Purchasing Directly from a CPG Versus a Distributor
In reference to our findings, five insights into the value of consumers purchasing directly from a Consumer Packaged Goods (CPG) brand as opposed to alternate retail platforms such as wholesalers, e-commerce, and brick and mortar retailers are reduced risk of consumers getting scammed, better customer service and support, availability of personalized products and wider product choices, consumers enjoying a seamless shopping experience, and consumer demands are directly focused on.
GREATLY REDUCED RISK OF CONSUMERS GETTING SCAMMED
- Through the use of direct-to-consumer (D2C) selling, manufacturer including Consumer Packaged Goods (CPG) brands offer customers a guarantee that the products they are purchasing are original and authentic because they are coming directly from the manufacturer. This guarantee results in less anxiety on the side of consumers as they go about their shopping.
- This is not the case when customers purchase the same products from third party wholesalers, retailers and distributors where a certain degree of anxiety on being scammed by knock-off distributors will exist.
- A feeling of security for consumers is a good example of value that consumers derive when they shop from CPG brands via D2C as compared to other indirect retail platforms.
- For sensitive products such as foods, beverages, and over the counter drugs, the potential of purchasing knock-offs from third party retailers can result in serious health consequences to consumers. Consequently, the reduction of scamming by shopping for such products directly from manufacturers is of value to consumers.
BETTER CUSTOMER SERVICE AND SUPPORT
- In the D2C and CPG industry of the United States, brands enjoy an unrestricted connection to consumers as these two entities interact in business.
- As a result of this unrestricted access, consumers will derive more value from CPG brands through "better services and support, stronger personal relationships, and even more targeted marketing for retention. This and more will be offered by CPG brands throughout the customer journey.
- By opting to purchase products from CPG brands over other third party retail alternatives, consumers generally experience the highest quality of support. This is because CPG brands know their products better than any other outside entity.
- For example, with D2C shopping from CPG brands, consumer queries like product returns and service issues are usually handled promptly and more adequately. Additionally, the chain of communication between customers and the CPG brand is much shorter without retail intermediaries and such "brands tend to care more about customer experience and opinions of the product, not just the store."
AVAILABILITY OF PERSONALIZED PRODUCTS AND WIDER PRODUCT CHOICES
- In the American CPG landscape, brands that go above and beyond what is expected and those that offer unique products to consumers have a competitive edge over their competitors.
- Consequently, most CPG brands strive to offer personalized and wider product choices to consumers so as to remain competitive in the industry.
- In addition, through the information that CPG brands gather from the uninterrupted connection that they have with customers, they "are more likely to stock what shoppers are looking for — especially so if they deal with a broad and variable range of products."
- Therefore, consumers that choose the D2C purchase of products from CPG brands over other available third party retailer options end up deriving additional value because the CPG option offers both the availability of personalized products and wider product options.
- Finally, D2C shopping from CPG manufacturers also enables consumers to access products that would normally be unavailable to individual retailers. This VIP access that is enjoyed by D2C consumers also offers more value to them as compared to consumers that shop via third party retailers.
CONSUMERS ENJOY A SEAMLESS SHOPPING EXPERIENCE
- In the American CPG landscape, customer shopping experience is another competitive advantage that attracts and keeps customers. This is because the rise of social media and mobile technology resulted in an increase of customer expectations, a metric that CPG brands have to meet so as to remain competitive.
- According to a Shopify guide on the D2C business model in CPG, one of the most important metric for the success of CPG/FMCG brands is agility and user-experience.
- The fact that CPG brands sell directly to consumers via D2C models makes it easier for such brands to meet the consumer need and demand for a seamless shopping experience.
- Additionally, by selling directly to customers, CPG brands are able to "envision how the customer journey should take place and execute the business tactics required to make that vision a reality." As a result, a majority of CPG brands in the United States offer a seamless shopping experience to customers through a number of strategies that include software programs and a variety of product delivery options so as to attract potential customers and retain new ones.
- With most CPG brands offering/striving to offer the best and most seamless shopping experience to consumers so as to maintain competitive advantage, American consumers that purchase goods from CPG brands end up experiencing an added value in D2C shopping as compared to what is on offer to consumers from third party online and offline wholesalers, distributors, and retailers.
CONSUMER DEMANDS ARE DIRECTLY FOCUSED ON
- In the American CPG industry, brands are highly connected to consumers through platforms like mobile devices and social networking websites. Additionally, CPG brands focus on customer service and support so as to create a relationship with customers and encourage brand loyalty.
- Additionally, CPG brands care about customer opinion on products. This results to such brands listening to and "answering unvoiced but implied consumer demands."
- Consequently, the issues and demands that customers who buy products through CPG brands identify during the customer journey are easily communicated to the brands through the use of digital channels like social media, leading to the brands directly focusing on and in a majority of instances, acting on these demands.
- This is an additional value that comes with the D2C model, which is used by CPG brands to sell products. This value is absent in alternative third party shopping platforms like retail and wholesale.
Our exhaustive research process can be summarized into three strategies i.e. searching for insightful information on the value of a consumer shopping directly from a CPG brand versus a third party wholesaler, distributor, or retailer in - press release resources such as PR Newswire and GlobeNewswire, industry specific blogs and news resources such as CPC Strategy, One Space, HBR, Forbes, and Retail Drive, and major CPG brands/case studies such as Unilever, Nestle, and the Dollar Shave Club case study. Through these strategies, we were unable to find publicly available information on the benefits that consumer experience by shopping directly from a CPG brand. However, these strategies yielded a significant amount of information on CPG and D2C as they relate to organizations.
Consequently, because CPG uses the D2C model, we decided to use the available information from our research process above to triangulate relevant insights on the value that consumers purchasing directly from a CPG brand would experience as compared to alternative retail and wholesale platforms. We did this because the available D2C and CPG information from our research process would be highly relevant to research after we conducted triangulation and drew educated inferences into how the information applied to consumers. We have presented five of the most dominant insights into consumer value across multiple resources in detail in the sections above.