How to address customers intelligently

Extract from the white paper:

E-commerce, online marketplaces and direct-to-consumer are booming.
Stationary retailers are using this to sell at any price. The brand perception of manufacturers and brands is suffering and needs protection.

Situation

Online retail is booming. In 2020, gross sales in Germany alone increased from 72.6 billion euros to 83.3 billion euros. Despite stagnation in the first quarter, a plus of 14.6 percent compared to the previous year, shows a survey by the German E-Commerce and Distance Selling Trade Association (BEVH).

A trend that was foreseeable even before Corona, but pandemic and lockdown shop closures have intensified it and given online retail a boost that continues in 2021.

Direct-to-consumer (D2C) would be the order of the day. But stationary retailers, multi-brand shops and even department stores are pushing their goods onto online marketplaces and selling stock of their brand products there. They do this on a grand scale and with uncontrolled price discounts. Currently, 40 percent of all online sales take place on marketplaces. And the trend is rising.

Problem

As a result, manufacturers and brands are at a loss and simply no longer have an overview of who is selling their goods online. They don‘t know which of the approximately 75 German B2C online marketplaces they are already

represented on, with which assortment, and at which (reduced) price their goods are offered there.

At the same time, their chances of scoring points in the customer journey of the D2C business are decreasing, because apart from exclusive merchandise, they can hardly come up with a good deal. Retailers lower prices in the clearance sale to a level that manufacturers and brands will not go to in their own shops because it will hurt them in the long run.

The immediate effect is a disturbed price structure, from which brand perception suffers massively and a brand image that has been built up over years loses its reputation in the permanent sale of stock and shelf goods.

Solution

Ending this misery is long overdue. Manufacturers and brands must become active. They need transparency, an overview and structured information in order to recognise the development of price erosion or sell-outs at an early stage. Before the first causes have a noticeable impact on brand perception, manufacturers are aware of the situation in time and can act accordingly.

It is important to become active on the online marketplaces and to perform optimally. On the following pages we show how and with which strategies this is possible.

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