures. In-store inventory is suddenly less reliable (with a drastic change of products that are now in higher demand - e.g. toilet paper, hand sanitizer, but also things like inflatable pools and fitness equipment). How can your business start meeting changing customer needs?