Consumer Products Brands maintain Multichannel Harmony.

Traditionally, retailers have been the middlemen between consumers and brand manufacturers, but these roles are becoming more fluid with the rise of ecommerce. Consumer goods companies have started selling to shoppers through direct online channels, and in the process are gaining access to valuable market research data.

In an IDC survey from June 2011, a majority of North American consumer goods executives said their companies were selling directly to consumers in some form. Distributing through third-party websites like Alice.com was the most popular approach, and more than a third were also selling through their own sites.

The trend toward selling direct online was further illustrated in an October 2011 Economist Intelligence Unit survey of consumer products executives worldwide. Twenty-nine percent of respondents’ companies’ total sales were attributed to their own websites, social media sites or direct-to-consumer third-party sites. However, the largest amount of sales were still coming from retail partners (41%).

Even though they are expanding channels, most consumer brands are being careful to avoid conflict with their established retail partners. Fewer than 10% of those surveyed saw themselves as battling with retailers’ other brands or private labels. Many saw themselves as collaborating with retailers (41%), and nearly a quarter saw themselves as taking a two-pronged approach—branching into direct selling while simultaneously sticking with retailers.

For many CPG brands, gaining consumer insights is an important additional benefit of direct sales. Sixty-one percent cited purchase data as the most valuable type of consumer insight, and it is a metric that is much easier to obtain when a brand is handling its own ecommerce. The future still lies with retailers, though; consumer products executives predicted the largest share of their sales over the next three years (40%) would come from retail partners, just one percentage point lower than the current breakdown. Consumer products brands may be stepping up their game in terms of ecommerce and social initiatives, but, based on the data, they won’t be stepping on any retailers’ toes in the process.

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