Trade Distribution Model On Its Head

Where do you focus your sales and marketing efforts?

Many businesses have traditionally selected either marketing directly to consumers or sales to trade/distributors. Prior to the blossoming of the internet, the primary choice had been to focus marketing effort on retailers and distributors of the product, who then invest their efforts and money into selling the products.

For decades, if someone wished to purchase an album from their favorite band, it was necessary to either find it in the stores, or pay to go to the concert where it might be sold. As a consumer, when I need to replace my dishwasher, the point of purchase will be a retail store. Of course, now there are dozens of research options to decide what option is best before heading to the store.

This distribution-reliant model in the current economic turbulence is wreaking havoc on most businesses. Due to depressed sales at Barnes & Noble , many book publishers have been shrinking staff, shrinking the amount of new products produced, and experiencing financial difficulties. Consumers instead are purchasing these products digitally through devices such as the ipad and kindle.  Yet this model is still based on the retailers' ability to sell the product to consumers, and continues to press the entire industry.

Some forward-thinking businesses are beginning to realize what successful marketers have known for quite some time. Marketing effort must be spent on both trade and consumer awareness. For example, no matter how hard you try, it is impossible to purchase a cold, refreshing Bud Light at Budweiser.com. Yet, it would be difficult to go a day without seeing some form of advertisement for a product they sell. Legal and logistical issues likely prevent direct sales from Budweiser, but they've come as close as possible to selling product directly to consumers.

I just read a recent spread on some new developments in New York's Fashion Week. The highly-visible, yet exclusive event has inspired fashion-lovers with the newest products from the new designers. The goal of the event has been to generate some consumer buzz, but is primarily an event to drive interest among buyers who will distribute the products. While quite effective, consumers then are left hunting for a way to start wearing the new fashions before everyone else. Now, many of the designers are hosting their own events, streaming the show live, and offering direct sales online - During The Show!

We can learn a lot from many aspects of the changing business and opportunities here.

  • If your business relies on sales to distributors or retailers to meet its bottom-line goals, start looking for alternatives.
  • It is not sufficient to merely drive interest among the buyers and retailers. Consumer desire for your products will ensure your distribution does increase.
  • Consumers love you and your products. There is little risk, but huge upside potential, in allowing your customers to purchase your product directly from you.
  • Whether difficult economic situations or just the desire to grow, it is critical to look for new means to reach consumers directly.

Are you investing in advertising and marketing directly to consumers? If not, contact Spartan to find out how you can move ahead in the game.