As retail store closures continue at an alarming rate, consumer goods brands have fewer channels to sell their products outside of retail and ecommerce behemoths like Amazon, Walmart and Costco. This reality has many in the consumer goods industry looking to sidestep retail and online marketplaces altogether by selling to their customers directly.
An overwhelming 99% of consumer goods leaders surveyed by Salesforce in February 2019 said that they were investing in direct-to-consumer (D2C) strategies of some kind, leaving 1% who said it was not a priority.
In the current retail and ecommerce climate, it’s no surprise that brands are seeking alternatives to the limited options they have now. Some 42% of consumer goods leaders polled said the challenges of brick-and-mortar retailers were negatively affecting their business. This is perhaps because the same companies that are putting smaller retailers out of business also sell private-label brands online and in-store—leaving consumer goods brands not only with fewer options, but increased competition within search results and on the shelves next to them.
Nearly half of consumer goods leaders said that retailers' private-label products were seen as a threat to their business, Salesforce found. Amazon in particular has hundreds of private-label brands across virtually every product category, according to a March 2019 study by ecommerce research firm Marketplace Pulse.