Established consumer brands are being challenged as never before. Guy Courtin, vice president and industrial principal with Tecsys, talks about how they're striving to establish direct relationships with customers.
The challenge of traditional brands today is to craft a strategy that embraces all sales channels and ways of fulfilling orders. The old methods saw brands relying on wholesalers to receive product from the manufacturer, then execute on “the last mile,” usually in the form of delivery to a retail store. Now, says Courtin, brands are increasingly trying to ship direct to consumers, in line with the rise of the omnichannel and changing patterns of demand.
The efforts of brands today is both defensive and offensive: defensive in the sense of fending off the challenge of Amazon.com, and offensive in the desire to build closer relationships with the ultimate consumer.
In the world of e-commerce, brands also face the competitive threat of private labels. Amazon has established a pattern of selling its own versions of popular products, often under brand names that consumers don’t immediately associate with the big e-tailer. That practice actually predates the internet, however, dating back to the rise of big-box retailers and their creation of house labels that undercut the price of brand equivalents. “They don’t want to just resell someone else’s product,” says Courtin. “They want to capture all that margin.”
Brands need to take a similarly varied approach to communicating with customers — through Amazon, their own websites, physical stores and social media. “You have to have a blended strategy,” says Courtin. “Go where the customer is.”
The picture is only going to grow more complicated, as digital-native brands begin opening physical stores. Traditional brands must respond in order to stay fresh and relevant in the minds of consumers.
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