Retailers Balk At Brands That Sell Direct To Consumers

Retailers are becoming more hesitant to work with brands that compete with them by selling direct-to-consumer, according to Shopatron in its 2013 Retailer eCommerce Study, which surveyed more than 8,000 retail executives. As many as 71% of retailers plan to stop or reduce spending with these brands, the study reported.

Further, 33% of retailers stated that they would “never” purchase products from brands that sell online directly to consumers; and another 37% said they would consider it a factor.

However, brick-and-mortar retailers  are not likely to be able to dissuade CPG companies to discontinue  selling direct to consumers — and if shoppers demand certain products, merchants are wise to offer them — so the two entities will have to come to an agreement, or mutual understanding at some point in the near future.


The Growing Role Of E-Commerce On Overall Sales

Online selling continues to grow, but still comprises a much lower percentage of total sales compared to the brick-and-mortar store. In the Shopatron study, just 18% of retailers reported that e-Commerce delivers greater than 50% of total sales. The majority (43%) reported e-Commerce at less than 5%; and 39% said e-Commerce totaled between 6% and 50%.

But many retailers are now looking at all-channel shopping statistics vs. single channel numbers, because consumers are not only influenced by one channel when making purchase decisions. In one example, e-Commerce is influencing brick-and-mortar sales when shoppers opt for in-store pickup of online orders. Therefore, most retailers (65%) said they would like their stores to be pickup locations for online orders.

In-store pickup also could be a link of cooperation between retailers and brands that are selling direct to consumers. Half of retailers said they would increase purchases from brands that send purchases to stores for in-store pickup; and an additional 9% stated they would “significantly increase” purchases from these brands.

Mobile’s Impact On In-Store Shopping

Mobile is another channel that is playing an increasingly significant role in impacting overall retail sales. Shopatron study results confirm this pattern: Most (86%) of retailers reported that at least some customers use mobile phones to help with shopping while in-store.

Broken down into specific use cases, mobile shoppers tap their smartphones to:

  • Compare prices (58%);
  • Receive product information (38%);
  • Look at product reviews (22%);
  • Review additional product options; and
  • Scan QR codes (7%).

To learn more, click here to access the complete survey findings.

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