Brand shift to direct: Key ongoing trend

Brands accrue many benefits from interacting with and selling directly to consumers online, including capturing margin by eliminating intermediaries and increasing sales by better satisfying customers as brands use the data they collect to personalize marketing campaigns and improve customer experience. But despite the fact most brands have maintained dedicated websites for more than a decade, they avoided selling direct until recently for fear of upsetting traditional channel partners, which account for the bulk of their sales.

However, brands are stepping up online consumer engagement and direct sales efforts with increasing technology investments. Established brands see a critical need to be more competitive with newer digital-only players and to that end are pursuing various initiatives – including building more robust websites and integrating to online marketplaces and social media platforms – to engage and sell to customers directly while still selling through traditional distribution partners. The traditional channel now understands that this hybrid approach – blending direct and indirect – is the new normal. We expect most brands to investigate technologies for engaging consumers directly and to invest in those that show promise.