Are these the best or worst of times for consumer brands?
Through a special arrangement, presented here for discussion is a summary of a current article from the IMS Results Count blog. With Adam Simon.
Brands now have unprecedented opportunities to reach consumers, yet they’re facing massive disruption to their historical retail models.
Why these are the best of times for consumer brands
Today’s omnichannel consumers have disrupted the traditional linear model — manufacturers to distributors to retailers — and now expect to shop, purchase and take delivery anytime and everywhere.
- Direct sales: As consumers increasingly shop online, manufacturers have greater opportunities to sell direct, often at a higher margin, and form direct relationships with consumers.
- New marketing opportunities: With more than 70 percent of customers beginning their purchase journey online, brands can engage customers early and often through multiple touch points as well as at stores.
- Inventory reach: With stores limited by physical space, “virtual inventory” online can present a fuller range of products to shoppers with more in stock at more points of purchase.
Why these are the worst of times for consumer brands
The pendulum has swung to be more customer centric.
- Commoditization of products: Everyone’s products are available everywhere at any time, with price becoming the lowest common denominator. Even if brands go direct, they are still competing with over 400 million products available on Amazon alone.
- The missing 5th P – Personalization: E-commerce has for the most part been an electronic catalog of what’s available at a price. Brands have little opportunity to differentiate product or their value added services selling through e-commerce.
Brands have more opportunities than ever to reach today’s consumers. Herein also lies the challenges of having the right media and resources to leverage those points of contact to optimize the brand experience.
The reality today is that few brands have the capacity or resources able to do it all. Indeed, future success for consumer brands lies in how effectively they can collaborate with retailers and distributors to:
- Optimize brand value beyond commoditization of product and price;
- Create an engaging brand experience across multiple channels;
- Optimize supply to be there at the right time and place;
- Solve the last mile challenge;
- Provide personalized service that meets customer expectations.
- Are these the “best or worst of times” for consumer brands? – IMS Results Count
DISCUSSION QUESTIONS: Would you lean more toward saying this is the best or worst of times for brands? What other challenges and opportunities do brands have as a result of retail’s ongoing transformation?