So, I was asked recently to explain “where to buy” vs. “direct to consumer”…
I had an immediate knee-jerk reaction to that question, because the way I see it — when properly implemented — where to buy is actually a strategic element of a direct-to-consumer strategy.
A couple of years ago, I was working for a Fortune 100 manufacturer and tasked to expand our sales channels with a direct-to-consumer (D2C) play.
At that time, I used where to buy (or WTB) as a component of a solid multichannel sales strategy that included D2C. In our where to buy instance, our brand appeared anchored to the top of every widget on a product landing page where we were selling that product directly to consumers.
A Quick Note
Before we go any further, it might be good to explain one more thing… Depending on who you are, you may or may not know what “where-to-buy” is. Some people call it “WTB,” others call it “where to get it.” Others refer to it as “buy it now” or “buy local.” In the end, it’s a display tool that connects the consumer to a product sale through a manufacturer-retail connection and supports online, offline, and online-to-offline (O2O) sales (sometimes also called “BOPiS” or “click-and-collect”). Now, I hope that’s not left you more confused. I think it sets things straight. For the purposes of this post, I’m going to refer to this product/concept as WTB or where to buy.
Taking a Strategic Stance
The key to utilizing WTB as part of a D2C strategy is using it as a channel management and awareness tool — rather than a channel disruption tool. The key to a successful integration of D2C and a WTB implementation is a manufacturer’s willingness to proactively communicate this direct-to-consumer strategy to their existing sales channels. Manufacturers should clearly articulate to their partners that this strategy is not a competitive play, but rather an awareness play. When properly implemented and communicated, where to buy can be a very solid reinforcement to your distribution partners (retail channels) that you value them as part of your branding and sales network.
Now I’m not saying this strategy is for everyone. After all, this can look substantially different in EMEA versus the US. In the US, manufacturers are able to fall back on a minimum advertised pricing policy (MAP) as a component of a direct-to-consumer strategy. By strategically adhering to their own MAP policies, and communicating this position to their existing distribution network, they avoid the disruption of their existing channels that so often occurs when a manufacturer decides to enter the market themselves in a direct-to-consumer play (either through their website or a third-party marketplace). If a manufacturer clearly communicates that they will adhere to MAPP, they effectively take themselves out of competitive pricing battles. Additionally, manufacturers will want to bring in consumer loyalty to their retail destinations. Most manufacturers do not have the sophisticated consumer marketing, engagement, and loyalty programs that consumers base many purchasing decisions on.
By taking a proactive stance and over-communicating their direct-to-consumer intentions to their existing sales channels, a manufacturer can alleviate many of the tensions that can occur when such a program is originally implemented — regardless of whether that organization is located in the US or EMEA.
Today’s Where to Buy
Today’s where to buy is substantially evolved since I implemented it the first time. With advancements in data feed integration, today’s best in class Where to Buy products can utilize multiple streams of product, retail and consumer data to dynamically power digital display, social media direct, and image overlay ads that provide a frictionless buying experience to consumers who are ready to buy — whether the product is being sold and fulfilled by a D2C manufacturer or their retailer. Bottom line: I see a bright future for Where to Buy as a powerful consumer sales tool for manufacturers and retailers.
A Harder Conversation
All this being said, there is another thing we should probably discuss. If the manufacturer plans on entering the market selling D2C (via their website or third-party marketplaces) with a competitive pricing model, then there is a completely different conversation to be had with their distribution channels prior to entry into the market. This conversation may include an explanation of:
- The need to enter the marketplace to mitigate waning margins
- The need to enter D2C marketplace or D2C (direct) to improve product or brand perception
- The need to re-anchor the value proposition and price point of brand or products
- The need to re-position themselves against competition in the marketplace
- Their intention to reduce the existing number of sales channels
- Other outlying circumstances
To be clear, anytime a manufacturer decides to go direct to consumer, and they have an existing distribution and retail network, it’s going to be met with a great deal of suspicion and scrutiny by these retail partners. Whether the intention is to be collaborative or competitive, this shift in strategy is going to disrupt.
In my personal experience I spent the better part of three months on the road meeting with, and explaining our direct-to-consumer strategy to, our top distribution partners before we ever begun to roll out our direct-to-consumer program. And even after those meetings, it was still met with a great deal of backlash. If a manufacturer is going to move forward with a direct to consumer strategy, they need to be prepared to manage that backlash. It will come regardless of how well-intentioned they may be.
If you are a manufacturer considering moving forward with a D2C strategy (or D2C through marketplaces) you’ve got a lot more to think about than your WTB strategy. But when you do think about WTB, remember: WTB is not your enemy. It can be used as a strategic part of your D2C program. I know. I’ve been there…
If you are a manufacturer considering selling D2C on marketplaces, I co-authored an eBook that provides a more comprehensive strategic guide on what to do (beyond where to buy). Download your free copy of The Manufacturer’s Guide to Marketplace Selling: Making A Successful Transition to the D2C Model today!