Omnichannel Isn't the Death of the Consumer Brand; It's the Path to Growth. Here's Why.
If the concern of losing that intimate customer connection is holding you back, here are a few ways that today's brands are better positioned than ever to keep the customer at the forefront.
With shoppers buying more online than ever before, a direct-to-consumer approach has increasingly become the model of choice to build a winning consumer brand. When I first launched Schmidt’s Naturals in 2010, my distribution strategy was as direct-to-consumer as it gets — spending every weekend at the farmers markets, talking face-to-face with customers and refining my products based on their feedback.
My brand quickly caught on in the community, and my conversations shifted from educating customers about naturals to opportunities to expand my footprint into local stores. Retail associates would stop by my booth to inquire about a partnership, or my customers would later go into stores asking for Schmidt’s products.
Nothing could be more validating to a farmers market vendor than customers wanting to see your products more available and retailers finding your product suitable for their shelves. This was the moment I knew Schmidt’s had an opportunity to expand into wholesale. But how could I keep these meaningful customer relationships that I had so carefully cultivated at the forefront while achieving my mission of making natural products available to everyone?
As the economy heals from the pandemic and retail makes a comeback, consumer brands looking to grow and stay competitive should consider adopting an omnichannel sales strategy. This can be a polarizing statement for some, but in my experience, more sales channels means more potential to reach new customers, more revenue and better positioning to achieve category dominance.
When I decided to bring my products to wholesalers, I saw quick success in broadening my customer base. With “natural” products still so new in the market, the potential to onboard new customers was massive. Even today, 11 years later, natural deodorant has just 15.9 percent market penetration, with 84.1 percent of households having not yet tried it, according to a 2020 study by Numerator.
As time went on, I graduated from selling at farmers markets to doing business with local, national and eventually global retail partners. The more accounts I’d land, the more excited I’d become about the potential of my brand to grow into a household name. I continued to keep an open mind to every distribution channel as an outlet for reaching new customers and maintaining the meaningful relationships that I kept up with my growing community. While other indie deodorant brands around me were turning their nose up at mass retail, landing those partnerships was my ultimate goal.
Skeptics will argue that the challenges that come with omnichannel outweigh the benefits. There are pricing complications, margin cuts and a strategic approach to marketing necessary to keep all partners and channels happy. Some founders fear “cheapening” of the brand or concerns of offering a less “exclusive” product. Then there are the brokers, distributors and retailers with their own key performance indicators that distract from other goals.
The greatest risk in all of this is that deep customer connections fall by the wayside, but that doesn’t have to be the case if you dedicate time and energy to fostering a strong community. I was always looking for ways to stay engaged with and encourage feedback from Schmidt’s customers, whether with polls on social media, swag giveaways or sneak peaks and trials of new product lines. We stayed true to our farmers market roots where we could, making opportunities to sell in person a priority as we continued to grow. We even created an exclusive “Rose Society” to incentivize and reward our top customers with special offerings.
Eventually, Schmidt’s combined success in retail and direct-to-consumer sales caught the attention of Unilever, who was seeing the impact on sales of the heritage brands in their portfolio, and they acquired my brand seven years after my first farmers market sale.
There are other stories like my own that make a great case for omnichannel, but there’s still hesitation from CPG brands to go all in. If the concern of losing that intimate customer connection is holding you back, here are a few ways that today’s brands are better positioned than ever to keep the customer at the forefront.
1. Be strategic with time and approach, and don’t rush into it. We’re often misled by CPG giants casting a big net right out of the gate or VC-backed brands having capital to launch quickly into widespread distribution. Your brand needs to be ready before diving into omnichannel, which means first securing strong customer relationships. This also requires a healthy supply chain, a well-trained customer support team and a holistic marketing strategy.
2. Lean into user-generated content (UGC). It’s free, it’s easy, it’s authentic. Perfectly curated social feeds and ads are going out of style — customers want to see themselves in your brand. Don’t hold back on sharing user testimonials, reposting videos the brand is tagged in and providing incentives for customers to keep the content flowing in.
3. Livestream marketplaces like Popshop Live allow brands and founders to engage with customers in real time and offer an intimate peak into the business. These experiences build trust and interest and also offer an opportunity for sales. For DTC-only brands, a live streaming experience can be an easy first step or segue into exploring new sales channels. Even heritage brands like Estée Lauder are jumping on the livestream chain and expanding their relationship with QVC.
4. Build community and share content that is useful and engaging. Today’s brands would be remiss to not have a blog or similar platform. It’s a great way to reach new and existing customers and add value that goes beyond just a call to action to buy your product. Brands can show expertise and leadership in their industry and encourage commentary from customers. Audio platforms like Clubhouse offer more opportunity to engage with your audience.
5. Nurture retailer relationships. Get them to care about your brand and feel ownership. Work with buyers on forecasting to avoid out of stocks and solicit their input on product line extensions. This way your brand will be top of mind when laying out planograms, offering incentives or helping customers who are asking for product recommendations.
For consumer brands wanting to reach new customers, increase revenue, attract investor or acquirer interest, or grow into a household name, omnichannel could be the ticket. Think about your favorite local retailers as the first step towards getting started and where you might be able to build a connection.
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