Brand Manufacturers All In for Ecommerce

I attended the “IRCE Focus: Brands & B2B” conference in New York last week. There were many presentations that covered both B-to-B and direct-to-consumer ecommerce strategies that are being used by large brand manufacturers, such as Puma, Crocs, Stanley, Black & Decker, Vince Camuto, Steve Madden, Mizuno, Thule, Lion Brand Yarn, Juicy Couture, and more.

Here are key takeaways from that event.

Puma sells its products directly to consumers via its own ecommerce site.

Puma is one of many manufacturers that sells its products directly to consumers via its own ecommerce site.

Brand Manufacturers All In for Ecommerce

  • Any brand manufacturer that attended and was still vacillating about selling directly to consumers will likely be  planning a direct-to-consumer strategy immediately. The brands listed above all presented compelling cases on why this is a strategy for growth and higher profits.
  • B-to-B ecommerce is growing much faster than B-to-C. IRCE estimates 2014 U.S. B-to-B online revenues of between $600 billion to $1 trillion, dwarfing B-to-C estimates of $263 billion.
  • Regardless of your channel, if you are not putting mobile site development first on your list of priorities, you are well behind your competitors. Several speakers stated that mobile visits and purchases would surpass desktops within the next 12 months. IRCE research indicates that mobile is top preferred project of 38 percent of companies surveyed.
  • Ecommerce is the ticket to global markets — whether B-to-B or direct to consumer — but success requires different strategies, products, and customer experience and pricing in each market.
  • Marketplaces are key to success in many global markets, such as China.
  • Manufacturers investing in ecommerce across all channels are driving higher profits.
  • Enriching and syndicating product content is a key to success for manufacturers, but creating and maintaining content is a challenge for most. Product information management (PIM) is becoming a crucial technology investment.
  • There is a scramble to upgrade platforms and systems to support global operations. Companies with diverse platforms for different channels or markets are attempting to standardize. According to IRCE research, 50 percent of companies plan to upgrade their ecommerce platform by mid-2015.
  • Omnichannel strategies are the future for brand manufacturers. Companies that focus on a consistent customer experience regardless of the venue or channel are the ones seeing the highest growth. Putting the customer and brand first now outweigh channel considerations.
  • Companies willing to experiment are thriving. Don’t be afraid to fail, just be sure to know what success or failure is by defining your goals upfront.
  • Data is driving decision-making. It will also drive future customer experiences through better personalization and merchandising.

Brand Manufacturers Are Investing in Omnichannel

Many of the brands mentioned earlier are ecommerce leaders in their market segments. Virtually every one discussed the importance of putting the customer experience and brand first over who gets credit for the sale. They are aligning their organizations to measure overall revenue — not revenue done in physical stores, through resellers, or their own online operations.

Leading brands today encourage buyers to shop where it is most convenient. Strategies to facilitate omnichannel include online store locators to find a local store that has inventory of a particular item. More brands also offer the consumer the option to order online and pick up in convenient local store. Some also offer expedited shipping options that may be fulfilled by the closest reseller or distribution center.

Brand protection is another big reason to invest in omnichannel. Brands should be creating the rich content that supports the sales process in all channels. They are also in the best position to leverage social media to engage in conversations with their end customers.

For those manufacturers with strong channels and a high risk of channel conflict, there are still options are considering product lines that are sold directly to the end customer. This new product line does not have to compete directly with existing products. It opens up opportunities to experiment with new products, markets, and pricing.

Finally, there is the profit angle. Online sales are more profitable than channel sales. This is especially true for low-priced, commodity items.

The Millennial Factor

Millennials (consumers born in the 1980s and after) are the foundation of online growth. They are more loyal to brands than other generations, more influenced by peer input as they shop, and more likely to shop on a smartphone. Around the world, many shoppers use only a smartphone to access the Internet. Thus, mobile is even more important for global manufacturers vying for this important demographic.

Brands who do not market directly to consumers risk missing the millennial buyer. Many buyers start their shopping research on a brand manufacturer’s site. By offering a full, rich shopping experience, brands can close the deal before a consumer shops around.

Dale Traxler
Dale Traxler
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