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How Manufacturers’ DTC Efforts Can Benefit Retailers

How Manufacturers’ DTC Efforts Can Benefit Retailers

A number of product manufacturers are seeking ways to engage more directly with end consumers: 19% of brands said that growing their direct-to-consumer channels will be a main priority to combat the loss of retail space, according to the Retail Transformation: How Brands and Retailers Have Responded to an Evolving Landscape study by NuOrder. Additionally, 75% of brands believe that physical retail sales will be less important due to retail e-Commerce.

However, the evolution of brands’ role with relation to shoppers calls for partnership, not competition. Retailers and manufacturers both can benefit from brands taking a more consumer-focused approach, according to Heath Wells, CEO of NuOrder.

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“If I’m a brand both going direct-to-consumer and doing wholesale, it’s perfect harmony,” said Wells in an interview with Retail TouchPoints. “I think brands need to be doing both. Retailers I know are somewhat worried about brands going direct-to-consumer, but they shouldn’t be worried. I see it as a symbiotic relationship where both go hand in hand and benefit each other.”

For example, brands and retailers can leverage data from both sides of the business to improve their overall understanding of how shoppers feel about their products. This shift is already under way: 46% of brands are already sharing real-time data on sales trends. Smaller retailers in particular can benefit from this kind of relationship, as they sometimes lack access to the deep analytics that larger companies can afford, according to Wells.

The partnership can extend to financial benefits as well: 54% of brands will help their retail partners by incentivizing buyers with discounts, performance rewards and other benefits. Wells suggested that manufacturers also can assist with ensuring their products are displayed to maximum effectiveness and telling a story that resonates with shoppers.

“Retailers and brands are in this together,” said Wells. “I know that brands sometimes think that once they have sold a product they can wash their hands of it, but the reality is they have to see that through. Ultimately, if the product doesn’t sell through, they’re probably not going to get a reorder.”

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