Just like the rest of the retail sector major grocery chains are having to face up to the realities of the modern digital world we all live in today.
I recently wrote a blog (here) about the potential impact on Supermarkets and their FMCG suppliers and partners.
If, as some suggest the growth in online sales for grocery retailers jumps to circa 20%+ what impact is that going to have on the huge legacy investments in real estate, how do FMCG brands like 'Unilever' remain front of mind when trying to convince us that they're cereal is better, they have the 'freshest' choice, and are the most 'innovative' when we increasingly choose to shop online for the 'convenience?
Well it seems that those FMCG brands have woken up to the concept of D2C (direct to consumer) for cutting out the retail middleman by leveraging all kinds of social media platforms, with a particular focus on 'social commerce' and startup acquisitions like 'Dollar Shave Club'.
It seems from a recent survey (link below) that when asked over 90% of consumers would be happy to deal with the brand direct.
If this is to be believed and we do have other case studies that suggest this is a logical trend should those retailers be getting ready to face the next wave of disruption from what used to be todays supplier is now becoming tomorrow's competitor?
Having recently read that 'Nike' is to end its supply agreements with dozens of independent retailers as it accelerates efforts to sell more of its products direct to consumer. The sportswear giant has told smaller retailers that access to its products will end in two years (2021) – placing the likes of Sports Direct and JD Sports on red alert that it could also scale back its agreements with larger retail customers.
If you operate in other sectors of the retail landscape, especially those in the supply chain side of B2B who rely on retail as a key partner, you might be thinking 'so what'?
I might be inclined to agree if we were talking about 'multi-million ££$$ hardware and software deals, however, there are many manufacturing companies like Philips, Unilever, Proctor & Gamble, who are 'currently' highly dependent on a similar distribution model as those sports shoe companies.
You only have to consider the multi-levels of distribution that all those car manufacturers and financial services products currently have to go through, which includes a myriad of dealers and brokers.
Nike has previously revealed plans to make 50% of its sales through its own stores and ecommerce platform in a bid to take greater control of its distribution and boost margins.