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OEM Retail & Distribution: The future is happening now. This is what you need to know!

By RANDEM - Do Better on 29 August 2016

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The retail landscape is shifting and OEM’s distribution and retail channels are increasingly blurring – even more so when you throw digital and social into the mix.

Consumers still love to watch… and touch!

The benefits to OEMs are huge. Products can still be sold through multiple channels as these touch points give customers interpretations of the product and brand before making a final decision. The tactile nature of most products will allow for brick and mortar retailers, but increasingly pop-up and seasonal retail options that hold little inventory.  Consumers getting their hands on the latest iPhone for a ‘look and feel’ experience doesn’t necessarily equate to an immediate purchase at JB Hi-Fi or Vodafone. The same consumer is more than likely choosing to purchase from another trusted (probably online) touch point with an unbeatable price and service offer.

This new consumer pathway presents some challenges to OEMs:

  • Ownership - How do organisations own their brand experience and customer journey, and ALSO maintain their customer’s distribution channel of choice?
  • Emerging Channels - Are emerging channels such as click and collect and next day delivery viable?
  • Distribution - Lines of distribution are blurring. Without a clear strategy that clearly defines roles, markets and revenue can erode.

Do these challenges mean it is business as usual for established distribution and fulfilment?

No! A shift is already affecting supply chain and distribution.

Consider these two scenarios for buying a common consumer product: a fridge.

Scenario One: Current retail consumption
  • 1. Go online or into the retail store.
  • 2. If the fridge you want is available:
    • a. Buy it and have it delivered from the retailer’s showroom/warehouse
  • 3. If the fridge is not available:
    • a. See if the retailer can order it from the OEM with a waiting period, or;
    • b. It’s out of stock and you need to choose a new fridge.
Scenario Two: Future retail consumption
  • 1. Go directly to the OEM’s website (for example LG) and view their fridges.
  • 2. Pick the fridge of your choice:
    • a. You can click and collect from a retailer’s store, or;
    • b. You can have it delivered directly to your house.

OR

  • 1. You go directly to the physical store (for your tactile experience) and buy a fridge.
  • 2. The fridge is delivered directly from the OEM.

Smart retailers will embrace Scenario Two sooner than others and will ride the wave of success. Those choosing the familiar path will continue to pay more for storage and delivery, or worse – will pass these costs on to the consumer.

If you want to jump on Scenario Two sooner rather than later, get in touch with the RANDEM team.

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