Posted on : 2023-06-02 06:45:54
Article : Good evening, Friday Management TASK 244- Explosion of new direct-to-consumer companies are transforming how people shop. Will it disrupt the traditional distribution and market structures…?
Today, a new generation of disruptive brands shaking up retail are- direct-to-consumer e-commerce companies that build, market, sell, and ship their products themselves without middlemen. An explosion of new direct-to-consumer companies is transforming how people shop. In the process, these brands, spanning everything from detergent to sneakers, are radically changing consumer preferences and expectations. They’ve shown extraordinary resilience amid the Covid-19 pandemic. Not only have these direct-to-consumer brands survived the crisis, but many also kept growing and winning new customers.
But what sets these brands apart from traditional retailers? This allows D2C companies to sell their products at lower costs than traditional consumer brands, and to maintain end-to-end control over the making, marketing, and distribution of products. Unlike their traditional retail competitors, D2C brands can experiment with distribution models, from shipping directly to consumers, to partnerships with physical retailers, to opening pop-up shops. They don’t need to rely on traditional retail stores for exposure.
These well-positioned start-ups are competing with some of the biggest retail brands in mattresses, razors, shoes, and more by rethinking not just the product, but the entire retail model. In this space, no e-commerce company stands taller than Amazon, and every e-commerce company must factor the company into its growth strategy. These companies have figured out how to use Amazon for (partial) distribution of their products or carved out niches away from Amazon‘s marketplace.
Before the internet, the majority of retailers were limited in what they could sell by the amount of shelf space they had. That incentivized them to stock the most popular items and cut those that underperformed. Since e-commerce companies didn’t have to think about “conserving shelf space,” they wouldn’t have to make such decisions about what to stock. More importantly, they didn’t have to limit themselves to what was trendy or what sold the most. They could instead mine the “long tail” of products that didn’t normally get placed in brick-and-mortar locations. Today, the world’s dominant retailers are all online.
Hitherto major product manufacturers constantly keep their R&D active to create new products or existing product variants to sustain their market share as well as to retain their consumer loyalty towards their brands. For a successful launch of any new products or brands they keep a tab on the market research and needed marketing budgets. With COVID onset, market scenario of brick-and-mortar retailers were much effected. However, with the major awareness, and penetration of e commerce channel, product marketers are able to promote their new launches in multi-channel modes. With this development of e commerce channels of D2C and D2B, though the customer visit frequency to the retail outlets is reduced still the marketers are able to maintain their sale of existing and new products. However, with reach of last mile consumer through e commerce channels it is an opportunity for both consumer and marketers to keep the sales activity at an incremental level.
Three-fifths of people weren’t aware of any new launches in the past 12 months, but that doesn’t mean what companies created are bad. It means that it hasn’t been marketed right. To show how to avoid the deafening silence of no one noticing your product, we have picked out few of the most successful product launch examples of recent years and offered their stories in our Management Solution to the TASK 244 to be posted on our Good Morning Monday post dtd 5th June 2023.
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