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Why Manufacturers Need A Direct to Consumer Channel

The global pandemic has disrupted how manufacturers do business. For manufacturers, the effects are forcing a change in the day-to-day as resellers/distributors close. To survive, how can manufacturers keep customers with a D2C strategy?

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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:

  • Financial impact, including effects on results of operations, future periods and liquidity and capital resources: 71%
  • Potential global recession: 64%
  • The effects on our workforce/reduction in productivity: 41%
  • Decrease in consumer confidence reducing consumption: 40%
  • Supply chain disruptions: 23%

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 manufacturers' provide an exceptional customer experience? There are a few ways of tackling this challenge.

Amazon Business for Manufacturers

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.

Marketplace Solutions

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.

Creating a Direct-to-Consumer Channel

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:

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