Manufacturers Prioritise Direct-to-Consumer eCommerce stores as They Accelerate Their Approach to Selling Online

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New report explores relationship between manufacturers and Amazon

Today WBR Digital and Luzern released the findings from their latest study, “Are brands too dependent on Amazon for their eCommerce strategy? How branded manufacturers can win big by diversifying their online sales channels.”

The resulting report explores the complex relationship between branded manufacturers and Amazon, and investigates how it will evolve in the coming years.

The research predicts that Amazon’s significance will dwindle as branded manufacturers look to increase their revenue online. 40% of responding manufacturers believe that their relationship with Amazon is “significant but already reaching maximum potential."

In fact, the research discovered that direct-to-consumer eCommerce stores are the primary strategic focus for branded manufacturers in the next five years.

The research also found that the low cost of getting to market had been a strong initial draw for companies who want to sell their products through Amazon. But as those companies matured, diversifying their online strategy to increase revenue and mitigate risk made sense.

In addition, there are further challenges of working with Amazon, respondents named three in particular: the ability to manage product reviews, concerns around fulfilment, and the ability to control their own pricing strategy.

WBR conducted research with 130 senior decision makers at major manufacturers in Europe and the USA. Survey respondents included; VPs, Heads of eCommerce, Directors of Marketing and Heads of Digital Marketing, amongst others of equal standing. All interviews were conducted by appointment over the telephone. Additional commentary comes from Ken Doyle, the CEO at Luzern.

Quotes from Ken Doyle, CEO, Luzern:

“Over the next few years we believe there will be a shift of power back to the branded manufacturers as more of them diversify their online strategy.

“Brands should ask themselves: How loyal is an Amazon customer to my brand? Will Amazon share the details of customers for which my brand is responsible? Who owns this customer? Will Amazon promote my competitor’s product using the information resulting from my sale?” These questions will only increase in importance as margins are eroding and the complete cost of having Amazon as the cornerstone of your online strategy becomes clear.”

Key statistics:

  •     Developing direct-to-consumer stores will be top priority for branded manufacturers in the next five years
  •     Fewer than half of responding brands globally currently operate direct-to-consumer online stores.
  •     Controlling brand reputation and concerns around fulfilment of orders are some of the biggest challenges named by respondents.
  •     40% see their relationship with Amazon as significant but already meeting maximum potential

The research makes it clear that as branded manufacturers develop their online strategies, a single channelled approach to market is not sufficient.

About WBR Digital

WBR Digital conducts industry research and create executive-level content in eCommerce, Procurement, Supply-Chain, and Finance. Find out what your audience are saying.

For more information visit: http://www.digitaleu.wbresearch.com

About Luzern

Accelerated eCommerce for ambitious brands

Luzern builds, launches and manages e-commerce execution for market leaders worldwide. With a single connection direct to the Luzern eCommerce platform brands can sell across multiple channels, including B2C stores, marketplaces, B2B portals and specialised asset recovery markets. Luzern clients include: Philips, Nuance, Toshiba, Alcatel, Turtle Beach, Unilever and Morphy Richards.

For more information and to get in touch, please visit luzern.co

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Lauren Pozmanter
WORLDWIDE BUSINESS RESEARCH USA, LLC
+1 646-200-7541
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