Should Food & Drink Brands Sell Directly To Consumers

Should Food & Drink Brands Sell Directly To Consumers
September 21, 2016 John McCallum

An interesting thing happened in July, Unilever, the multinational consumer goods giant, bought an American company you might not have heard of for $1 billion. Dollar Shave Club isn’t available in the UK or Ireland and remains relatively unknown here however it has been successful enough to convince Unilever to part with a significant sum. It’s a disruptive product, it has great branding, some wonderful marketing and has been very successful. Anyone who has seen the price of a pack of Gillette or Wilkinson Sword blades in recent years can easily understand why beards have become fashionable again! Dollar Shave Club used price and excellent branding to cut a slice of that market. The most interesting thing Dollar Shave Club used though is direct selling. You can’t buy its products in the supermarket or chemist, only online directly from them. It’s a subscription based model with a few options and price points available. This is not how Unilever sell their huge range of products currently, so it’s interesting they now own a direct to customer brand, and it might be instructive in terms of how they see the future.

Selling razor blades directly is one thing, selling perishable goods, heavy or easily damaged ones is entirely another. Yet it’s an area all food and drink brands at the very least need to consider. It can certainly be done, Donald Russell have over 600,000 direct customers in the UK alone now selling only meat. Whisky Exchange turnover more than £35 million selling directly to consumer spirits through their website. Whisky bottles are heavy so expensive to deliver and easily damaged, yet business continues to grow. But these are still outliers, most brands are sold through supermarkets or other retailers and for very good reasons. For a start retailers are very good at retail, brands aren’t always. There’s also the actual dealing with consumers to factor in, not something everyone is good at and something that can be very time-consuming.

We fully agree that not every brand or product can sell directly as things stand.

But in our opinion all need to be speaking directly with the end user of their product. So even if a brand doesn’t sell directly it does need to build up a database of consumers and communicate with them. This allows brands to build loyalty, to introduce new products, to promote specific retailers and to gauge what is interesting their consumers. There are a number of channels to do this and most brands are utilising them. Big social media like Facebook and Twitter are almost compulsory for brands now and emerging channels like Instagram, Pinterest and Snap Chat are important too depending on your brand and demographic target market.

Even then these are still channels not under a brands full control. It seems inevitable that Facebook will eventually charge brands to have a presence and others will follow suit if that works. The goal for all brands must be direct contact with consumers, whether they sell directly or not. Having control of that conversation makes marketing easier, increases loyalty and should ultimately increase sales. Creating content and engagement is obviously then key and this requires time and effort, but in our opinion it’s a worthwhile investment. That’s where a company like us can help.

Whether Unilever envisage a future where you can buy their products directly from them or simply see the growth potential of their most recent purchase we can’t say. What we can say though is utilising direct sales techniques to communicate with consumers has never been easier or more affordable or more desirable.

Direct Sales

Dollar Shave

 

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