Manufacturers test the Web for direct sales

By Jessica Davis, InfoWorld |  Business

Manufacturers are testing the Web for direct sales; some are finding success

MAYTAG'S DONE IT. So has Bose. Nike, Mattel, and Sony have done it too. All these consumer product manufacturers have sold direct online one way or another.

At the dawn of the Web, manufacturers discovered they could promote their products on their own sites, controlling the branding, marketing, and merchandising experience. In recent years, some have taken that promotional capability a step further, offering a selection of their products for sale online, direct to consumers -- without the retailer.

The prospect is tempting for manufacturers. Cutting out the middleman -- retailers -- gives them more profit. It also gives them the opportunity to collect more information and have more control in those all-important relationships with their customers.

But because online sales make up just a fraction of overall retail sales, manufacturers have tiptoed around the issue. Some are selling only custom-built products online. Others are selling a small portion of their total product line. All are very aware of the colossal failure of fellow manufacturer Levi Strauss in its foray into direct sales online.

As part of its online sales initiative, the manufacturer of jeans and Dockers prohibited some of its retail partners from selling Levi's products online. Those retailers, a little peeved at the move, promoted their own product lines rather than vaunting the Levi Strauss brand. And Levi's, already struggling to reach its target market of teens and young adults, eventually realized the channel-conflict headaches were more than it could handle. The site shut down after a year.

Other manufacturers have heeded the lessons learned by Levi Strauss. Many avoid selling direct online, instead offering information about the stores that sell their products. Braun and Sonicare are two examples.

Others offer product samplings for sale online. Sony sells some of its consumer electronic products online at SonyStyle.com. Mattel offers portions of several product lines for sale at its site, including Barbie and Fisher Price.

And some manufacturers, following the PC tradition, offer custom-built products on their sites. At Nike.com, consumers can design their own shoes, choosing colors and even adding words such as "Air Kate" to the back of the shoe.

One new site, still in its pilot phase, lets consumers design their own breakfast cereal. MyCereal.com uses the tag line "Incredible cereals that don't exist until you help create them." The General Mills site isn't live to the public yet. But what a concept.

What next? Custom-made vitamins, designed to offer the nutrients that your particular diet doesn't provide? Colognes created by e-shoppers,combining the scents of jasmine and tobacco that evoke college days?

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