2018 Top Trends for Brands & Manufacturers

The recovering economy may make many brands think the painful digital shift they’ve been undergoing in their channels will subside as traditional retail, wholesale, outside, and catalog sales get a lift with a stronger economy. They'd be wrong.

While a stronger economy will help all sales, this recovery will likely see its biggest boost in digital channels – everything from direct sales and drop ships to social commerce and Amazon domination.

There's plenty for a brand to do in 2018, but here are 5 trends you should be acting on now:

 

1. Direct Sales Surge – Every brand has walked the line of selling direct and supporting their channel programs. In 2017, we saw almost every brand we monitor record double-digit direct sales growth – regardless of market segment.

This wasn’t a one-time fluke; it’s part of the bigger trend we’re seeing online – consumers increasingly look to the manufacturer for guidance, and that includes reasonable pricing.

In fact, the 3-year trend of consumer direct sales is unmistakable; brands that have consistently sold online for the past 5 years (with realistic pricing and a solid website) have averaged 15-25% growth per year.  The key for your brand to sell more direct?  Support your channel by selling direct.

It may sound counterintuitive, but the data backs us up. Brands that add a “where to buy” section as well as a “buy now” option to their websites actually have a higher close rate than those without both. Adding custom quotes and dealer interest forms improves onsite behavior even more!

2. B2B Pricing Implosion – Speaking of pricing, several B2B markets are going to face increasing pressure caused by poor offline/online pricing alignment. Education, healthcare, and heavy industrial companies are all likely to end up in tense meetings as clients and contracts are scrutinized because of easy access to online pricing.

Let’s start with a quick fact check. B2B online sales have always been higher than B2C when you factor in EDI systems, which include closed systems like Ariba as well as the traditional, direct transactional systems used by everyone from Grainger to Cisco.

They never caused many issues, since the pricing and data weren’t easily accessible. Not any more.

You can blame Amazon’s surging B2B business, but they’re just a part of the shift. Yeoman’s research has shown that every major distributor in every industrial and educational market has updated their digital presence and is pushing more aggressively online. B2B buyers are surging online, so every major player is trying to get their fast.

If you’ve got a distribution partner that’s been stiffing accounts with inflated pricing for years, this may be their year of reckoning. They’re going to get dumped. And don’t be surprised when they call you and complain. Be proactive – start analyzing your price variances now and set some guidance.

For many traditional industrial B2B manufacturers that means finally publishing some type of price point on your own site. Selling direct may not be viable for many, but leaving the channel to guide pricing is a huge mistake (just ask any of B2C brand).

3. Huge Amazon Pivots (both good and bad) – Amazon had a record year in 2017, and not every brand has benefited from this growth. In fact, some of Amazon’s strongest growth came from their own private labels, as well a new surge of FBA-only brands that import directly to Amazon’s fulfillment centers.

Some analysts predict Amazon’s private label business could account for 20% of its revenue within the next few years. If you’re thinking “Amazon Basics” or “Alexa”, think again. Amazon has 20+ brands such as Arabella (Clothing), Beauty Bar (Cosmetic), and Denali (Tools).

There’s still plenty of room for growth on the platform, especially if you’re fully leveraging the newly bolstered brand protection and expanded marketing services.

Another huge opportunity for 2018? Leveraging Amazon as a launching point for international expansion. Amazon’s Merchant and Vendor programs both have turnkey programs that help you launch in Amazon’s international markets including Canada, Mexico, UK, India, Japan, and all of Europe.  If you've got a lagging international program, this may be the perfect initiative in 2018.

4. Fake Retail Recovery – B2C brands breathed a sigh of relief as most major retailers delivered fairly good results this holiday season. However, every manufacturer should dig into the details.

Most of the gains were small at best and were often obscured by the fact that many don’t break out their online revenue. The numbers don’t lie – in-store growth was 4.9%, but online growth was 3.5x that at 18.1%.

Any retail partner that isn’t investing heavily in an integrated ecommerce system that links the stores and sites together is going to fail. An integrated pickup, pricing, returns, and shopping experience will be the norm. 

The big boys, like Walmart, are trying to acquire sites, technologies, and talent to retool. It's way too soon to predict a winner, but for brands, it means more pressure to provide better content for web and in-store use.

5. “Next Level” Content Pressure – Most brands have finally acknowledged that they are responsible for providing their digital content, including compelling copy, images, and bullets. A few brave souls have made it a separate group from Marketing and have banned the use of ‘tech-savvy’ interns as content editors. These brands are in the best position to be able to deal with the huge uptick we see in demand for ‘next level’ content – including video, 3D images, and digital augmentation of your product.

Forget the long, 5-minute overview that takes a month to make. You’ll be pressured for fast, short, relevant content linked to an event or season. Expect the requests to come fast and furious – ready for instant streaming on Facebook, YouTube, or dozens of other spots.

The key to winning with content? Match what users are looking for, whether its YouTube, FaceBook, or Instagram - AND promote it.  Viral doesn't just happen; it's requires coordinated activity from your social, ecommerce, and PPC teams.

This should be a huge year for any brand if they continue their digital integration.  Need help? Get Yeoman. We focus exclusively on brands and manufacturers and understand how to navigate online and offline selling.

Don’t expect a consulting report from us. We’re hands-on and will jump in with your team to understand and grow your digital sales. Contact us today to get started.

 

Download a white paper version of this blog: Yeoman Top 2018 Trends.pdf

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