Carrying name brand products used to be the way for dealers to draw customers into their stores. Not anymore. It is becoming less about the brand and more about the consumer experience offered. As consumers are spending more on experiences and less on products, retailers are figuring out how to make shopping an experience worth the trip to the store.
At a time when we hear of retail bankruptcy’s and store closures there are clear signs that physical retail is thriving. Case in point, look at Amazon acquiring Whole Foods. The battle for retail shelf space is about to get very competitive in large urban markets as the store format moves towards an advertising medium that is to be measured with cross-channel sales attribution. The retailers that have gone away are only going to make those remaining stronger. The time to partner with dealers is now as consumer experience is quickly becoming the new black. If consumers just wanted to transact they could do that in their underwear from home. Consumers want to be engaged in their purchase and use all their senses.
Direct to Consumer Costly in Long-Run
The rise of eCommerce has resulted in brands taking a direct to consumer approach to increase short-term profit margins at the expense of consumer experience and dealer loyalty. As retailers move away from brands who are aggressively selling direct to consumer and becoming their competitors, online sales for those manufacturers will suffer without offline discovery as they compete directly with Amazon online. This is opening the door for a new generation of brands, including overseas knockoffs, to get their foot in the door traditionally owned by large incumbents. Many brands still expect their dealers to stack it high and watch it fly. But the reality is, those days are over and dealers need more flexible buying programs that are on demand, as they lean towards becoming a showroom and experience center for brands.
Offline Discovery Increasing in Importance
In an online world dominated by Amazon, getting discovered offline is increasing in importance for brands and retailers alike. Retailers are recognizing they need to make shopping the experience and less transactional. Branded manufacturers know dealers are actively being used as a showroom. But most are not willing to partner in a cross-channel sales allocation program to credit dealers that fuel direct to consumer sales. Without partnering online, the offline relationship will be severed. The retailer will move onto a newer, younger, and more nimble brand that will and expose their products to new consumers they couldn’t reach otherwise. When your brand can’t be found at retail but is known to consumers it begins to lose its cachet, becomes old/tired, and ultimately deteriorates your brand equity with consumers when it isn’t visible or authentic. Who wants that?
Combining Online & Offline Channels a Winning Strategy
Today, the most valuable consumers are experience-driven and shopping across channels. They’re picking the channel that’s the most convenient and experiential, pointing to physical retail. 58% of consumers prefer shopping in stores as their ideal method. Being everywhere your consumer is ready to buy, whether online, offline, or the combination of the two is a winning strategy.
