Most retailers are well over that dreaded “C-word” that happened in March 2020. We all are. Following a herculean shift to ecommerce, Nike, like many brands, made a full-court press toward omnichannel looking for the slam dunk.
But in 2022, a reopening of physical stores reversed the ball on them again. The rebound is yet to happen. Now it’s inventory pile-ups and markdowns as inflation-hit consumers tighten their purse strings.
The hits just keep coming. Plagued by supply challenges and overstock situations, many brands are reviewing their wholesale partnership models with aggressive plans to grow their Direct-to-Consumer (DTC) models.
The Rise of Direct-to-Consumer
A new industry report confirms the rise of Direct-to-Consumer in North America, with 66% of companies having increased their DTC spend since the start of the pandemic. A total of 35% said investments increased significantly.
DTC allows brands to connect more closely with customers through personalized offerings and sustainable practices, while extending their reach via well-established retail and wholesale models.
But the game plan isn’t fully baked
Winning with DTC requires that companies look at the inventory management technologies running point to support this new model. Over, under, around, and everywhere in between.
The competition is completely different now. The rules and conditions of the game will surely continue to evolve. Omnichannel brands can no longer rely on old systems to compete in new and unfamiliar avenues.
Inventory visibility, the real ‘New Normal’
Uncertainty will always be our ‘normal’. Beating it will require new moves and technologies that were not in the playbook prior to DTC.
Legacy inventory management software has left brands largely helpless when it comes to being able to fulfill orders from wherever or however they are placed. Available inventory quantities become very blurry with DTC. Even the simple new concept of starting to ship in Eaches instead of Pallets introduces new difficulties in satisfying DTC demand.
So in 2023, companies continuing on the DTC path must rewrite their narrative: inventory visibility first, vs. inventory management.
DTC order fulfillment solutions create the fast break
Modern order fulfillment solutions that bring real-time inventory visibility are how brands will get a clear picture of inventory and reign their DTC markets.
When asked how their business best protects against failing customer expectations with DTC, survey participants cited investing in order management and fulfillment technology as the number-one strategy (42% of the sample in Europe and 36% in North America).
These solutions put real-time visibility at the forefront, empowering labor-strapped teams to quickly identify the best inventory across their entire network. So they can satisfy customer demand without significant overstocking – or without leaving customer orders unsatisfied in channels where no inventory is available.
Order fulfillment solutions for DTC improve omnichannel inventory management processes by bringing three crucial differentiators to the retail supply network:
1. Flexibility - to evolve one’s platform quickly as new channels open and sources dry up. Plus, the ability to add new selling platforms such as ecommerce marketplaces that are integrated with supply chain inventory planning and fulfillment applications.
2. Real-time connectivity to all viable sources of inventory with 100% system uptime, automatic syncing, and third-party supply chain collaboration.
3. Deep knowledge of both the product and the sources of supply, based on location, timing, local legislative requirements, etc.
A visibility-first approach to DTC puts retailers in scoring position to satisfy demand, no matter where their inventory is dlocated. So for the same inventory investment, they can extend the reach and responsiveness of their whole network.
A great example is Dermalogica. Their search for a new approach to logistics and fulfillment was driven by the need to unify multiple acquired brands into a single, efficient DTC operation and further support the relationships Dermalogica already has with its professional and end-consumer customers.
“Dermalogica went live on the Deposco platform in just 90 days,” said Jason Brown, Director of Logistics, Unilever, Dermalogica. “The ability to get innovation in place quickly to meet the evolving needs of our customers has allowed us to reduce risk, lean into growth, and see value faster.”
This rapid time-to-value empowers companies to serve all their customers, franchises and retailers they work with, and the individual consumers who buy from them, with a fully baked plan that’s quick and efficient every time.
Deposco is a leading provider of omnichannel supply chain fulfillment solutions that brings total inventory visibility to businesses to capitalize on the growing DTC market, without having to compromise success in their traditional supply chain channels.