Some retail distributors may see a brand’s D2C expansion as a threat to their partnership and to their bottom line. This reaction is understandable. Concerns companies commonly have when brands go D2C include:
- Market oversaturation
- Undercutting prices or other forms of price competition
- Conflicts over physical territories
- Issues from selling to the same target audience in a particular market where both D2C and a retailer or distributor exist
However, a smart D2C strategy can actually complement existing channels and boost sales for everyone. You can help assuage retail partners’ concerns by explaining how your plan can benefit them. Here are five tactics consumer goods companies can use to avoid channel conflict when going direct to consumer.
- Test new items on your D2C website. This can quickly determine their level of popularity as well as their ideal price points. Then you can use those insights to offer distributors new best-selling items that will fly off the shelves, ensuring both you and your partners thrive.
- Use acquired customer lists. When retail partners are offering special promotions, you can drive foot traffic and sales to them.
- Increase investment in marketing. Heightened awareness of and affinity for the brand will make products become even more popular among shoppers at partner retail locations.
- Create unique or immersive experiences on the D2C channel. Your site becomes a destination for consumers who want to connect with the brand and learn more about it. Knowledge articles, tips, and how-tos can help consumers move along their customer journey. Your site can even tie into retail channels and drive sales there.
- Give your retail partners access to exclusive merchandise and let them offer discounts that are not available on your D2C channel.
It’s important to recognize and appreciate the symbiotic relationship between your D2C initiatives and your distributor network. That helps you find ways to integrate your marketing efforts and improve sales for everyone. However, some channel conflict is inevitable. Besides your own B2B and B2C channels, it can come from marketplaces and platforms such as Amazon, affiliate networks that promote your products for you, and even your social media channels.
Mitigate that risk and compensate with mutually beneficial initiatives. For example, load up wholesalers with items that have demonstrated broad consumer interest. Keep more specialized items on your D2C site. This plays to the strengths of each channel.