The sale of consumer goods online is a constantly growing trend, and many consumer food producers...
The sale of consumer goods online is a constantly growing trend, and many consumer food producers consider online sales as providing easy access to global markets.
In general, one of the most welcome and recognised advantages of online sales and distribution is more direct access to customers. Eliminating the middleman lowers costs and allows customers to buy products at a lower price. While it is undoubtedly a significant advantage in the case of commodities and mass products, there are some hurdles when it comes to specialised and branded products.
We have identified three of the most important hurdles to selling consumer food products. These factors can be expected to intensify as distribution shifts online.
Eliminating the middleman does not make their functions disappear. The value of intermediary distributors is usually not only in connecting two parties. They also handle critical information about their markets and distribution networks.
While information systems can provide you with structured data and analysis, decision-making and business management are still functions that come with risks and costs. Knowledgeable decision-making is based on market research and experience. If there are no third parties to fill these roles, then suppliers have to. Market information – knowledge of your customers, partners and rivals – is the basis of effective marketing.
In brick-and-mortar supermarkets, customers can only choose from a preselected range of products. In other words, the suppliers of these products compete with a limited number of rivals on the shelves.
In contrast, online sales platforms can list a virtually endless number of products. As a result, products need to be more distinct and easier to understand. To achieve this, suppliers need to develop specific marketing strategies.
In the case of traditional offline distribution, it is enough for a supplier to convince a local distributor to place an order for a considerable amount of stock. Convincing customers to actually buy the product generally remains the task of the retailer – at least to the extent of stock.
In online retailing, distributors do not have to purchase stock or keep any inventory of a product to offer it to their customers. Accordingly, if online retailers do not have to take this risk, it becomes the job of the supplier to find ways to appeal to its potential customers. In the case of overseas online sales, it is essential to gain an in-depth understanding of the needs of the target markets and to find ways to satisfy them. Knowing your target market is the first step to successful marketing.
For many suppliers, marketing means only promotions and advertising. But as a basic concept, marketing means understanding your existing and potential customers and successfully addressing their needs. It provides the basis for all sales activities. Sales without marketing is like making your product available in a shop without knowing who your customers are or how they would actually buy it.
Branded food producers can achieve greater success in overseas markets if they explore the needs of their local target customers and keep tabs on the local competition. Information-based decision-making and localised marketing is essential when selling branded food products successfully.
Online distribution connects suppliers with their customers directly. It happens regardless of the location, even if the target customers are on the other side of the globe. This freedom of access provides customers with much wider product choices than offline store offerings.
Online shops do not need to commit financially to buying the products they want to offer customers. They are therefore not interested in marketing every brand that they put on display. Without the middleman, suppliers need to become more competitive so that they can attract potential customers directly. This is especially true in the overseas distribution of branded food products because most such products are designed to meet the needs of consumers in the country of origin.
To grow sales of branded food products using online distribution channels and compete successfully in international markets, suppliers need to ensure they have an excellent understanding of their potential overseas customers and improve their local marketing efforts. We can therefore expect to see increasing demand for localised marketing expertise as online distribution and sales gain ground worldwide.
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