For brands to succeed in the New Retail world they must seize control of their own destiny.
And as defined by our colleague and New Retail expert Michael Zakkour:
‘The New Retail is the complete integration of online, offline, logistics, and technology into a single value chain that places customer centricity and convenience above all else.’
One of the challenges faced by major CPG Brands is in sustainably standing up their own online business, and many have already faced multiple trial and error failures in the past.
Even the largest of CPG Brands has a limited range of skus when compared to Major Retailers and Marketplaces, so it’s easy to understand why consumers would not want to have to go around to many CPG Brand websites to order online and then have to deal with numerous deliveries from each.
New solutions such as Google Shopping Actions are consolidating the front end of this process by providing unified shopping cart functionality across multiple brands and retailers.
However in order to unify this same challenge on the back end supply chain side requires a Unichannel Logistics approach which not only unifies fulfillment across these multiple retail and brand sites, but also across all of the channels these retailers and brands use to go to market both wholesale B2B and B2C consumer aka DTC (Direct To Consumer).
Unichannel Customer Experience (UCX)
As highlighted in the New Retail definition above, a fully integrated, single or unified customer centric approach is required to provide consumers with a Unichannel Customer Experience (UCX).
The below graphic depiction of Unichannel Customer Experience from recent whitepaper Achieving Revenue Gains from Distributed Logistics: The Value of Inventory Proximity to Customers by Gene Tyndall, Alex Baker and Stephen Timme.
In order to achieve Unichannel Customer Experience will require utilization of a full stack Unichannel Logistics Partner (ULP) as no company can cost effectively roll out the needed network to support these requirements. Even the largest companies will require an extension of their network with a ULP in a hybrid scenario as the individual network ROI will not justify the needed investments in all markets.
What is a Unichannel Logistics Partner? (ULP)
One of the key methods of delivering an effective Unichannel Logistics solution is through the use of Distributed Logistics to help retailers and brands to get closer to their stores and customers. My recent post Discovering the Power of Distributed Logistics lays out a working definition as well as answers the questions why? and how? as well as sharing the benefits of moving to a Distributed Logistics model.
As one of the first companies to productize and provide end to end Distributed Logistics, numerous people have asked, and continue to ask, just what type of firm is MonarchFx?
Are you a third party logistics provider or 3PL? Are you a fourth party logistics provider or 4PL? My off the cuff response to this is that we’re a 3.5PL as honestly we’re a bit of both, but actually MonarchFx is so much more than both of these.
As this post is about the transformation of brands, will not elaborate further here on Unichannel Logistics Partners, but check out my last post to learn more on this.
In addition to unifying logistics across all outside channels and marketplaces, now is also the time for brands to bolster their own online position with consumers.
This may sound simple, but in reality brands must now think and innovate deliberately with the intent of giving consumers reasons to buy directly from them online.
Bottom line is that you need to come up with compelling answer to the question why they should buy directly from your brand? You need to come up with a great reason or ongoing reasons for consumers to engage directly with your company and buy online from your brand.
Constantly monitoring these types of actions by brands, happy to share below some potential approaches to driving direct online shopping from your brand:
1) Personalization – Opportunities for consumers to personalize products in many potential ways for themselves and or others on a gift giving basis. Great current example of this approach is the online My Baby Dove personalization program currently available.
2) Subscription – There are many, many examples of successful online subscription services including Dollar Shave Club, Frank + Oak and many others. There’s likely no better way to connect with your customer than signing them on for a subscription to your products either directly or perhaps gifted to them. Questions you can ask include which of your products lend themselves to this approach? Could you perhaps offer a personalization of product dispenser such as Baby Dove above and then include/offer regular replenishment of the product in sustainable/recyclable packaging on a subscription basis?
3) Customization – Looking across your entire stable of brands whether private label in retail or parts of major CPG stable of brands, ask yourself what current customization options could we provide to consumers? Or perhaps are there new ways we could introduce product extensions that don’t currently exist to introduce the potential for customization? And again be cognizant of any potential to offer ongoing subscriptions to the consumer for these customized products.
4) Curation – As major brands have hundreds if not thousands of brands and products within these brands, are there ways these can be curated either by the brand or even by the consumer themselves to generate more significant multi-piece online orders? Think specifically about product relevant holidays or events and which multiple products might be useful in any given case or time frame and then offer these up as combined deals. Or alternatively allow the consumer to curate and buy their own collections of products creating a customized curation rewarded through multi-item purchase discounts.
5) Cross Company/Brand Curation – And of course such curation efforts need not be limited to just your own products. Actively analyze and identify how your products might interact with the products of other brands and then develop targeted cross company multi-product curation offerings.
6) Stores and/or Pop Ups – Evidentiary proof continues to grow relative to the related online sales uplift available from brand Bricks and Mortar stores and or Pop Ups when properly executed. One recent report uncovered on average a 37% uplift in online sales based on opening of stores in related areas.
7) Unichannel Logistics – Last but certainly not least, investigate how Unichannel Logistics can unify your disparate supply chains across channels, giving you back control over the connection to consumers and related data, to ensure your business remains your business. Effective Unichannel Logistics can also facilitate all aspects of the above programs that will give consumers a continuous flow of reasons to do business with you directly.
As the world of New Retail continues to emerge it’s clear that business as usual won’t work.
There’s a growing need to explore and action ways of connecting directly with your consumers and not just through Predatory Channels such as Amazon which may provide a solid sales bump in online volumes but is this sustainable?
The big question is at what long term cost will these sales come, as Amazon then holds the relationship with the consumer, as well as related data and also actively cannibalizes brand volumes on Amazon pages with like products on brand pages?
Transforming your brand for success in New Retail is paramount to brands achieving sustainable long term growth and survival.
The caterpillar of the traditional legacy brand business must now rapidly undergo metamorphosis through active innovation that will release the inner butterfly which lives in all brands.