Business model implications: While direct-to-consumer is a threat to Total Retail, extending a hand to consumer packaged goods companies may be the smartest move Retailers are not standing still as brands pursue transactional platforms to sell directly to consumers. They continue to pursue their own private label brands. In addition, retailers are also partnering with manufacturers to share consumer insights and collaborate on category management in order to enlarge the pie and drive more success for both. In fact, our data contain indications that this approach may be working in some product categories. The most popular product category in our survey for buying directly from brand websites, for example, is clothing and footwear, at 51%. Since this is one of the most challenging product sectors for retailers when it comes to managing returns and inventory, it might make sense for brands to get more involved in selling these products directly. In a way, the brands would be doing retailers a favor by mitigating some of the retailers’ supply chain logistics issues. High-fashion items, for example, are notorious for customer returns. Another factor to consider for retailers, however, is that manufacturers are not always keen to bypass retailers. After all, retailers are a manufacturer’s main customers, and when sales from a retailer are high enough, many manufacturers would not risk upsetting this relationship for an uncertain foothold in direct-toconsumer. With a more fragmented retail landscape, it is a different ball game altogether. Hence, brand manufacturers tend to adapt their direct-to-consumer strategy by product category, geographic region, and market position.
#TotalRetail  The next retail business model
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