By Natalie Hammer Noblitt
Online competition from brands selling directly to consumers (DTC) was an emerging threat to retailers even before pandemic pressures. Then when stores were forced to shut their doors, many brands took sales – or pushed them further – online in order to keep their businesses profitable leaving retailers to decide if their product loyalty should remain the same. We asked retail expert, author and long-time gift store owner Carol Schroeder to share her views on the subject.
Q. How do you feel about brands that sell DTC?
A. Many vendors started selling online directly to consumers during the pandemic, which was understandable as they adapted to stay in business. Brands are also marketing online more to consumers by offering promotions and discounts, while others use secondary selling sites, like Amazon, to make their products more widely available directly to consumers. I'm not turning away from companies who sell directly because I know we can compete by offering consumers the joy of browsing the store, but if they aggressively market to the public, my loyalty will be diminished.
Q. Are DTC sales always harmful to traditional retailers?
A. It depends on the item being promoted and the prices. Cookware is a good example. If a brand launches something new, the brand lovers want to get it right away so they order directly online. We don’t get the stock until later, if at all, but it doesn’t hurt our sales of the brand’s other items.
Q. Are there benefits to stocking brands with a strong social media following?
A. It can be helpful. When brands market to consumers on social media, they teach them about the products. Our shoppers may not purchase a Lovepop Card online, but if they’ve seen posts about the cards, they gain familiarity with the line and are more likely to buy a card when they see my display as they’ve already been educated about the item. I also appreciate it when brands generate content that helps us make sales. The beautiful pictures they post is good content for us to reshare on social media, as long as it doesn’t include a link for a DTC purchase.
Q. How can retailers replace sales lost to DTC sellers?
A. We’ve found a unique advantage in customizing products for our city and region. The minimum requirements have become smaller. We’re currently working with Wet-It to create a Swedish dishcloth featuring a floral design which we will sell at an upcoming fundraiser to benefit a not-for-profit. Ask your sales reps if they offer a line that customizes product and search B2B sites such as Faire and Abound.
Carol Schroeder, along with her husband Dean, are the owners of Orange Tree Imports in Madison, Wisconsin. Carol has written extensively about specialty retailing. Look for her new book, Specialty Store Retailing, to launch soon.