Centralization and the Brand-Shopper Relationship

The relationship that brands and shoppers have is a dynamic one. Ten years ago it was much more of a linear, per channel strategy. A shopper would engage with a brand through products available at big box retailers as the result of a wholesale-retail distribution strategy. Alternatively, a brand or manufacturer would have an physical storefront where shoppers could come in to touch, try on, and test out products. The amount of insights that the brand would have about that activity would vary significantly based on what they were instructed to collect.

During this time, brands and manufacturers were managing product life cycles, forecasting, and developing trend analysis on rough quarterly-based and annualized numbers. When things moved digital, there was an opportunity for intermediaries to facilitate the transaction between a brand and a shopper based on new data attributes now on the table such as understanding shopping preferences about users and basic demographic information.

With the emergence of digital commerce, the primary strategy that dominated was one where significant big box retailers like Target or Walmart made meaningful investments to move catalogs online in order to facilitate these digital transactions direct to consumer. These became what we recognize today as modern marketplaces. Along those lines, brands started to grow competency in building their own digital commerce stores, known as eCommerce capabilities, standing up storefronts where they would have one-off relationships with a shopper coming into that digital environment.

For all the resources that very meaningful brands and manufacturers, like Louis Vuitton for example, have dedicated to ad spend and developing these capabilities, their ability to track individual shoppers to their standalone sites is extremely inefficient and cost-prohibitive compared to the activity that can occur in a marketplace. The modern state of retail is really that of intermediaries acting on behalf of the brands to facilitate the value exchange, leaving folks like Amazon, Target, and Walmart, sitting between the brand and shopper.

Brands are now almost back in the position where they’re operating off of very little data. How their products are performing in that environment, what kind of sell through rates compared to others inside of the product categories, the quality of their products, and return rates is very black-boxed. The relationship that brands have with these primary channels for online and/or physical distribution doesn’t return much insights, leading to inefficient production cycles and a mishandling of manufacturing, logistics and distribution-center activities. It blocks up the critical flow of data in the ecosystem.

For a shopper, they’re driven by price and selection. A lot of these marketplaces that allow for great brand experiences inside of this unified environment are perceived as helpful. These environments, typically much more technology friendly than brand-direct experiences, have really won. The network orchestration between that these marketplaces facilitate, the interaction models, and the data engagement tools that shoppers in have become the prevailing method.

The relationship that a shopper used to have with a brand has been regulated down to things like price and selection as opposed to any sort of authentic branded experience that would allow for a brand to capture and grow the subjective value associated with their product lines, their brand or the mental space that they may have shared, created or expanded upon with the consumer. Outside of that very myopic transaction, there’s very little to no information gathered by brands about any of the activity that occurs across channels.

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