Retail trends in 2024 are moving away from a singular focus on Direct to Consumer (DTC) models, evolving towards a more integrated approach that emphasizes the importance of retail in the omnichannel ecosystem. Jeremy Brockbank, CEO of Volcanic Retail shares his thoughts.
A Message from our CEO
"I had a close friend ask me a really great question yesterday.
They had a new product and we're wondering if they should sell Direct To Consumer or Retail.
Let me be clear, from my experience I would suggest that over 80% of the time, it is a better business decision to do Direct To Consumer FIRST. It is less risky and involves less capital and gives you time to remove any kinks or pivots with the brand. It allows you to build your demand and educate your customers.
HOWEVER, in the long run, for brands doing over $10m in ARR, I would recommend retail almost 100% of the time. Post Covid, retail makes up for over 76% of all brand sales nation-wide (and that includes Amazon). It can then help propel your brand from $10m to $50m (or in some cases even more).
We've been fortunate to augment the sale for over 500+ brands in 117 retail channels. Some are small and some are billion dollar companies. And if it has taught me anything, it is that retail is important BUT to be considered AFTER you have capital, the demand and have worked with someone very knowledgeable to develop a sophisticated strategy."
From Start-Up to Stand Out: The Essential Shift from DTC to Retail
As our CEO Jeremy Brockbank insightfully shared, the journey of a brand often starts with a Direct to Consumer (DTC) approach, a path less trodden with immense potential. This strategy, while beneficial in the initial stages, is merely the beginning of a larger, more ambitious journey into the world of retail. In this post, we’ll explore why and how brands making over $10m in Annual Recurring Revenue (ARR) should consider retail as their next big leap.
Retail: A Necessary Omnichannel Component
Transitioning to retail is particularly significant for brands that achieve over $10 million in Annual Recurring Revenue, as it marks a substantial expansion in their market reach and influence. Retail offers unparalleled visibility and scale that DTC alone cannot match. Post-Covid trends suggest that up to 76% of all brand sales occur through retail channels. This is a sea of opportunity that brands cannot afford to overlook.
Brands, particularly those that started as online-only or direct-to-consumer, are increasingly embracing physical retail stores. For instance, in the U.S., more than half (54 %) of consumers have indicated a preference for shopping in stores over websites, and this has led to a significant increase in physical store openings (Inc. The Future of Retail isn’t Direct-to-Consumer).
The growth of e-commerce, which surged during the COVID-19 pandemic, is now stabilizing in many markets. This indicates the importance of balancing both online and in-store sales strategies. It's also seen that in-store sales have been outpacing the performance of the 2020-2021 period, with nearly 30% of Consumer Packaged Goods (CPG) growth driven by e-commerce (NIQ, The Omni Future of Retail).
Retail Navigator: Ultimate Guide for Brands on the Rise
Crafting a Sophisticated Retail Entry Strategy:
Moving into retail is not just about making your products available in stores. It's about a strategic, well-planned entry that aligns with your brand ethos and market demand.
1. Understanding Retail Dynamics:
Each retail channel has its nuances. It’s vital to comprehend these dynamics and how your brand fits into the larger retail ecosystem.
2. Building Relationships with Retail Buyers:
Retail is about relationships. Leverage platforms like Volcanic Retail to connect with over 400,000 retail buyers, simplifying what could otherwise be a daunting task..
3. Sophisticated Brand Presentation:
Retail requires a different approach to branding and marketing. Prepare compelling packaging, engaging in-store displays, and persuasive sell-sheets that make your product stand out.
4. Scalable Operations:
Ensure that your supply chain and logistics are scalable to meet the demands of retail distribution.
5. Consistent Brand Experience:
Maintain the brand experience from DTC to retail. Your brand story should be cohesive and compelling across all channels.
The Role of Volcanic Retail in Your Retail Journey:
As Jeremy Brockbank highlighted, our experience with over 500+ brands across 117 retail channels has taught us the importance of a knowledgeable partner in this journey. At Volcanic Retail, we offer a universal messaging platform and sales outreach services tailored to guide brands through this transition. Our approach ensures that the leap to retail is not just a jump but a strategically executed maneuver that propels your brand to new heights.
Adopt an Omni Approach
DTC is a valuable starting point, but retail is a necessary component in the omnichannel approach to retail success. Brands ready to make this shift must do so with a strategy that encompasses understanding of the retail landscape, robust preparation, and the right partnerships. With Volcanic Retail, your brand is not just transitioning to retail; it’s rising to meet its full potential.
The Ultimate Guide for Brands
Dive into our new guide, Retail Navigator: The Ultimate Guide for Brand on the Rise—with concise, impactful, must-know strategies, including:
- Competitive Pricing: Learn how to set prices that attract retailers while keeping your profits healthy.
- Winning Line Sheets: Create captivating line sheets that make retailers take notice.
- Savvy Negotiations: Master the art of negotiating deals that benefit both you and the retailer.
- Effective Communication: Develop communication strategies that resonate with retail buyers.
- Retailer Relationship Insights: Gain insights into building lasting relationships with retail partners.
Transform your approach with our new ebook and watch your brand soar in new markets. It's not just a guide; it's your ticket to success!
