What Brands to Need to Know to Enter and Establish in the Americas, Part 2
Omni-Channel across retail and wholesale is the required approach for brands to maximize reach in the American market. Each channel complements the other, and collectively causes a “halo effect” that increases overall sales.
International brands seeking entry into the sizable American market need a well-defined go-to-market strategy across channels to maximize product sales and maintain brand standing. Brands must plan their reach to customers so the brand and product messaging are seen in complimentary channels; this increases retention and conversion to sales.
There are many constituents to Omni-Channel depending on the industry and product category. In the context of trade for specialty brands, the main models are B2B (Business to Business: brand sells to retailers) and B2C (Business to Consumer: brand sells directly to the end consumer).
Given its ubiquitous reach, B2C is a necessary model for brands to introduce and market themselves. The brand’s own website can speak to the story of the brand and convey the message of its products like no other channel. With a well-executed digital strategy, including social media engagement, brands can engage, communicate, and create a vested customer community.
Marketplace retailer—both specialty with niche reach, and generic resellers such as Amazon—comprise an important and growing segment of B2C. Brands can list on marketplaces that sell other complimentary brands, and delist if the alignment or customer reach is no longer relevant. Therefore, such B2C marketplace channel strategy is a relatively low risk option for a brand.
Traditionally, B2C channel strategy is truly complete with company-owned stores, but with the industry’s accelerated move to digital retail, physical retail has been difficult to sustain. Deep pockets and exalted lineage have not helped brands keep their stores open as witnessed by many store closures even before the COVID-era. BrandMX remains judicious but opportunistic about physical retail; for certain product categories, it is certainly the best sales channel, or at minimum, serves as the best marketing channel.
B2B channels are integral for brands to reach their end consumers. Brands need access to relevant retailers to reach their target demographics. To cultivate such connections and network, and translate this to sustained sales, simply takes time. B2B industry knowledge and resources are not readily available, and brands may easily veer to missteps, excess spending, and low yield.
B2B marketing through trade shows is the proven avenue for new brands to access the market and for established brands to gain retailers. While this channel has had its fair share of detractors in recent years, trade shows are finding innovative ways to evolve in the digital world while making it less expensive for brands to showcase presence in new markets.
There is an important shift in the industry with retailers adopting “asset light” business models. With “dropship” or B2B2C, brands ship directly to the end consumer the orders received by the retailer who carries no inventory. The B2B2C model is capital intensive, time consuming to execute, needs technical solutions to connect with retailers, and requires precision in operations. B2B2C is the most efficient model, and brands can get the most penetration and distribution with a wide set of retailers.
As the channels grow, brands need to maintain price discipline and granular control of inventory by channel. As the number of retailers and order volumes grow, brands will have to select and spend on the right technology solutions, including electronic integrations with larger retailers.
This allows brands to scale. In BrandMX’s experience with brands in its marketplace, we have not only been able to maximize sales in each individual channel, we have also seen that presence in one strategic channel has a huge influence in driving sales and brand recognition across other channels. This allows brands to truly realize the “halo effect.”